Italian longs prices flatten in quiet market
Italian merchant bar prices remain stable on-week. Sales have nevertheless failed to pick up in July after a lack of demand in the first half of the year, Kallanish notes.
Based on reports from various buyers and sellers, it appears the consumption crisis in Europe has become a long-term structural issue. The current range for domestic merchant bar is at €280-320/tonne ($302-346) delivered. Deals achieving the peak of the range has been a rare occurrence lately, happening in recent days only for one truckload.
Material from other EU countries is priced at approximately €20/t less. Prices are currently fluctuating at around €700-740/t, including size extras.
Sales volumes for products derived from wire rod have however shown consistent strength, both in July and throughout the first seven months of the year. Two agents selling various long products claim they were able to achieve satisfactory sales volumes due to the high-added-value products derived from wire rod. A distributor mentions that apart from merchant bar, he experienced average sales, thanks to better demand for other longs like beams.
Sections producers, including ArcelorMittal, have decided to raise prices by €20/t for July contracts (see Kallanish 24 July). Beams supply is extremely limited in Italy and demand is stronger compared to other long products. According to sources, prices for the first category are at around €770-790/t delivered, which includes a €20/t increase. Some sellers agree this price is effective, but it needs to be consolidated.
Natalia Capra France
Eurofer lowers EU demand forecast amid ‘worsening’ uncertainties
Eurofer has revised down its EU apparent steel consumption forecast for 2024 to 1.4% growth – from 3.2% – amid a steeper-than-expected downward trend. Steel-using sector output is now seen declining 1.6% – versus 1% – while imports’ share in EU steel consumption remains at a historically high 27%, Kallanish notes.
This comes after first-quarter apparent consumption slumped 3.1% on-year to 31.9 million tonnes. Although moderate quarterly improvements are expected throughout 2024, volumes will remain below pre-pandemic levels, with the overall evolution of steel demand remaining highly uncertain, Eurofer observes.
Domestic deliveries contracted 5.8% in Q1, after a moderate, 1.3% increase in the preceding quarter. Imports continued increasing, growing 12% in Q1.
Despite proving resilient in 2023, EU steel demand is suffering from “a worsening combination of uncertainties”, including high energy prices, persistent inflation, economic uncertainty and geopolitical tensions, Eurofer notes. These are exacerbated by a manufacturing crisis affecting the largest steel-using sectors.
Steel-using sector output fell 1.9% in Q1 as a result of a continued downturn in the construction, mechanical engineering, domestic appliances and metalware sectors. Following a strong 2023, automotive output also entered negative territory, a trend expected to continue throughout 2024, with Eurofer revising down the sector’s 2024 forecast to 3% contraction versus the previous 0.4% contraction forecast.
The overall steel-using sector output growth forecast for 2024 was revised down from the previous 1% contraction due to the second consecutive year of recession forecasted for the construction sector, persistent geopolitical tensions, and the lagged impact of high interest rates on manufacturing.
“The situation requires urgent action at EU level, as both European steel production and related clean tech value chains are at risk,” says Eurofer director general Axel Eggert. The association looks forward to the European Commission delivering a European Clean Industry Deal with a Steel Pact at its core, he adds.
Adam Smith Poland
Liberty Galati restarts BF amid plate, coated demand
Liberty Galati will restart its blast furnace No.5 in the coming days, on the back of healthy demand for plate and coated products, the firm says.
Galati temporarily idled its hot end in May to “ensure a profitable and sustainable production”, with rolling continuing using slab from stock. Liberty’s Dunaújváros plant in Hungary had been supplying coke feedstock to Galati but began the process of closing its two coke oven batteries in June.
The restart comes after Liberty Group executive chairman Sanjeev Gupta met with Romanian Deputy Prime Minister Marian Neacsu in Bucharest this week. The meeting covered Galati’s imminent restart plans to serve local customers in infrastructure and shipbuilding, and Liberty’s plans for investment in green steel in Romania.
The company requested government support related to CO2 certificate allocation and the existing incentives for energy intensive consumers. The Romanian government will work with the company to identify solutions to support the restart of the blast furnace, Liberty notes.
“With the business now in a more stable position, the restart of blast furnace No.5 will help to exploit the advantages the business has in supply of plate and coated products to our customers that includes critical infrastructure projects in Romania and across Europe,” Liberty says. Galati is a “standalone ringfenced business, unaffected by the issues faced by its sister plant in Ostrava,” it adds.
The Ostrava regional court commenced insolvency proceedings against Liberty Ostrava on 13 June, while Liberty initiated the sales process for the steelworks and filed for a judicial reorganisation of the Czech plant (see Kallanish passim). It is unclear if the Ostrava works will find a buyer given the weak steel demand and investment climate in Europe.
Adam Smith Poland
Stahl Gerlafingen cuts output in summer
Swiss steelmaker Stahl Gerlafingen has announced short-time working for August and has filed for state subsidies, which will support some of the wages for the lost working time.
In spring, already announced that it will discontinue the production of merchant bar and sections. Together, they accounted for one third of overall approximate annual output of 700,000 tonnes. The company is since confined to making rebar.
In a statement sent to Kallanish, it details that standstills will occur in the coiling shop from 1 to 13 August, in the meltshop from 9 to 21 August, and in the finishing line from 5 to 19 August. Subsidies for short working have been approved by the regional state government, it notes.
While it is not clearly stated in the press statement, the standstills come in addition to the current summer maintenance break, writes local daily Solothurner Zeitung.
The company notes that “order intake has not developed according to expectations.” However, it is banking on a recovery in the market situation over the course of the second half year.
Christian Koehl Germany