Residential construction remains gloomy in Germany
With 17,600 apartments under construction and conversion in June, activity in Germany’s residential construction was 19% lower than in June 2023, according to industry association Hauptverband der Deutschen Bauindustrie.
This confirms a downward trend seen all through the first half year, with a year-on-year decline of 21%. The managing director of Bauindustrie, Oliver Müller, says there is no hope of a recovery in sight.
“The first half of the year was another major disappointment in terms of housing. We are heading for the weakest level of approvals since 2010,” he states.
For builders and benders, this means that the struggle for orders remains tough, and could become tougher. Benders are operating unprofitably because the competition is even worse for their customers, the construction companies.
“We often have five to ten benders competing for an order; but one level up, it is even more builders wooing to get a project,” Kallanish hears from a bender’s manager.
Hence, construction firms pass the pressure along to partners and try to compensate some of their concessions in award speculation by pushing down the price for rebar services.
“Many just need a deal to keep operating. We are between the devil and the deep blue sea,” the manager states.
Christian Koehl Germany
Germany sees hopes for recovery postponed into 2025
German mills in July produced around 3.1 million tonnes of steel, 6.3% more than in July 2023, Kallanish learns from national steel federation WV Stahl.
July thus continued the slight upward trend seen in the first half of the year, with year-on-year tonnage increases in most months, the federation notes. In the period from January through July, production totalled 22.5m tonnes, up 4.7% y-o-y. However, the federation warns of early optimism, in view of an altogether subdued long-term level.
“The surge of the preceding months from a low level gives no reason for a relief,” says WV Stahl managing director Martin Theuringer. “On the contrary, 2024 will be a lost year for the recovery of volume production. The worries about an economic recession have grown, and demand is still declining. This, plus further increasing pressure from imports are postponing hopes for a recovery of business completely into 2025.”
Due to a relief from the peak of power prices seen in 2023, the electric arc furnace route saw a stronger relative y-o-y surge in the first seven months of 13.8%, to 6.7mt.
Christian Koehl Germany
German rebar pricing fluctuates minimally
The German rebar market is the subject of mixed commentary over whether mill pricing is higher, lower or about the same versus prior weeks, Kallanish hears.
A southern German distributor has recently paid slightly more for an order than last time, dating back to late May, according to a manager of the company. The slight premium was within €10-20/tonne ($11-22), he details. Another observer based on the Ruhr concurs, as he heard of offers up to €650/t delivered ($726), which without the fixed size extra of €265 would mean a base price of €385/t.
A Lower Saxony manager dismisses such new peaks. In fact, he says that his latest deal for wire mesh was €5/t below the previous one at the beginning of summer. Overall, prices have hardly budged over the summer, he finds, hovering at €620/t delivered, or somewhat above.
That source reports that the distribution arm of the mill in question is nearly fully booked and close to rejecting new orders. A price discount under this scenario would be somewhat of a paradox, the manager concedes. “These are crazy times,” he states.
Such examples suggest that there is no reason to see a wide price movement across mills, be it up or down. Deviations from the average price this summer are influenced by the buyer’s circumstance and where it came from. The southern distributor may have had lower-priced alternatives from Italy in May/June and so could bargain for relatively good deals from German mills. This is not the case anymore, as “offers from Italy appear somewhat higher than from German mills,” he says.
Another distributor in a letter to customers flatly states that “it is unlikely that August will bring a change in prices.”
Christian Koehl Germany
European HRC prices end week on a steady note
Domestic prices for European hot-rolled coil were assessed flat on Aug. 23 as the market ended on a quiet note, with no sign of recovery for the next few weeks, market sources said.
“There is not that much movement in the market,” one distributor source said.
“Domestic markets are so weak,” a second distributor source said.
Market participants noted that although overall market sentiment remains flat if not slightly negative, there are some market participants, particularly mills, who believe that there may be some price recovery in the market, pushing levels up.
“[Some mills] thinks prices in October will go up by 50 euros or more,” a service center source said.
Market sources reiterated that for any chance of price recovery, mills must persist in reducing production and lowering capacities. This approach will create space for potential inquiries later in the year that could drive prices up.
“I really think production cuts are necessary,” the service center source said. “Even if there are fewer imports, the demand is still weak.”
Platts assessed Northwest European HRC stable on the day at Eur595/mt ex-works Ruhr Aug. 23.
Tradable values were reported at Eur590-610/mt ex-works Ruhr and offers were reported at Eur600-620/mt ex-works Ruhr.
Meanwhile, Platts assessed domestic HRC prices in Southern Europe at Eur595/mt ex-works Italy Aug. 23, stable on the day.
European HRC market remains quiet; expectations mixed
Demand remained low, with most market participants expecting that trading would pick up in September.
Mills in Northern Europe were heard offering HRC at €620 ($690) per tonne ex-works, Fastmarkets understands. However, producers were inclined to decrease the price of firm bids.
Some deals were heard at €580-590 per tonne ex-works.
Industry sources estimated the tradeable market level at €590-620 per tonne ex-works.
Fastmarkets calculated its daily steel hot-rolled coil index, domestic, exw Northern Europe at €601.83 per tonne on Friday, down insignificantly by €0.67 per tonne from €602.50 the previous day.
The index was down by €8.67 per tonne week on week and by €26.42 per tonne month on month.
“The prices have plateaued. Hopefully, the market activity will peak in the next few weeks, and some price rebound could be observed,” an industry source told Fastmarkets.
However, according to a distributor source, production cuts should be made to balance the market.
“Even if there are less imports, demand [in Europe] remains weak,” the source said.
Despite that, there were rumors that mills are planning to increase HRC prices for October by €30-50 per tonne.
In Southern Europe, Fastmarkets calculated its corresponding daily steel hot-rolled coil index, domestic, exw Italy at €600.00 per tonne on Friday, unchanged from the previous day.
The index was down by €7.50 per tonne week on week and by €21.25 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, Turkish HRC was heard offered to Italy at €570-580 per tonne CFR, including the anti-dumping duty.
Published by: Darina Kahramanova
Canada to implement 25% surtax on Chinese steel, aluminum; 100% on EVs
Canada intends to apply a 25% surtax on imports of steel and aluminum from China and a 100% surtax on all Chinese-made electric vehicles in October in an effort to protect its domestic industries from alleged unfair trade practices, the government said Aug. 26.
The surtax on EVs is to take effect Oct. 1, while the 25% surtax on Chinese steel and aluminum will be effective Oct. 15, the government’s Department of Finance said in a statement.
“Canadian workers and critical sectors, including steel and aluminum…are facing an intentional, state-directed policy of overcapacity, undermining Canada’s ability to compete in domestic and global markets,” Deputy Prime Minister and Minister of Finance Chrystia Freeland said. “This is why our government is moving forward with decisive action to level the playing field, protect Canadian workers, and match measures taken by key trading partners.”
Steel and aluminum
The government released an initial list of steel and aluminum products for public comment Aug. 26. A final list of goods subject to the surtaxes will be announced by Oct. 1, it said.
The surtaxes will not apply to Chinese goods that are in transit to Canada on the day on which these surtaxes come into force, the government said.
EVs
The 100% surtax on EVs includes electric and certain hybrid passenger automobiles, trucks, buses, and delivery vans and will apply in addition to the “Most-Favoured Nation import tariff” of 6.1% that currently applies to EVs produced in China and imported into Canada, the government said.
Additionally, Canada’s government is launching a second 30-day consultation concerning other sectors “critical to Canada’s future prosperity,” including batteries and battery parts, semiconductors, solar products, and critical minerals.
It also intends to limit eligibility for the Incentives for Zero-Emission Vehicles (iZEV), the Incentives for Medium and Heavy Duty Zero Emission Vehicles (iMHZEV), and the Zero Emission Vehicle Infrastructure Program (ZEVIP) to products made in countries which have negotiated free trade agreements with Canada.
Canada’s government said it intends to review these measures within a period of one year from their entry into force and the actions may be extended for a further period of time and supplemented by additional measures, as appropriate.
Author: Justine Coyne
