Spain’s automobile production, exports remain strong in May
Spain’s car industry saw its performance improve sequentially in May, Kallanish notes.
According to national automotive association Asociación Nacional de Fabricantes de Automóviles y Camiones (Anfac), output in May was 249,515 units, compared to 208,906 vehicles in April. However, this was 0.2% less versus the same month in 2023. Of the total, 78.1% were gasoline and diesel-powered automobiles. Five-month production amounted to 1.11 million units, a growth of 2.9% compared to January-May last year.
“It is positive that we are maintaining an increasing production rate, although growth is contained. The important thing is to close the year at above 2.5 million vehicles produced in Spain,” says Anfac general director José López-Tafall.
He however notes there has been a decline in EV business due to model changes and production readjustments. “It is a priority for manufacturers to sell more plug-in models, both in Spain and abroad. Without demand from this sector, it is difficult to have a large production volume. We are observing in other EU countries how the reduction of purchase subsidies, such as in Germany, generates a drop in sales of these vehicles.”
Spanish vehicle exports rose, supported by increasing demand in markets outside Europe and stable supplies to the EU. Shipments in May were at 221,354 units, compared to 181,996 units in the previous month and 0.3% higher than in May 2023.
European markets had a 93.5% share in Spanish deliveries in May, up 1.1 percentage points on-month and up 3.9pp on-year. Five-month exports improved 1.1% over the same period in 2023 to 983,338 vehicles, Anfac data show.
Todor Kirkov Bulgaria
Decarbonisation needs wholesale change, project realisation questionable: panel
CBAM and ETS are important to support low-emission steelmaking in Europe, but access to low-cost green energy and commitment from customers will be key. Technology makers are meanwhile ready for the expected boom in orders, but there are doubts over whether all the announced low-emission steelmaking projects will actually take place. So concluded a panel at Tuesday’s Fastmarkets International Iron Ore & Green Steel Summit 2024 in Vienna.
Echoing words from Midrex board member Stephen Montague earlier in the conference, “location, location, location” is key to DRI investments, pointed out H2 Green Steel commercial director global growth and business unit hydrogen Michael Lövgren. Besides having green hydrogen and therefore green energy, offtakers need to be on board with paying premiums for higher-cost produced steel.
“The whole value chain has to entirely change,” GravitHY chief growth officer Alice Vieillefosse stressed at the event attended by Kallanish. Commitment and investments are required from both policymakers and the private sector, with electricity grids in need of revamping.
It is one thing to have raw materials access, but the French government is keen to have local competency in the production of the intermediate product – in this case, direct reduced iron/hot-briquetted iron. That is why it is supporting GravitHY, she added.
Bernhard Hiebl, head of technology beneficiation, agglomeration and direct reduction at Primetals, said his firm has the capacity to cater for the plethora of expected low-emission steelmaking projects. “The question is, how many of these projects will actually happen in the coming years? … In principle, we are ready. We are seeing that many announced projects do not start overnight.”
The solution to having to contend with lower-grade iron ore supply, meanwhile, will be to use an electric smelter. “This will be the first step to substituting blast furnace operation,” Hiebl observed. All eyes will be on the first smelter at thyssenkrupp’s Duisburg plant when it comes into operation in 2-3 years, he added.
“From the market itself, there is not much interest right now [in smelters]; everyone is talking about pellets, but at the same time we know the pellets are not there,” he added. Another option being explored by Primetals is to feed sinter into DRI plants.
HBI production will be competitive in certain locations in Europe, provided it has government support and a sufficient electrical grid, Hiebl noted.
The HBI business case works in Boden, said Lövgren, and H2GS is also looking at Portugal as a viable location for HBI production. “To create sustainable value chains, one key ingredient will be to decouple the iron from the steelmaking in the value chain,” he added.
Adam Smith Poland
EU extends safeguards until 2026, Eurofer welcomes move
The EU has extended steel safeguard measures for another two years, aiming to stabilise the market amid high import penetration levels, it says in a 25 June note in its official journal.
It has also implemented, effective 1 July, the 15% cap per origin in the “other country” hot rolled coil tariff-rate quota, which it proposed last month (see Kallanish passim).
The European Commission (EC) found the EU’s steel industry is facing significant pressure from high and increasing imports from major steel-exporting countries. This pressure has been worsened by the influx of steel from new origins, exacerbating existing import pressures. The EC also confirmed persistent overcapacity and expects further capacity increases amid slow EU demand growth, Kallanish notes.
As the EU market remains attractive due to its size and prices, and given global overcapacity, numerous trade barriers, and market outlooks, the EC concluded that if safeguards lapse, imports would likely increase. This would further pressure the fragile EU steel industry and cause serious injury. Therefore, safeguard measures are necessary to remain in place to prevent or remedy such injury, it notes.
Imports from non-traditional suppliers, like Algeria, Egypt, Indonesia, Malaysia, and Vietnam, surged during 2022-2023 despite the safeguard measure. This caused significant market disturbances and sometimes undermined the effectiveness of the safeguard, the EC says.
Eurofer has welcomed the decision but emphasised the need for a long-term solution to address global excess capacity, which is four times the size of EU steel demand.
“Europe has become a favourite export market for carbon-intensive excess capacity, while we strive for decarbonisation leadership. This is a structural problem that poses an existential threat to all EU clean tech value chains at a crucial time for our transition. Safeguards will cease in just two years from now. We need to find a new, long-term solution to address this situation,” says Eurofer director general Axel Eggert.
The Commission highlights that since 2021, steel import penetration in the EU has exceeded pre-safeguard levels, adversely impacting the industry. Despite the safeguard, global excess capacity increased by nearly 50 million tonnes from 2019 to 2023, with an additional 158mt expected by 2026. This surge is driven by regions like Southeast Asia, the Middle East, and North Africa, where capacity expansions far outstrip local demand, partly due to Chinese investments.
“As a new EU cycle is about to begin, we call on all European institutions to tackle excess capacity as a matter of urgency in the upcoming months. We stand ready to support them in this endeavour,” Eggert notes.
Elina Virchenko UAE
Wibe Group partners with Sweden’s SSAB to use fossil-free steel in cable management systems
Under the agreement announced June 25, Wibe Group has committed to using the fossil-free steel in its cable management systems, such as cable ladders and cable trays.
Starting from 2026, Wibe Group will begin receiving small batches of steel produced without carbon emissions and aims to scale up annually as SSAB’s fossil-free production capacity grows.
Wibe Group would be able to reduce its carbon footprint by 90% by using the fossil-free material, it said.
SSAB collaborates with iron ore producer LKAB and energy company Vattenfall as part of the HYBRIT initiative to develop a value chain for fossil-free iron and steel production, which virtually eliminates CO2 emissions in steelmaking by replacing coking coal with fossil-free power and hydrogen.
SSAB began delivering shipments of fossil-free steel in 2021 and launched its second emissions-free product SSAB Zero using recycled scrap in 2023.
The steelmaker aims to scale up production of its carbon emission-free offering in 2026.
When commenting on the agreement, Wibe Group CEO Patrick Arcidiacono said it was “an important and major step” in the company’s sustainability journey.
“This initiative from SSAB does not only align with our vision but also with our owner Storskogen’s goal to reach net zero by 2045,” Arcidiacono said.
SSAB VP of Sustainable Business Thomas Hornfeldt said the steelmaker was “happy to welcome Wibe Group as a fossil-free partner.” He added that SSAB wanted to “cut emissions and create a fossil-free value chain with customers and partners.”
Platts, part of S&P Global Commodity Insights, assessed the daily European HRC carbon-accounted steel premium at $134.10/mt June 24, up from $109.58/mt at the start of 2024.
European coils market prepares for safeguard duty start amid quiet trading
“People are worried about import safeguard measures and the HRC coil cap,” a service center source said. “A lot of them will need to pay safeguards on the 1st of July.”
The EU steel safeguard measures include a new restriction cap of 15% on six countries that used to ship their HRC under the residual tariff-rate quota: Egypt, Vietnam, Japan, Taiwan, Australia, and Brazil.
Sources said that even though market participants are discussing adding duty-sharing clauses to contracts in which buyer and seller share the duty costs, it is unlikely to be sufficient to alleviate the impact of the new safeguard measures, and that buyers should think of exploring opportunities in countries that are not subject to the 15% cap.
One Benelux source said that traders are trying to get exclusive contracts with one Taiwanese mill because, as the predominant exporter of Taiwanese HRC to Europe, it could navigate the 15% cap.
“Duty sharing agreements are in discussions,” another service center source said. “But I don’t think it will be a disrupting event for quotas. I don’t think having support from sharing duties will convince buyers to buy. It’s better to find new opportunities in other countries that are not subject to the 15% cap such as Indonesia, Malaysia, and Saudi Arabia.”
Sources also agreed that demand and trading activity remained low, heading into the summer holidays.
“Real demand is down 50%-60% as compared to last year,” the source said. “The level of transaction in the European market is limited. It is a very concerning situation margin-wise and volume-wise.”
Platts assessed Northwest European HRC at Eur630/mt June 25, down Eur5/mt on the day.
Meanwhile, Platts assessed domestic prices for HRC in South Europe Eur625/mt EXW Italy June 25, up Eur6/mt on the day.
Interest in imported HRC also remained dull due to impact from the new safeguard measures.
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 25, unchanged on the day.
European HRC prices edge down on emergence of bearish sentiment
Demand from the main steel-consuming sectors remained limited, with oversupply adding downward pressure to HRC prices, Fastmarkets understands.
Fastmarkets calculated its daily steel hot-rolled coil index domestic, exw Northern Europe at €630.00 ($675.22) per tonne on Tuesday, down by €2.00 per tonne from €632.00 on Monday.
The index was down by €2.50 per tonne week on week and by €7.37 per tonne month on month.
Offers of HRC in Northern Europe varied between €640 per tonne ex-works and €650 per tonne ex-works, sources told Fastmarkets.
For larger volumes, however, sources said that mills in the region were likely to agree to sell at about €630 per tonne ex-works.
Market participants estimated the tradable price level at €620-630 per tonne ex-works.
“Demand for HRC is still slow. Besides, the summer period is coming, when trading is not so active,” a producer source told Fastmarkets.
The source said that demand from the automotive sector was also not so good recently, with HRC purchases recently postponed, while demand from the construction sector was steady. The source added, however, htat overall sentiment was less positive.
A distributor source told Fastmarkets that negotiations between producers and consumers for the long-term half-year contracts were continuing, with consumers pushing for lower levels because spot prices for the first half of the year appeared to be €50-60 per tonne lower than long-term contract prices.
“Producers are hoping that the new [EU] safeguard measures will have some impact on the market as of the beginning of July,” the distributor source said, but added that such optimism was probably misplaced.
Fastmarkets calculated its corresponding daily steel hot-rolled coil index domestic, exw Italy at €625.00 per tonne on Tuesday, down by €2.50 per tonne from €627.50 per tonne the previous day.
The Italian index was down by €4.58 per tonne week on week and by €5.00 per tonne month on month.
Suppliers in Italy were heard offering HRC at €640-650 per tonne delivered, which nets back to €630-640 per tonne ex-works.
But market participants put the workable price at €620-630 per tonne ex-works.
Demand in Italy also remained weak, sources told Fastmarkets.
In terms of flat steel imports, from the start of July there will be more clarity on the EU safeguard taxes, which will need to be paid by Asian suppliers, including Japan, Taiwan, and Vietnam.
Published by: Darina Kahramanova
Assofermet demands pre-June contract 15% safeguard cap exemption
The revised safeguard measures announced by the European Commission pose a significant risk to EU steel users, warns Italian steel trade association Assofermet.
The Commission confirmed on Tuesday the extension of safeguards till 2026 and the imposition of a 15% cap per origin over the “other country” tariff-rate quota (TRQ) for hot rolled coil.
According to Assofermet, there will be an annual shortage of over 1.6 million tonnes of steel, leading to increased costs for steel importers and processors who will face a decline in competitiveness. The association has been advocating for a relaxation of safeguards and requested that contracts signed before 31 May 2024 should not be subject to the 15% cap.
“We believe that the steel purchased by this date should follow the rules under the Safeguard measures currently in place – it would not be fair to penalise trade deals that were concluded before the EU Commission’s notification to the WTO … These are contracts signed by operators in complete good faith, relying on the progressive liberalisation of the measure. On the contrary, the rule appears to be extremely worsening compared to current conditions: the liberalisation rate has even dropped to 1%,” Assofermet says in a note sent to Kallanish.
The association has also examined the safeguard and Carbon Border Adjustment Mechanism (CBAM) overlap for the first half of 2026. The two measures are overseen by different departments at the European Commission; therefore, the implementation of both measures may result in double taxation.
“We have informed the Ministry about the potential impact of safeguard and CBAM on the cost of steel, which will have a ripple effect on EU manufacturing and the overall economy,” Assofermet states. It aims to assist institutions by offering practical proposals to minimise the adverse effects on the sectors it represents.
Natalia Capra France