German steel production recovery loses momentum
In May, crude steel production at German mills totalled 3.19 million tonnes, 2% lower than in May last year, according to latest figures by national steel federation WV Stahl.
It is the first month of this year that saw a lower output than the corresponding 2023 month, which is why the federation states that the “recovery of Germany’s steel production loses momentum.” The apparent recovery, however, so far is questionable and more an expression of wishful thinking, Kallanish understands.
Although previous months had seen a slight increase of output year-on-year, WV Stahl in April still expressed an expectation of a sustained trend for the better. It explained the increases with a cyclical restocking that caught up on the notable declines seen last year.
Over the period from January through May, output totalled 16.17mt, 4% higher than the first five months of 2023. The recovery at electric-arc furnace mills (+6.5%) was more pronounced than for oxygen-route mills (+2.5%), attributable to the base effect that EAF mills last year kept production low due to peaking electricity prices.
Christian Koehl Germany
German machinery exports further decline in Q1
The nominal decline amounted to 4.6% compared with the previous year, according to latest figures by the Federal Statistics Office. Adjusted for prices, the result was 7.0% below the previous year’s figure. A total of €50 billion ($55 billion) worth of machinery and equipment was exported.
Deliveries to the European Union’s partner countries fell more sharply than to the rest of the world, a trend all the more significant as the EU is by far the most important sales markets, VDMA notes. Still, VDMA believes that the EU economy is now on a moderate recovery path.
“Private consumption is likely to be the driving force behind this recovery. However, the capital goods industry will usually benefit only after a delay of several months,” Kallanish hears form VDMA economist Benedikt Jeske.
Demand from the US, the largest single market for German machinery exporters, was already weakening at the end of last year. However, a double-digit nominal growth of 12.6% was still achieved for 2023 as a whole. In the first quarter of 2024, growth only reached a small nominal increase of 2.1%.
Business in China remains weak for machinery exporters. In the first quarter of 2024, exports from Germany were down 2.1% in nominal terms from the previous year’s result, which was already not very high.
Some large emerging markets such as Mexico, however, are developing well. Machinery exports from Germany to Mexico rose by a nominal 22.9% in the first quarter, having already increased significantly in the previous year, VDMA notes.
Christian Koehl Germany
Global crude steel output recovers in May
May data left crude steel output over January-May at 793.907mt, up just 0.09% y-o-y. Asia saw output in May rise 6.4% m-o-m and 1.7% y-o-y at 121.691mt, with China alone seeing increases of 8.1% m-o-m and 2.7% y-o-y to 92.86mt. Over January-May, Chinese output totalled 444.838mt, up 1.42% y-o-y.
India has had a weaker start to the year, but is catching up. May output was up 0.7% m-o-m and 3.5% y-o-y at 7.168mt, while year-to-date output was still down 7.17% at 57.483mt.
The European Union saw May output grow 2.9% m-o-m and 1.8% y-o-y to 11.665mt, while five-month output was up 0.07% at 56.114mt. Turkey is recovering more aggressively from its weak start to the year with increases of 14.9% m-o-m and 11.6% y-o-y to 3.213mt in May. This still left January-May output down 16.5% at 12.979mt.
North American steel output increased 4.7% m-o-m but was down 0.9% y-o-y at 9.383mt in May, and up 3.13% at 46.655mt over five months. In the Middle East steel output gained 2.9% m-o-m and 4.6% y-o-y to 5.216mt in May. But output was still down 7.11% at 22.267mt from January-May.
Russia and Ukraine have both seen production increase in May, although Ukrainian output remains significantly lower y-o-y. Russia produced 6.32mt of steel in May, up.3.4% m-o-m but down 0.9% y-o-y. Year-to-date output was up 2.55% at 31.663mt. Ukrainian steel output was up 3.2% m-o-m and 2.8% y-o-y at 737,637t in May. Over January-May this is still down 23.8% at 2.392mt.
European HRC prices mostly steady as some mills offer discounts
“Some mills like ArcelorMittal are more aggressive as they need to fill orderbooks,” a trader source said. “EU HRC is workable around Eur600-610/mt EXW, and one mill recently sold a large volume at Eur600/mt EXW Ruhr.”
Some mills were also heard to have stayed firm on higher prices.
“One mill is also staying firm at Eur650-670/mt EXW Ruhr which could be why prices appear more firm,” the source said.
Sources agreed that the market fundamentals remain unchanged, with low activity and poor demand.
“Market is slow,” another trader source said. “Everybody thinks we are at the bottom. Demand is still not there. Construction and automotive sectors are not doing very well.”
Platts assessed Northwest European HRC stable on the day at Eur635/mt June 21.
Buying interest for carbon accounted HRC was heard to remain muted as well, with offers for a premium at Eur100-150/mt for variable CO2 emission levels and scopes. Platts assessed the carbon-accounted premium for HRC in Europe at Eur125/mt June 21, unchanged on the day.
HRC prices remain flat across Europe amid sluggish buying
Fastmarkets calculated its daily steel hot-rolled coil index domestic, exw Northern Europe at €630.00 ($675.51) per tonne on Friday, down by €0.21 per tonne from €630.21 per tonne on Thursday June 20.
The index was down by €5.00 per tonne week on week and by €8.75 per tonne month on month.
Transactions for small lots of HRC were heard done at €630 per tonne ex-works in Germany and the Benelux area.
Offer prices from integrated mills in the region varied in the range of €630-645 per tonne ex-works for August-delivery HRC.
There was market chatter about transactions done at €600 per tonne ex-works for July-delivery HRC from one European supplier, who withdrew from the market after that. But this price was not widely available for the spot market, sources said.
Trading was persistently slow in the region amid limited end-user demand and excessive supply, sources said.
“All stockholders and steel service centers have sufficient stock for the current levels of demand and tend to maintain those levels medium to low, so European mills fight for orders,” a steel service center source in Germany said.
Fastmarkets calculated its corresponding daily steel hot-rolled coil index domestic, exw Italy at €628.75 per tonne on Friday, unchanged from Thursday.
The index was down by €3.13 per tonne week on week and by €5.00 per tonne month on month.
August-delivery HRC from a local mill was heard offered at €640-650 per tonne delivered (€630-640 per tonne ex-works), and several sources said that some July-delivery volumes were still available.
Buyer estimates of tradable prices were around €610-630 per tonne ex-works.
In the secondary market, 3-6mm HR sheet was still heard traded in the range of €710-730 per tonne CPT, fairly stable over the past seven days.
The market for overseas coil remained quiet, with most buyers holding back due to either looming risks related to new EU import safeguards or uncompetitive prices for import HRC.
Several sources in Italy reported HRC offers from Taiwan, Japan and Malaysia for August-shipment coil at €600-625 per tonne CFR.
Indian mills were reportedly staying out of the market.
Turkish mills reportedly increased offers by €30 per tonne to around €640 per tonne CFR, including the EU anti-dumping duty, before stepping away for the Eid-al-Adha holiday on June 16-21.
Even though Turkey was said to be the only “safe origin” to import from due to a sufficient quota, the offered price was “too close to the European mills’ to be workable,” sources said.
Published by: Julia Bolotova
Steel hollow sections prices in Europe fall on weak fundamentals
Fastmarkets’ monthly price assessment for steel sections (medium) domestic, delivered Northern Europe was €750-790 ($804- 847) per tonne on Wednesday, down by €30-40 per tonne from €780-830 per tonne a month earlier.
Fastmarkets’ monthly price assessment for steel sections (medium) domestic, delivered Southern Europe was €750-790 per tonne on Wednesday, down by €30-40 per tonne month on month from €780-830 per tonne.
Hot-rolled coil feedstock costs also fell in the month. However, sources said they believe raw material prices will rise next month due to an expected 15% cap on HRC other countries safeguarding quotas.
Fastmarkets’ daily calculation of its steel hot-rolled coil index domestic, exw Northern Europe was €630.88 per tonne on Wednesday, down by €7.45 per tonne from €638.33 per tonne a month earlier on May 20.
HRC cost levels were “too high” compared with sales prices for sections, leading to slim profit margins, a producer source said.
“It will be very difficult to make a profit if the raw material will increase due to changes to the safeguard quotas,” the producer source said. “Sections prices will have to increase more with the raw material.”
Consumption from the construction sector continued to be weak steel demand in Europe will begin to slow even more in the coming weeks, with summer holidays in some countries and regions in northern Europe commencing, sources said.
Published by: Holly Chant