Spain’s automobile sector dips in June
Spain’s car industry saw its performance decline in June, Kallanish notes.
According to national automotive association Asociación Nacional de Fabricantes de Automóviles y Camiones (Anfac), output in June was 218,950 units, compared to 249,515 vehicles in May. This was also 7.1% less than the same month in 2023. Of the total, 75.4% was gasoline and diesel-powered automobiles. Six-month production amounted to 1.33 million units, just 1.1% more compared to January-June last year.
“Despite the decline observed in the last two months, the overall annual rate remains stable and above that of the previous year,” says Anfac general director José López-Tafall.
He however notes there has been a decline in electrical vehicle 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. The end of purchase subsidies in countries like Germany, one of our main export destinations, is causing a sharp drop in demand, which is affecting orders at our factories.”
Spanish vehicle exports fell in June. Shipments were at 186,813 units, compared to 221,354 units in the previous month and 9% lower than in June 2023.
European markets had a 93.5% share in Spanish deliveries in June, unchanged on-month and 2.3 percentage points higher on-year. Six-month exports slipped 0.5% over the same period in 2023 to 1.17 million vehicles, Anfac data show.
Todor Kirkov Bulgaria
Eurofer: Flats drive EU import growth, exports rise
Flat products, whose intake surged by 30% on-year, continued to drive EU steel imports in the first four months of 2024, says Eurofer. Longs intake fell 9%.
India maintained the leader position with a 15.8% share in EU finished steel imports, followed by Turkey with 12.6% and Vietnam with 10.3%, Kallanish notes.
While finished steel intake from China and Korea fell 38% and 11% respectively in January-April, imports from Turkey surged 85%, from India by 62% and from Vietnam by a whopping 155%.
Imports of all flats products rose, with the largest increases seen for hot-rolled wide strip, by 51%, hot-dipped galvanized coil by 44% and coated sheet by 41%. In the longs segment, only wire rod intake rose, by 19%.
EU finished steel exports meanwhile rose in the four months, with flats up 2% and longs 5%. The main destinations were the UK, US and Turkey. Finished steel shipments to United Arab Emirates ballooned 241%, with shipments to the US rising 21% and to China by 13%.
Exports of all flats rose – except for hot rolled wide strip – with quarto plate and cold rolled sheet seeing the largest growth. Longs shipments diverged, with rebar and heavy sections up 24% and 17% respectively, but merchant bar and wire rod declining.
Total EU steel trade deficit in the four months thus amounted to 1.4 million tonnes – it was 1.3mt in full-year 2023. Finished steel trade deficit was 775,000 t/month in the period, despite a slight surplus for longs.
The largest finished steel trade deficits were recorded with India (298,000 t/m), South Korea (218,000 t/m) and Taiwan (193,000 t/m). Surpluses were registered with the US (191,000 t/m), the UK (104,000 t/m) and Switzerland (76,000 t/m).
Adam Smith Poland
Kloeckner Metals focuses on value-add to fend off steel price volatility
Fastmarkets’ calculation of its steel hot-rolled coil index, fob mill US Midwest plunged from $55 per hundredweight ($1,100 per short ton) in January 2024 to about $32 per cwt in mid-July.
Kloeckner, one of the biggest service centers in North America with 55 branches, made the biggest of those four acquisitions in August 2023 with the purchase of Nuevo Leon-based National Material of Mexico for $340 million.
The company also acquired Sol Components and Industrial Manufacturing Services in October and November 2023 respectively, and announced the purchase of Amerinox’s assets in Camden, New Jersey in July 2024.
Entering automotive business
The Mexican investment included Kloeckner entering the automotive business and higher value-added electrical steel-related products and services. Mexican-made electrical steel-related products serve markets within Mexico, the US and Canada.
“The move into automotive is an example of expanding the core [business], giving us capabilities to get into markets that we haven’t been in,” Ganem said.
Speaking about Kloeckner’s other recent purchase, Ganem said the Industrial Manufacturing Services purchase allowed the company to reach “the highest level” of value creation possible for a service center.
“We are actually providing a finished part to an [original equipment manufacturer]… Those parts are formed, welded and even painted in many cases” he said.
“And those types of businesses, not everybody can do — they generate a much higher return. The value that we are creating in the process is not as susceptible to price volatility” because the price of steel makes a much smaller component, he said.
Ganem said that in recent years “we’ve seen record levels of volatility, and I think the strategy has allowed Kloeckner Metals, certainly in North America, to be able to navigate those cycles much better than we had in the past.”
With the purchase of Sol Components, a maker of solar energy equipment, ”it’s more of the same,” he said.
“That plays right into our higher-value-add strategy, because many of the parts and components that go into a solar structure are fabricated parts,” Ganem said.
The CEO also noted “much higher prices and margins” in relation to the purchase of Amerinox, due to processing stainless steel and aluminum.
“Any increase in the mix of stainless and aluminum that we can sell is also well aligned with our higher-value-added strategy,” Ganem said. Amerinox also brings advanced capabilities like polishing to Kloeckner, he added.
Possible acquisitions
Kloeckner, which generated $4.5 billion in revenue in 2023, will target assets for acquisition that could result in synergies and further expand the company’s added value strategy, Ganem said.
“We look at the opportunities that arise,” Ganem said. “They can be opportunistic. We don’t have to do anything. We are really in good position today, but we are here to grow, especially when it comes to the higher-value-added part of our business.”
Recent acquisitions by other service centers point to a trend of consolidation in the steel processing industry.
Companies like Reliance, Ryerson and Olympic Steel are among those that have made acquisitions within the past couple of years.
Based on the number of existing service centers, there appears to be more room for industry consolidation: The Metals Service Center Institute, which groups service centers, mills and affiliates, has over 2,300 members, many of them in the US Midwest and Northeast.
Feralpi’s new rebar mill in Germany will work with zero direct emissions
The unit was expected to address the need for long steel materials produced with reduced carbon emissions.
“For the first time in Germany, [rebar] in coils weighing as much as 8 tonnes will be produced for the construction industry, using an innovative, fully electric process with zero direct [carbon] emissions,” Feralpi said.
The construction of the new rolling mill is part of the company’s 2021-26 industrial development plan, which was intended to reduce its environmental effects through electrification.
According to Fastmarkets’ information, the new facility will have capacity for about 500,000 tonnes per year of rebar.
The company added that the technical investment related to its industrial development plan reached €169 million ($183.3 million) in 2023.
As well as the new rolling mill, the funds were invested in a new scrapyard in Germany, and technical improvements to existing facilities in Italy.
According to Feralpi Group, the investments helped the company to address the “need to offer low-emissions steel for both the infrastructure and mechanical engineering industries.”
Currently, the demand for carbon-reduced and green steel was stronger in flat steel products such as hot-rolled coil, trade sources told Fastmarkets. Such products are more expensive due to the premiums charged by producers, with the automotive industry being the main consumer.
Fastmarkets’ weekly assessment of the green steel domestic, flat-rolled, differential to HRC index, exw Northern Europe, was €170-250 ($184-271) per tonne on July 25, stable week on week.
And the assessment of the flat steel reduced carbon emissions differential, exw Northern Europe, was €40-60 per tonne on July 25, unchanged since May 30.
Regarding carbon-reduced and green long steel products, the practice of charging premiums was not widespread, trade sources told Fastmarkets. The construction sector was usually the main consumer of long steel products such as rebar and wire rod, but many companies in this field were not ready to pay additional costs.
Premiums have been charged sporadically for particular investment projects that required carbon-reduced and green steel products.
“We still need to educate the market about the advantages of green long steel products,” a producer source said.
Ambitious green goals
Feralpi Group planned to decrease its emissions of CO2 and other climate-affecting gases by 50% by 2030, the company said, adding that this referred to the Scope 1, 2 and 3 emissions related to its hot-drawn products. This goal has already been approved by the International Science-Based Targets Initiative SPTi.
In 2023, Feralpi Group reduced its Scope 1 and Scope 2 emissions by 24% year on year, the financial report said.
Challenging environment for steel products
In 2023, Feralpi Group produced 2.42 million tonnes of steel, down by 1.06% from the previous year.
But revenue dropped to €1.73 billion, compared with €2.40 billion in 2022. The decrease in revenue resulted in a significant reduction in earnings before interest, taxes, depreciation and amortization (EBITDA), which fell to €83.2 million compared with €501.7 million in 2022.
Feralpi noted that several factors weighed on the reduced steel demand, including the shift in consumption from goods to services, the weakening of European industry, and the more difficult conditions for investments.