EU prolongs steel safeguard measure until June 2026
The European Commission published today an implementing regulation confirming the extension of the current steel safeguard measure for two more years, until June 2026.
The regulation also adjusts the functioning of the measure, to adapt it to market conditions.
This decision follows an investigation requested by fourteen EU Member States, which showed that the safeguard measure continues to be necessary to prevent or remedy serious injury to the EU’s steel industry.
The European Commission explains that the prolongation and adjustments are justified by a combination of factors that resulted in significant import pressure on the Union market:
- high levels of global steel overcapacity and the surge of exports from China to third countries, notably in Asia, resulting in increased exports from those third countries to the EU;
- the increased number of trade defence measures and other trade restrictive measures imposed by other third countries, and;
- the significant reduction of demand in the EU.
Next steps
The technical adjustments will enter into force on 1 July 2024.
The measure will expire on 30 June 2026, eight years after its first imposition, which is the maximum application period of a safeguard measure allowed under EU and WTO rules.
The Commission may still review the functioning of the measure before 30 June 2026 if it considers that further adjustments are necessary.
European HRC prices remain stable on low demand
Domestic prices for European hot-rolled coil remained stable June 24 on low demand and muted activity in the market.
“Market has been quiet because inventories are high,” a service center source said. “Everybody is looking for orders and consumption is low.”
Platts assessed Northwest European HRC stable on the day at Eur635/mt June 24.
Sources said that a lack of production cuts has put pressure on mills, whose margins have diminished.
“Capacities are not being reduced,” the service center source added. “There is a lot of pressure from the production side, and there is no margins for mills.”
A similar environment persisted in South Europe, with poor demand and negative market sentiment.
“Demand is very poor, and no improvement is expected anytime soon,” an Italy-based distributor source said.
Platts assessed domestic prices for HRC in South Europe stable on the day at Eur619/mt EXW Italy June 24.
Interest in imported HRC remained dull in light of the changes to the safeguard measures.
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 imported HRC in Northwest Europe stable on the day at Eur609/mt CIF Antwerp.
Meanwhile, Platts assessed imported HRC in South Europe stable at Eur595/mt CIF Italy, down Eur5 on the day.
Offers for Asia-origin and Turkey-origin material were reported at Eur600/mt CIF Italy.
Buying interest for carbon accounted HRC was heard to remain muted as well. Platts assessed the carbon-accounted premium for HRC in Europe at Eur125/mt June 24, unchanged on the day.
Devbrat Saha
Liberty Czestochowa enters receivership, still seeking production restart
Troubled Polish steelmaker Liberty Czestochowa has been directed into receivership. Liberty Group tells Kallanish it is considering legal options and remains committed to the Polish heavy plate mill’s production restart.
Talk has been circulating for weeks of the plate maker entering insolvency proceedings, with its difficult financial situation and lack of production being discussed at a recent industry event.
“We are disappointed with the Court’s decision, which is based on the action of a single, small supplier. We are now considering our legal options but continue to be committed to the restart of LIBERTY Czestochowa,” a Liberty spokesperson says.
Last month, Tomasz Slezak, the chief executive of Poland’s state-owned Weglokoks, said his firm would consider acquiring Czestochowa if the opportunity arose. The mill’s heavy plate output will be in demand from Polish offshore wind power investments and for defence purposes, making it an important plant for Poland’s national security, he pointed out.
The Polish plant said in March it was gearing up for resuming production following a long period of stoppage. Former Sanjeev Gupta advisor Raghav Aggarwal was brought in to lead the firm’s “war cabinet”, supporting the management and Liberty European upstream businesses chief executive Theuns Victor in implementing a turnaround plan.
The mill’s trade unions meanwhile met with the Czestochowa City Council to highlight the steelworks’ need for working capital, resulting in the Council wording an appeal for help to the Polish government.
Liberty Czestochowa has a 700,000 tonnes/year EAF and 1.2 million t/y heavy plate capacity. Its operational problems have mirrored those at Liberty’s other mills in Central and Eastern Europe.
Adam Smith Poland
Europe’s steelmakers should give up ironmaking: GravitHy’s Noldin
Steelmakers in Europe should give up ironmaking to specialist companies and focus on their core competency of steelmaking and value addition, says José Noldin, chief executive of prospective France-based low-emission ironmaker GravitHy.
The firm aims to commission its plant in Fos-sur-Mer by 2028 and will have its own captive hydrogen production. The location was chosen for its access to land, water and especially electricity. France has a stable and reliable grid system which is fed by a clean, low-CO2 energy mix, and GravitHy will be connected to the grid, Noldin said at Monday’s Fastmarkets International Iron Ore & Green Steel Summit 2024 conference in Vienna attended by Kallanish.
The firm is looking at other locations for further plants. One of these is Finland but the majority are outside of Europe due to more favourable conditions for producing green iron, he noted. “We believe iron production can stay in Europe but it doesn’t need to be only in Europe,” Noldin said.
The main enablers needed for decarbonisation to take place are access to different financial instruments for capital and operational expenditure, and the need for government to create demand for green steel. The automotive sector has started buying green steel already, but public procurement is also necessary to create sufficient demand, he noted. Moreover, clear green steel standards are needed to avoid greenwashing.
Recent years have seen lots of hydrogen project announcements based on enthusiasm, Noldin pointed out. “There was lots of hype … You needed to be seen doing something with hydrogen.” However, the fundamentals have not been there.
“The market is coming to its senses. For good projects, the money is there. It’s a question of risk profile for the different investors … and how early or mature each one would like to see the different opportunities … There is a genuine interest,” he added.
In terms of markets to sell green HBI to, “we need to generate a snowball effect,” Noldin said. When one market becomes really committed, other customers will follow, the ceo noted, adding that “a combination of carrot and stick” is necessary. The EU is a good location for this as the Green Deal enshrines into law the need to deliver green products.
Europe alone is likely to see 15-30 million tonnes/year of merchant metallics demand by 2035.
Ideally, there should be a sufficient number of merchant metallics producers to create security of supply and liquidity in the market, Noldin said, describing this as his “dream”. The market is likely to be a combination of spot and long-term contract business.
“European iron and steel can be competitive but it’s a competitive based on sustainability. We need to look beyond pricing and cost criteria. Transparency is key. Traceability is key. Circularity is key,” the ceo said. “We are not competing for the same applications” as the cheap steel from other countries, he concluded.
Adam Smith Poland
Ukraine ore exports recover, further expansion unlikely: Zinchenko
Ukraine’s seaborne iron ore shipments have stabilised this year, and are outmuscling Russian supply in China and Turkey, but there is little room for further growth due to electricity and labour shortages, according to GMK Center chief executive Stanislav Zinchenko.
Following the outbreak of war with Russia, Ukrainian exporters creatively turned to shipping cargoes by river to Romanian Black Sea Ports or by rail to Polish Baltic Sea ports for onward shipment. While this did not lead to increased export volumes, it was “key” to miners’ survival in 2022 and 2023, Zinchenko said at the Fastmarkets International Iron Ore & Green Steel Summit 2024 conference in Vienna attended by Kallanish.
Since the Ukrainian sea corridor was set up, several successful cases of shipment have enabled reduced insurance costs and seen iron ore shipments return to 50% of pre-war volumes, with lead times also back to pre-war levels.
While Ukrainian volumes are recovering, Russian iron ore export geography has narrowed, Zinchenko noted. Ukraine accounted for over 50% of iron ore pellet tonnages imported by Turkey in the first quarter, while Russia-origin imports fell 70%. In China, Ukraine recovered to supply more iron ore than Russia. In Europe, despite no sanctions on iron ore, “steelmakers are voluntarily refusing to import from Russia,” Zinchenko said. Lower European sinter feed demand is however impacting Ukrainian miners, he added.
The ceo says electricity shortages, amid Russian attacks on Ukrainian energy infrastructure, will prevent Ukrainian iron ore export growth. At least 80% of electricity needs are supplied from the EU, making energy in Ukraine costlier than it is in the bloc. If iron ore prices drop below $100/tonne, therefore, Ukrainian exports will become unprofitable and output will decline.
Moreover, labour shortages due to army conscription will hamper any expansion of operations.
Ukraine could however position itself as a supplier of green metallics after the war ends. While the green DRI making push started in Europe, the momentum is shifting to the Middle East thanks to the region’s ideal conditions. Ukraine is also well-suited to provide this material. The country has the potential to supply 20-25 million tonnes/year of low-emission merchant DR feed, but the demand for this has to be created and premiums agreed on, he concluded.
Adam Smith Poland