Brussels imposes provisional duties on Chinese BEV imports
Brussels on Thursday imposed provisional countervailing duties on China-made battery electric vehicles as planned, though negotiations with Beijing continue, Kallanish reports.
The European Commission confirmed the additional tariffs on BEVs have been slightly reduced based on comments on the accuracy of the calculations submitted by interested parties. The investigation resulted in individual duties based on carmakers’ circumstances and cooperation.
Chinese carmakers BYD will be subject to an additional tariff of 17.4%. Geely’s tariff now stands at 19.9% and state-owned manufacturer SAIC’s – the parent company of MG Motors – at 37.6%. The average duty for BEV producers in China that cooperated with the EC, but were not sampled, is 20.8%. Non-cooperating firms will be hit with an import tariff of 37.6%, on top of the existing 10% duty.
These provisional duties will apply from 5 July for a maximum duration of four months, when a final decision must be taken through a vote by EU member states. “When adopted, this decision would make the duties definitive for a period of five years,” the EC explains.
Following an “exchange of views” between EC’s vice-president Valdis Dombrovskis and Chinese trade minister Wang Wentao, bilateral consultations have “intensified,” the EC adds. Contacts are continuing on a “technical level” aimed at reaching a WTO-compatible solution, it notes.
“Any negotiated outcome to the investigation must be effective in addressing the injurious forms of subsidisation identified [in China],” the commission states.
A spokesperson for the Chinese commerce ministry suggested on Thursday that despite Beijing’s “strong opposition” to the investigation, there is hope for a positive outcome.
“There is still a 4-month window before the final ruling. We hope that the EU will work with China to meet each other halfway, show sincerity, speed up the consultation process, and reach a solution acceptable to both sides as soon as possible based on facts and rules,” says He Yadong. “China hopes that the EU will seriously listen to the voices within the alliance and conduct consultations with China rationally and pragmatically to avoid anti-subsidy measures that harm the mutually beneficial cooperation and common development of the China-EU automobile industry,” he adds.
It follows the German auto association VDA’s statement saying the tariffs will harm the interests of European manufacturers operating in China, but may also restrict European access to critical raw materials.
Italy’s Arvedi signs deal with Gestamp to supply low emission steel
Italian steelmaker Arvedi has signed an agreement with Spanish multinational Gestamp on the supply of its low-emission steel brand, Arvzero, the company said July 3.
The agreement will also allow Gestamp, which makes metal components for the automotive industry, to return scrap steel from the production of stamping parts to Acciaieria Arvedi, Italy’s largest flat steel propducer.
The steel supply deal will have immediate effect, an Arvedi spokesperson told S&P Global Commodity Insights, although neither company gave any details on the volume involved.
“With this agreement, we continue our circular economy roadmap in line with Gestamp’s ESG strategy,” Gestamp Chief Purchasing Officer Javier Imaz said.
“Our collaboration represents an important step for steel products with a sustainable supply chain,” Acciaieria Arvedi Vice President Fabio Baldrighi said.
Acciaieria Arvedi produces hot and cold-rolled flat products, welded tubes, and precision strips, with a total yearly production of over 5 million mt. It manufactures steel coil from recycled scrap for various sectors, including the automotive industry.
The company makes the Arvzero carbon steel product at its Cremona works and processes it at the Cremona and Trieste sites. All direct emissions from the production process are compensated in accordance with the parameters set by Scope 1 and Scope 2 of the Greenhouse Gas Protocol, the company said.
Many companies in different industries across the steel value chain are buying increased volumes of low-carbon and low-stainless “green” steel to reduce their Scope 2 and 3 emissions, closing supply agreements to secure low-emission steel for their products.
Platts, part of Commodity Insights, assessed Northwest European hot-rolled carbon-accounted coil down Eur10/mt on the day at Eur750/mt ($805.275/mt) ex-works Ruhr July 2. The assessment was calculated in line with the sum of the Platts daily carbon-accounted steel premium (CASP) assessment and Platts daily hot-rolled coil price assessment in Northwest Europe.
EU shipping emissions plunge in 2023 but Red Sea tensions could reverse trend
Sluggish industrial activity and declining imports of goods dragged carbon emissions from Europe’s shipping sector down sharply in 2023, but emissions are widely expected to be either marginally up or stable this year as many vessels sail longer distances to circumvent attacks near the Red Sea.
Ships traveling within the EU territorial waters emitted 116.6 million mtCO2e in 2023, down 15% from the previous year, an analysis of provisional data released by the European Maritime Safety Agency showed.
Containerships and tankers were the biggest emitters, releasing 38 million mtCO2e and 26 million mtCO2e respectively in 2023. Almost all ships types (container, tanker, dry bulk, ferry, gas, RoRo) except for cruise ships recorded year-on-year falls in emissions.
Mattia Ferracchiato, head of carbon markets at BRS Shipbrokers, said the emissions decline was a consequence of weaker demand for commodities and consumer goods in Europe.
“[There was] lower demand for coal and energy raw materials from non-EU countries, especially due to the ban on Russian imports. Inflation has deteriorated the purchasing power of European citizens. Reduced European production led to lower imports of metals and cement,” he said.
2024 emissions outlook
Looking forward, EU shipping emissions are likely to stay at similar levels in 2024 even as emissions from the global shipping sector rise due to the escalation of tensions in the Middle East.
“We believe that potential increases caused by the situation in the Red Sea could be offset [in European terms] by the cancelation of emissions from trips between small islands, to places like the Canary Islands, and the still slow economic recovery in the EU,” added Ferracchiato.
“Additionally, please remember that this year, emissions will be monitored much more precisely than in previous years, where companies often reported emissions differently for the same identical voyage. Now that the cost of CO2 is significant, ship speeds may be reduced, and some initial use of green fuel blends might already begin this year, helping to further reduce total ETS emissions.”
An escalation in attacks by Yemen’s Houthi rebels on merchant shipping in response to the Israel-Hamas war has pushed a number of shipping companies to divert vessels from the Suez Canal and go via the longer Cape of Good Hope route.
Rerouting vessels from the Suez Canal to the Cape of Good Hope increases bunker consumption due to the longer voyage and typically higher speeds travelled at, raising emissions.
Among container ships, a 1% increase in speed typically leads to a 2.2% rise in fuel consumption, according to a recent report by the United Nations Conference on Trade and Development.
For example, accelerating from 14 to 16 knots increases fuel use per mile by 31%. As a result, the longer distances caused by rerouting from the Suez Canal to the Cape of Good Hope imply a 70% increase in greenhouse gas emissions for a round trip from Singapore to Northern Europe, UNCTAD said.
Shipping in EU ETS
The fall in shipping emissions last year also comes amid a backdrop of economic malaise in Europe.
Emissions from the industrial sector have been down due to reduced output and efficiency gains, which are mainly visible in cement, iron and steel.
This comes as the EU continues to face macroeconomic headwinds due to high inflation, weak manufacturing data and weak industrial output.
Regulated CO2 emissions from power plants and factories under the EU Emissions Trading System in 2023 also fell 15.5% from 2022, the steepest decline since this compliance carbon market was established in 2005.
The plunge in emissions was also due to a substantial increase in renewable electricity production led by wind and solar, at the expense of both coal and gas as the bloc’s power sector has made significant strides to decarbonize its operations.
From Jan. 1, 2024, the maritime sector was also incorporated in to the EU ETS. Demand from this sector for trading EUAs is still very slow, according to trading sources.
This lack of interest is also because the EU has only required shipping companies to surrender EUAs for the first time by Sept. 30, 2025 for this year’s emissions.
The cost of the EU ETS for the entire maritime industry is expected to be Eur2.2 billion in 2024, assuming emissions in are in line with 2023 and an average price of Eur70/mtCO2, according to BRS Shipbrokers.
Platts, part of S&P Global Commodity Insights, assessed the EUA contract for December delivery at Eur70.92/mtCO2e ($77.14/mtCO2e) on July 2.
The EU has also agreed on a phase-in period to give the industry some preparation time, with the ETS covering 40% of the emissions in 2024, 70% in 2025 and 100% from 2026 onward.
This industry is expected to be spot price takers in the world’s largest compliance carbon market.
The shipping sector is projected to add emissions of 90 million mtCO2e this year and 86 million mtCO2e in 2025, as part of the EU ETS supply volumes, according to Commodity Insights estimates.
European long steel prices remain largely stable even as mills push offers higher
The Northwest European prices for rebar and medium sections remained largely stable in the week ended July 3, even as mills were trying push offers higher.
“Mills, pretending to have good orderbooks, are pushing for price increases,” a distributor source said. “Merchant bar and beams will increase by 15 euros.”
Sources said that there was some uptick in trading activity, however construction delays were affecting it.
“Demand depends on a day-to-day basis,” the source said. “We have some demand, but construction delays due to the weather are not helping this. We hope to have some more demand soon.”
Platts assessed the price of Northwest European rebar at Eur615/mt ex-works, up Eur15/mt on the week.
A deal for 150mt was heard at Eur615/mt ex-works Benelux, and tradable values were heard at the same levels.
Meanwhile, Platts assessed the price of European medium sections stable on the week at Eur750/mt delivered Benelux.
A deal for 2,000mt was reported at Eur750/mt delivered Benelux, and workable levels were reported at Eur750-760/mt delivered Benelux.
Platts is part of S&P Global Commodity Insights.
European HRC prices largely steady in quiet market
In Europe, domestic prices for hot-rolled coil saw some minor downward movement July 3, as market sources prepare for a quiet summer ahead.
The current muted activity in the coils market is being caused by a combination of low demand and high levels of stock, with some participants testing the market at higher offers, according to market sources.
“Demand is extremely low,” a trader said.
“Stock levels are still quite high.” a service center source said.
Some Southern European sources have also commented on the incoming Italian public holiday period in August, where several participants will be less active.
“[In August] not working during this period so there will not be any movement.” a trader said.
The announcement this week of the new EU import quotas has also been a talking point for the market. Participants have seen a shift in imports to countries outside the quota, such as South Korea and Saudi Arabia. However, these are for larger tonnage levels where economies of scale are present, market sources said.
“From June up until now the prices have been very weak,” a trader said. “I think for the quotas there will be some increase in European prices.”
Platts assessed Northwest European HRC at Eur625/mt on July 3, down Eur4/mt on the day. Meanwhile, Platts assessed domestic HRC prices in South Europe at Eur625/mt ex-works Italy, down Eur5/mt on the day.
HRC prices in Europe stay flat on near-zero trades
Fastmarkets calculated its daily steel HRC index, domestic, exw Northern Europe, at €628.75 ($674.79) per tonne on Wednesday, stable day on day.
The index was down by €0.63 per tonne week on week and by €4.58 per tonne month on month.
“Nothing is happening in the market,” a buyer in Germany told Fastmarkets. “Some German federal states will be starting holidays [from July 8], so consumption is slow and any effects from the new safeguards are likely be delayed.”
Buyer sources estimated the tradable value for HRC at about €610-630 per tonne ex-works – although not all considered the lower end of the range to be workable.
Despite the lack of trades, buyers and sellers all agree that HRC prices have probably reached a bottom, but the usual September rebound is still open to question.
“There are no signs of a demand rebound, but mills are selling close to the cost line. sp there will probably be a price rise announced for September-delivery HRC,” a second buyer in Germany said.
In Southern Europe, Fastmarkets calculated its daily steel HRC index, domestic, exw Italy, at €621.04 per tonne on Wednesday, up by only €1.04 per tonne from €620.00 per tonne the day before.
The index was down by €3.96 per tonne week on week and by €8.34 per tonne month on month.
The Italian market was said to be almost totally quiet, with no trading of significance reported and one local integrated mill out of the market since last week.
The latest deals were heard done at €630 per tonne delivered – equivalent to €615-620 per tonne ex-works – in late June. For September deliveries, new offers have yet to be issued, but market participants expect to see attempts to raise prices, despite there being no room for an increase.
“A cost-driven price increase is always hard to push through,” a buyer in Italy told Fastmarkets.
The HRC import market in Europe was understandably quiet just a few days after the start of the new EU import quotas, sources told Fastmarkets.
The allocation for “other countries” HRC quotas have not yet been updated, but market participants said it was likely to be quickly exceeded, with an estimated duty rate around 10%.
Because of the 15% cap per country in the “other countries” quota initially available in each quarter, introduced for HRC from July 1, they added that they also expect Europe to see a reduction in import volumes of around 1.0-1.5 million tonnes under that category.
Vietnam, Japan, Taiwan and Egypt have previously been the principal suppliers of HRC to the EU under the “other countries” category, with Asian suppliers offering the most competitive prices, according to market participants in Europe. No new import offers were reported on Wednesday, however.
Published by: Julia Bolotova
ArcelorMittal Spain names new president
ArcelorMittal has named French Philippe Meyran as the new head of ArcelorMittal Spain, Kallanish learns from the company.
Meyran replaces José Manuel Arias, who leaves due to retirement after heading ArcelorMittal Spain for almost ten years. The newly elected executive is the first non-Spaniard in this position.
Meyran is the chief executive of the company’s Asturias steelworks. He started working at the company’s Spanish unit in 2009 in different positions, such as chief technology officer and chief operating officer.
The steelmaker operates 11 mills and has 14 distribution centres in Spain. The group’s Spanish crude steel production was 4.8 million tonnes in 2023, representing 41.7% of total national output.
Todor Kirkov Bulgaria
Nippon executive returns to US, continues acquisition negotiations
Nippon Steel is sending vice chairman Takahiro Miro back to the US as the Japanese steelmaker lobbies for support of its deal to acquire US Steel, Kallanish learns from a report by Reuters.
Miro’s itinerary is unavailable, but a source mentions that the Nippon executive will meet with various community officials and workers in states where US Steel operates.
The Nippon vice chairman has been acting as the company’s primary negotiator in the acquisition. His travels to the US in May and June failed to shore up any support from the United Steelworkers
(USW) union. Nor have political opponents of the deal publicly changed their positions. US President Joe Biden has said US Steel should remain American-owned (see Kallanish passim).
USW leadership has told union members that language in correspondence with Nippon is inconsistent and potentially harmful to workers and US national security (see Kallanish 1 July).
US Steel and its shareholders agreed to sell to Nippon Steel for roughly $15 billion after refusing a bid from domestic steelmaker Cleveland-Cliffs.
Kristen DiLandro USA
Thyssenkrupp Schulte appoints new chief executive
Effective 1 July, Astrid Meicherczyk has taken over as chief executive of thyssenkrupp Schulte, the German stockholding distribution subsidiary of thyssenkrupp Materials Services.
She succeeds Detlef Schotten, who has now assumed responsibility for the pan-European materials distribution and trading business of tk Materials Services.
Meicherczyk has extensive international general management and sales experience spanning over 25 years in leading industry positions. Most recently, she headed the European plastics distribution business of tk Materials Services. Before joining thyssenkrupp, the industrial engineer spent many years at Bertelsmann, in leading positions in Germany and abroad.
In April, thyssenkrupp Schulte announced a structural transformation of its business model, which involves the cutback of 450 jobs and the closure of locations. The company’s aim is to sustainably improve competitiveness and profitability, and meet changing customer needs by focusing on the material-related services business.
Christian Koehl Germany
Multiple origins exceed EU HRC safeguard quota cap
Egypt, Vietnam, Japan and Taiwan have each exceeded their 15% EU hot rolled coil safeguard quota cap for the third quarter, as expected, immediately after the opening of the new quota term. India has meanwhile exhausted over two thirds of its HRC quota.
Egypt, Vietnam, Japan and Taiwan have each had their allowance capped at 141,850 tonnes for Q3, after the European Commission introduced a hotly contested amendment to the Category 1 “other country” quota, alongside extending safeguard measures to mid-2026.
According to EU TARIC data, as of 2 July, Egypt has 176,626t awaiting allocation for customs clearance, while Vietnam has 208,880t, Japan 209,403t and Taiwan 228,520t. Tonnages exceeding the quota will need to pay duty to enter the EU market or be subject to costly storage until the following quota period.
Based on feedback from buyers interviewed by Kallanish, the average duty to be paid will amount to approximately 8%.
Indian HRC, meanwhile, has 209,807t awaiting allocation out of a total quota of 301,704t. Because Indian mills were largely out of the export market in the second quarter due to maintenance, the remaining quota may not get filled quickly.
South Korea, which almost exhausted its Q2 EU HRC quota, has only 1,386t awaiting allocation so far in Q3.
On Category 16 – wire rod, whose other country quota has also been capped at 15% per origin, in other words, at 18,413t, Algeria already has 27,702t awaiting allocation. Egypt has 7,858t awaiting allocation, South Korea 10,745t and Indonesia 14,965t.
Various speakers at Kallanish Europe Steel Markets 2024 in Milan last month lamented the lack of notice given by the European Commission that it plans to implement the 15% cap. The other country HRC quota had been exhausted within days for consecutive quotas, and several buyers had already ordered material from the impacted origins before the Commission notice was published in late May.
Adam Smith Poland