Italy tubemakers increase prices, in line with HRC
As a result of Europe’s safeguard quota revision, all Italian welded tube re-rollers are raising their prices to reflect the growing expenses related to hot rolled coil imports, market sources tell Kallanish.
One HRC manufacturer in Italy is increasing pricing by €30/tonne ($32), asking for a base ex-works level of €660/tonne, as present contract rates are very close to actual costs. This is being done despite market uncertainty and slow demand.
A re-roller reports that discounts were effectively decreased by two points last week, or €30/t. The company is further reducing discounts by two points this week. Other tube makers are cutting their discounts by four points with immediate effect. However, the first source says the market is moving up by no more than two points every week, and the source expects a gradual but steady rise.
Italian tube discounts stand at 40 points at the moment, down from 42 at the beginning of June. By the conclusion of this week, the goal is to cut discounts to 38 points. Coil derivative pricing is considered unsustainable. Processed products should cost at least €70/t more than they do now, according to one source.
The EU steel safeguard measure may be extended by two more years, until June 2026, the European Commission announced last month. In order to keep the market stable, it wants to impose a 15% cap per origin over the “other nation” tariff-rate quota for HRC.
As a result, starting on 1 July, European tube makers would see a rise in costs. Two sources suggest that the import duty associated with clearing HRC through customs may hover at €70–80/t, to be paid on 1 July. In reaction to the large cost rise, some are thinking about clearing some material at the start of the fourth quarter.
Natalia Capra France
European hot-rolled coil market remains in trading lull
Trading activity in the European hot-rolled coil market remained muted June 17, with sources commenting that the summer slowdown started several weeks too early.
“It’s too quiet in the market,” a German service center source said. “Summer holidays have not even started. Ex-stock demand is ok, it’s back to back, but new orders are lacking,” the source added.
Sources said that while industrial customers report a slight improvement, automotive demand remains uncertain.
While Turkish import offers have been heard to have moved up to Eur650-660/mt CIF Antwerp including antidumping duties, Asia-Pacific offers were heard scarce June 17. Sources said that the price gap between domestic and import is too narrow to consider import material.
“Imports need to be Eur30-50/mt below Europeans to make sense,” another German buyer said, adding that European mills are currently at their lower limit and would be holding official offer prices.
Lead times from European mills were heard to be still in July to August for HRC, with one German mill working on backlog orders due to maintenance works in May.
The Platts Northern European HRC assessment moved up Eur5 on the day to 635/mt EXW Ruhr June 17, while the Italian assessment for HRC remained stable at Eur620/mt EXW Italy.
Italian mills were heard to be offering Eur650-660/mt EXW Italy, with some concessions made.
One mill agent said that they expected higher demand following European elections and the safeguard quota announcement, but so far there has not been an uplift in demand or prices despite mills’ attempts a few weeks ago.
Currency fluctuations push Polish rebar prices higher
Polish mills’ rebar offers were 50-60 zloty ($12-15) per tonne higher compared with last week, when the main offer level was at 2,700 zloty per tonne CPT, sources told Fastmarkets.
Market participants indicated tradeable price levels in the range of 2,700-2,756 zloty per tonne.
Some deals were heard at 2,650 zloty per tonne CPT and 2,680 zloty per tonne CPT for large volumes of 2,000 tonnes and 3,000 tonnes respectively.
These price levels were not included in the assessment because they do not comply with Fastmarkets’ applied methodology.
Fastmarkets’ weekly price assessment for steel reinforcing bar (rebar), domestic, cpt Poland was at 2,700-2,756 zloty per tonne on Friday, an increase of 50-56 zloty per tonne from 2,650-2,700 zloty per tonne one week prior.
“The main reason for this price increase is the weaker Polish zloty. The currency fluctuations made imports more expensive and local producers also changed their prices promptly,” one distributor source told Fastmarkets.
“The zloty is changing a lot [recently] and [this] makes the difference [in offer prices],” a seller source said.
According to Oanda.com, the Polish currency was trading at 4.34 zloty to €1 on Friday June 14. This compares with 4.31 zloty on Monday and 4.27 zloty to €1 at the start of the month.
Overall demand for rebar in Poland remained weak, with the exception of the cut-and-bend sector, the distributor source noted.
“Deals are now quite few because mills sold out their material for June delivery,” a consumer source told Fastmarkets.
Although trading has been more active recently, according to the seller source.
Import offers from Germany were heard at €630 ($683) per tonne delivered Poland, which is €10-15 per tonne higher compared with the end of May.
Italian material was heard offered at €635 per tonne DAP Poland.
But these prices are too close to local levels, making such import offers unattractive, according to the distributor source.
Views about the future direction of the Polish rebar market were mixed.
The distributor source suggested that prices during the summer period would probably increase slightly because many Germany-based producers plan three- or four-week maintenance breaks in July and August. This will limit the availability of material and have some impact on the domestic market too.
Additionally, stocks of local producers are not that big, according to the source.
“Currently, expectations are bullish,” the consumer source said.
But a second distributor source told Fastmarkets that prices will not change significantly by the end of this month.
“Demand is still average – nothing special,” the source said.
Published by: Darina Kahramanova
European steel HRC prices stable amid slow trading
Fastmarkets calculated its daily steel hot-rolled coil index, domestic, exw Northern Europe at €635.00 ($684.48) per tonne on Friday, down by €1.00 per tonne from €636.00 per tonne on June 13.
The index was up by €1.25 per tonne week on week but down by €5.88 per tonne month on month.
An integrated mill in the Benelux region was heard offering July-August delivery HRC at €650-660 per tonne ex-works.
Mills in Germany offered HRC in the range of €640-650 per tonne delivered, which would net back to €630-640 per tonne ex-works, for July-August delivery.
Fastmarkets’ sources estimated tradeable prices in the range of €620-640 per tonne ex-works.
“After the announcement of the new adjustments in the European import safeguard measures, some producers tried to increase prices. But the market did not allow a significant rebound, and now [the price is] where it is,” a producer source told Fastmarkets.
Fastmarkets calculated its daily steel hot-rolled coil index, domestic, exw Italy at €631.88 per tonne on Friday, up by €0.21 per tonne from €631.67 per tonne on Thursday.
The index was up by €1.05 per tonne week on week but down by €4.38 per tonne month on month.
A local steelmaker in Italy was heard increasing its offers on HRC to €680 per tonne delivered, which would net back to €670 per tonne ex-works. But market participants believed this price to be unworkable due to continued slow demand.
Deals for small volumes were heard in the range of €630-635 per tonne ex-works.
Fastmarkets’ sources estimated the tradeable price in a similar range.
Import offers on Turkish HRC were heard at €610-630 per tonne CFR, including the EU anti-dumping duty.
Many Asian suppliers continued to refrain from making any offers to Europe.
Trade sources told Fastmarkets that interest in buying overseas coil remained minimal due to the long lead times, the similarity of prices to those in the European market, and concerns over import quotas.
Julia Bolotova in Brussels contributed to this report.
Published by: Darina Kahramanova
Assofermet: Some Italian service centres restock amid uncertainty
May ended with a “considerable decrease in order intake”, the association notes. Timid signs of improvement are seemingly coming from some end-user sectors. Expecting price increases on flat products, some are restocking to cover their needs for future months.
The EU’s safeguard quota amendment is however adding concern to the weak consumption issue. The European Commission has proposed to extend the EU safeguard measure on steel by a further two years to June 2026. It will also introduce a 15% cap per origin over the “other country” tariff-rate quota for hot rolled coil, to ensure market stability and avoid crowding out traditional suppliers.
The result is that “the annual quota of about 3.9 million tonnes risks being halved … The repercussions, easily imaginable, could deal a severe blow to the European manufacturing industry, which is already grappling with a strong consumption crisis, according to Assofermet.
Natalia Capra France
Tata Steel Nederland adds sampling line
Tata Steel Nederland has expanded its hot strip mill in IJmuiden with a sampling line, Kallanish has learned. The line enables rapid testing of steel properties, as well as the inspection and certification of each steel coil.
According to the company, this shortens lead times in both the development of new steel grades and the delivery of steel to customers. The expansion is the latest in a series of investments and strengthens the company’s position in the market for thicker, stronger and more abrasion-resistant steel, Tata notes.
“Tata Steel is one of the best steel producers in the world, and thanks to our investment programme, we continue to play in the Champions League of the steel industry,” said Tom Eussen, member of the Board of Management of Tata Steel Nederland and Managing Director of Tata Steel IJmuiden. “The new sampling line is a significant investment that allows us to assess the quality of our steel more quickly and deliver to our customers faster.”
“Investments like these enable us to develop new steel grades, such as abrasion-resistant steel, ultra-high-strength steel and linepipe steel,” Eussen continued. “Combined with the opportunity for customers to reduce their scope 3 emissions through Zeremis Carbon Lite and Zeremis Delivered, we continue to strengthen our position in a highly competitive steel market.”
These steels are is used in applications such as trucks and trailers, excavators, cranes, mining, and in pipelines for transporting gas, water and hydrogen.
The sampling line can automatically sample the entire production spectrum, from normal to ultra-high-strength steel, with steel thicknesses of up to 25 millimetres that can be cut. Samples are taken hot, and the capacity of the number of coils that can be sampled has thus substantially increased, Tata says.
Christian Koehl Germany
EU HRC prices inch up despite weak demand, lack of restocking
Domestic prices for European hot-rolled coil inched up on June 14 despite weak demand as buyers avoid re-stocking.
“Demand is very poor,” a distributor source said. “Customers are only focused on some projects and restocking activity is already down for this quarter.”
Some mills have pushed offers higher due to the changes in the safeguard measures. Some sources disagreed with this move, saying that weak market fundamentals do not support the higher prices.
“Why would mills increase prices in such a weak market,” a trader source said.
EU member states approved June 11 the European Commission’s proposal to extend the bloc’s steel safeguard measures.
The EU steel safeguard measures will start on July 1 with a new restriction cap of 15% on six countries that used to ship their HRC under the residual tariff-rate quota. As HRC imports from Japan, Taiwan, Vietnam and Egypt will likely be reduced as a result, Europe-based buyers will have to substitute the material with either European coil or alternative non-EU suppliers without country-specific quotas.
Platts assessed domestic prices for HRC in Northwest Europe up Eur5/mt on the day at Eur630/mt ex-works Ruhr on June 14.
Tradable values were reported at Eur630-650/mt EXW Ruhr.
Meanwhile, Platts assessed domestic prices for HRC in South Europe at Eur620/mt EXW Italy on June 14, down Eur5/mt on the day.
Offers were reported at Eur640-650/mt delivered Italy. Tradable values were reported at Eur620-630/mt delivered Italy.
Interest in imported HRC remains dull due to longer lead times and the proposed changes to the safeguard measures.
Platts assessed imported HRC in Northwest Europe stable on the day at Eur605/mt CIF Antwerp.
Offers for Turkey-origin material were reported at Eur630/mt CIF Antwerp, including anti-dumping duties.
Meanwhile, Platts assessed imported HRC in South Europe stable on the day at Eur600/mt CIF Italy.
Offers were reported at Eur600/mt CFR Italy.
Steel price still trumps environment among buyers
Most steel buyers remain motivated by price rather than environmental concerns, while the expected shift to the right in European politics could impact policy support for low-emission steelmaking, concluded a panel at the Kallanish Europe Steel Markets 2024 conference in Milan last week.
Speakers agreed that outside of potential adoption by automobile manufacturers, widespread demand for green steel is a long way from becoming an industry norm.
“I think we’re going to see a green premium in the end. It’s going to take a while, and yes … if I phone up a customer and say I have two coils, here are regular ones and here are green ones, one is a hundred or two hundred euros more, they’re going to go: ‘I’ll have the cheap one, please’,” said Julian Verden, managing director Europe at Stemcor.
Tommaso Sandrini, chief executive of S. Polo Lamiere SPA, noted that EU policy is likely to change following last week’s European Parliament election that saw big gains for parties on the right. Environmental concerns, moreover, were born from more peaceful and prosperous times. Demand for lower-emission steel and prioritising policies to sponsor production of lower emission-steel are not as pressing amid so much global unrest and economic uncertainty.
“The environment was a priority. Now, last weekend, I think we got a significant and clear message from the different European countries. It will change the priorities that the European regulators will have to follow,” Sandrini stated.
Lack of regulation around what constitutes green steel, while a source of frustration for producers, is arguably a competitive advantage for some steel sellers. Mario Borsese, co-founder of DP Trade, asserted that price is ultimately still the bottom line for buyers and sellers. “At the end of the day, [a service centre chief executive] is comparing prices, prices of green steel from producers, so called green steel producers because green steel is not yet regulated … He doesn’t care, he cares about the prices,” Borsese said.
Verden noted that younger people will be the drivers behind the adoption of cleaner steel processes, policies, and products, “I think it’s the young people who will force through the change. Old guys like me are probably still going to drive our Range Rovers, but the young kids are not going to fly around too much. They’re going to go on the train, they’re going to walk, they’re going to cycle and they’re going to be in our ear to reduce the massive pollution that our global industrialisation makes.”
Kristen DiLandro USA
Steel industry needs universally agreed-to carbon price: James Moss
Decarbonisation in Europe’s steel industry is complicated by cyclical headwinds, rising climate change costs and need for a clear carbon price. These were some of the challenges discussed by First River Consulting partner James Moss during Kallanish’s Europe Steel Markets 2024 conference in Milan.
“The discussion about decarbonisation in Europe is being had with the backdrop of either a structural or a deep cyclical change in demand and production,” says Moss.
These shifting supply and demand dynamics, along with the challenges of the green steel transition, will likely distort government decision-making to invest in facilities that should be allowed to die, Moss warns. He adds that the US once had a reputation that no facility ever died, but there have been several casualties over the last 10-20 years and large names in the industry have disappeared.
Another difference is the accounting of carbon costs in final product pricing.
“So just to be completely simplistic about it, there’s been an accounting error for the last 200 years. We [the US] have not counted carbon in our costs,” says Moss.
But US costs associated with climate change are starting to appear. One example is the difficulty in obtaining affordable home insurance in California and Florida because many insurers have stopped insuring homes in those states. This makes the insurer of last resort the state itself – whether it’s against wildfires or earthquakes in California, or hurricanes in Florida.
Since 2017, homeowner insurance exposure in those two states increased from $160 billion to $340 billion in seven years.
By including the cost of carbon in our cost of goods sold, costs will rise and drive price higher.
“So if hot metal goes up because iron coming out of a blast furnace has a carbon tax added to it, scrap will reflect that cost they track. And if scrap reflects that cost, DRI will reflect that cost. So all iron units are going up and prices will go up with them,” Moss adds.
For now, the market does not have a clear price for carbon. Moss says the market needs a clear internationally understood price for carbon if it is going to be calculated among costs. And understanding the true cost of steel production is crucial to avoid government interference.
John Isaacson USA
Green lead markets require standardisation
Green lead markets should have the same standardisation in every European country, according to Luciana Filizzola, GMH Gruppe’s director sustainability and communications.
“If every country in Europe has the same standardisation, it would be wonderful to promote the green lead market,” she said at the Kallanish Europe Steel Markets 2024 conference in Milan last week. GMH recommends prioritising low-CO2 products in tenders, both directly and indirectly, and a uniform classification system for green steel products, such as Germany’s Low Emission Steel Standard (LESS) labelling system.
Vulcan Green Steel vice president Arnaud Guerendel added: “There is no international standard and that is a pity!”
Guerendel noted international standardisation is currently facing a problem. He gave the example of one organisation, which is lobbying for and working under the definition of below 0.4 tonnes of CO2 emissions per tonne of steel production for Scope 3 emissions. But there is another range that has the general consensus of being considered “green” steel, which is at under 0.6t of CO2 emissions per tonne.
He opined one cannot make all grades of steel under the same carbon intensity. For example, producers can make a basic grade if they use scrap and green electricity, as it will have a very low product carbon footprint (PCF). However, very sophisticated grades cannot be made from scrap, and it will a completely different footprint.
Hydrogen-based direct reduced iron will therefore need to be used to achieve net-zero production of these highly sophisticated grades.
“There’s no international standard, between the EU, USA, and rest of the world,” Guerendel said. This is especially the case since China manufactures over 55% of global steel and India is soon expected to cross 200 million tonnes/year. He emphasised the need to set dialogue with those regions and standardise.
Suhita Poddar India