European HRC prices reach breakeven point; sentiment remains negative
The index was down by €7.88 per tonne week on week and by €26.50 per tonne month on month.
Mills in Northern Europe were heard offering material with October/early November delivery at €630-640 per tonne ex-works. Lead times were reported to be around six weeks.
These price levels, however, were too high, buyers said.
Fastmarkets’ sources estimated the workable market level at €580-600 per tonne ex-works.
“The market is so weak. No one is ordering big volumes. There is no restocking,” a seller source told Fastmarkets.
They added that the prices have reached their breakeven point; producers are not currently making a profit.
Strong competition for new orders among mills and steel service centers in Northern Europe has put downward pressure on prices for hot-rolled coil.
At the same time, buyers in the region continued to refrain from trading. Demand from the main steel-consuming sectors remains soft, with the summer slowdown also contributing to the slow trading.
In Southern Europe, Fastmarkets calculated its corresponding daily steel hot-rolled coil index, domestic, exw Italy at €600.00 per tonne on Thursday, unchanged from the previous day.
The index was down by €12.50 per tonne week on week and by €21.67 per tonne month on month.
Most market participants in Italy were still taking summer holidays, with trading in the region close to zero.
The sole Italian integrated mill producing HRC is expected to return to the market next week and offer fresh price levels.
The most recent offers were heard at the end of July at €640-650 per tonne delivered, which would net back to €630-640 per tonne ex-works.
Buyer sources estimated the workable price at €590-610 per tonne ex-works.
In terms of imports, no fresh offers were heard in the market.
thyssenkrupp Materials expands Stuttgart site
thyssenkrupp Materials Processing is expanding its capacities and investing a low double-digit million-euro amount at its site in Stuttgart, Germany, Kallanish hears from the distribution division of thyssenkrupp AG.
The company plans to install two new processing lines, and to build a new 2,000 square metre warehouse. The aim is to increase production, packaging and storage capacities and to optimise them digitally. Construction work and preparations for the installation of the new slitting and packaging systems has already begun this month.
The slitting line is expected to be operational by September 2025. Supplied by Tilgert, it will increase the total capacity to 350,000 tonnes/year and provide a comprehensive processing portfolio in thicknesses from 0.2 to 5.0mm. In addition to conventional rolled steel, it can also process electrical steel strip.
In order to match the expanded production capacities, a new high-performance packaging line will be installed in spring 2025. Supplied by Italian company Promec, it will feature a high degree of automation and the ability to process heavy finished materials,
In addition to the implementation of new machines, the digital networking of the site will be an important part of the investment, tk Materials notes. With a fully automated digital setup and production process monitoring, the company expects to speed up and better coordinate individual production steps. To this end, its subsidiary thyssenkrupp Materials IoT has set up a central digital infrastructure that coordinates all process steps from the supply chain to the plant.
Christian Koehl Germany
UK port operator warns of green infrastructure delays
Major UK ports operator Peel Ports Group says that green infrastructure projects at its sites are being delayed due to complicated regulations and underfunded authorities. This is impacting projects at ports which handle much of the UK’s steel trade, as well as projects by important steel-consuming companies, Kallanish understands.
“You’ve got regulators that are not well resourced enough. You’ve got legislation that’s been brought in that’s measuring everything to within a gnat’s whisker of nothing,” Peel Ports chief executive Claudio Veritiero told the Financial Times in an interview.
Projects are therefore taking much longer to approve and regulatory processes are becoming far more complicated. At the same time, regulators do not have the resources to review projects in a timely manner.
The electrical grid is at the heart of the problems. Carmaker Stellantis, which owns Vauxhall, aims to fully electrify the logistics hub in Liverpool, operated by Peel Ports, but has yet to complete its grid connections. The project is the UK’s largest roof-mounted solar operation.
This project, being developed with German energy firm Eon, could take another four years to complete because of constrained grid capacity and a lack of available connections.
Peel Ports ships around 70 million tonnes/year of cargo through its UK ports.
UK HRC prices stable amid weak demand, excessive supply
Domestic UK hot-rolled coil prices were stable in the week to Aug. 22, amid weak demand and excessive supply.
“It is the worst time since 2018,” a trader source said. “Other buyers expect prices to decrease.”
Trade sources said the price gap between Asian imports and European imports is widening, making Asian material appealing for customers, despite the longer lead times and freight involved.
“The gap between EU material and Asian material is opening up.” trader source said. “We can still buy from the far East.”
However, low end-user demand and limited restocking in the domestic market is forcing market participants to buy closer.
“If I were a service center, I would buy more locally,” a trader source said.
Trade sources expect current market dynamics to continue until the first quarter of 2025, with buyers restocking as per requirements and avoiding the buildup of inventory. With demand stagnating at low levels, prices could see further downward movement, trade sources said.
“We are still seeing some spot inquiries,” a trader source said. “I still think there is a period of activity there.”
Platts assessed UK HRC at GBP570/mt basis DDP West Midlands, stable on the week.
Devbrat Saha
Global steel production falls 4.7% on year in July
Global crude steel production totaled 152.8 million metric tons in July, down 4.7% year on year and 4.9% lower on the month, according to World Steel Association data published Aug. 22.
This brought total production for January-July to 1.1 billion metric tons, down 0.7% year on year, the data showed.
The largest producer China produced 82.9 MMt in July, down 9% year on year and 9.5% lower than June and making up 54.3% of the total volume. This brought the seven-month volume to 613.7 MMt, down 2.2% on the year.
The second largest steel producer, India, produced 12.3 MMt in July, up 6.8% year on year and 2.7% higher month on month, with January-July volume rising 7.2% on the year to 86.4 MMt.
Japan produced 7.1 MMt in July, down 3.8% year on year and 1.1% higher than June, with the seven-month total at 49.8 MMt, falling 2.8% year on year.
The US produced 6.9 MMt of crude steel in July, up 2.1% on the year and 4.7% higher on the month, while Russia was estimated to have produced 6.3 MMt, down 3.1% on the year, but climbing 3.35% from June.
In January-July, the US produced 46.9 MMt and Russia 43.1 MMt, down 1.8% and 3% year on year respectively.
South Korea produced 5.5 MMt in July, down 3.4% on the year, but up 7% on the month, taking the year-to-date total to 37.1 MMt, down 5.9% on the year.
Turkey produced 3.1 MMt, up 4% on the year, but edging 0.5% down month on month, with the seven-month volume up 14.9% at 21.7 MMt.
In July, Brazil produced 3.1 MMt, climbing 11.6% year on year and up 7.6% on the month, while Iran produced 1.8 MMt, falling 18.7% on the year and 32.3% lower than June.
Europe steel output up 5.7% on year
The European Union produced 10.8 MMt in July, up 5.7% on the year, but down 2.5% from June, with the January-July total up 1.5% on the year at 78 MMt.
The region’s largest steelmaker, Germany, saw July production at 3.1 MMt, which worldsteel said was up 4.8% year on year, but down 2.7% month on month, bringing the seven-month volume to 22.5 MMt, up 4.5% on the year.
This was corroborated by data from the German Steel Federation, which also reported crude steel output at 3.1 MMt in July, although it said this was up 6.3% year on year.
Of the total, 2.3 MMt was from blast furnaces, up 4% on the year, and 789,000 metric tons from electric arc furnaces, according to WV Stahl.
Its January-July volume was the same as worldsteel’s, with 15.8 MMt produced via BFs and 6.7 MMt via EAFs.
Germany’s production of hot rolled coils rose 2.5% on the year in July to 2.6 MMt, with the seven-month volume up 2.9% to 19.3 MMt, WV Stahl said.
“The slight upward movement in production in recent months, which is taking place from a low level, is anything but a reason to sound the all-clear. Rather, 2024 will also be a lost year for steel volumes,” German Steel Industry Association Managing Director and Chief Economist Martin Theuringer said in an Aug. 22 statement accompanying the German data.
“This is because concerns about a recession have increased across the economy. Many important steel processing industries and thus also steel demand are still in reverse gear,” he said, adding that import pressure continues to rise across Europe and any hopes for an economic recovery had been postponed to 2025.
Platts, part of S&P Global Commodity Insights, assessed domestic HRC prices in Northern Europe at Eur595/mt ex-works Ruhr Aug. 21, down 13.8% since the start of 2024.
Crude steel data covers the 71 countries that report to worldsteel, accounting for about 85% of the world’s crude steel production.
Meanwhile, global production of pig iron from 37 countries was 106.6 MMt in July, down 5.5% year on year, with the January-July total down 2.5% on the year to 752.3 MMt, the data showed.
Direct reduced iron produced in 13 countries was 10.6 MMt in July, up 2.4% year on year, with the seven-month total at 72.4 MMt, up 6.5% year on year, according to worldsteel.
Jacqueline Holman