German rebar benders face diminishing profitability
Distributors and benders of rebar in Germany have had reason to complain about deteriorating prices throughout the whole year, especially on the selling end to builders.
A manager at one renowned bender group has now pointed out to Kallanish that many companies of its kind could also see their financial cushion diminish in the remainder of the year. “There is an essential difference in that the older jobs that generated some profit are now completed,” he explains. “Now, we will be handling orders from the second half of 2023,” when sales prices sunk to the level of rebar intake prices, and in some cases undercut them.
His group informed customers during the summer that it would not be able to work with sales prices of less than €700/tonne ($775). It asked customers “not to perceive this letter as a sign of weakness, but as a proof of trying to work as partners on the same footing.”
This calculation would apply a rebar intake price from mills of around €620/t delivered, where prices landed in May/June. Overall, values have hardly budged since.
According to benders, the price deterioration downstream is harder. Another manager, who has not read the former group’s letter, but agrees with its content and message, says: “I myself went down in an offer as far as €640 on the sale side – and I did not get the award. Someone else was cheaper.”
On the brighter side, the former group’s manager notes that some types of jobs are increasingly available, even if not profitable. According to him, job offers from big projects are coming in. But this is good news only for big benders that handle volumes of 3,000 tonnes and more. “And still, these jobs are not profitable either,” he bemoans.
Christian Koehl Germany
ArcelorMittal completes first phase of Differdange decarbonisation project
ArcelorMittal is implementing the decarbonisation project initial phase at its Luxembourg long products facility in Differdange.
It has successfully relocated the black slag pits from their previous position on the outskirts of the site, which was in close proximity to the neighbourhood. A previously unused hall has been transformed into a space to receive the liquid slag in close proximity to the electric arc furnace.
Modifications were made to the facility without interrupting production. This included expanding the storage space and pits inside the hall, as well as installing cladding to insulate the building from the outside. The steelmaker states in a note obtained by Kallanish that placing the slag pits in a covered hall has the advantage of reducing the main nuisances caused by the pouring of slag. The Luxembourg state provided up to 30% of the funding for the pit relocation.
In the second phase, Differdange will install a former converter secondary dedusting system from the ArcelorMittal Florange plant by the end of the year. The new dedusting unit will be connected to local canopy hoods for the rolling mill and steel plant by the end of 2025.
ArcelorMittal is investing in decarbonisation, product quality and increasing capacity at its Luxembourg long products facilities in Differdange and Belval. The company aims to commission new and revamped equipment at both plants between 2024 and 2026. The investment will improve environmental footprint, relocate by-products management areas within the plants, reduce overall emissions, and increase output at Belval.
The company is also launching the “Steelup” project at Belval that involves a new digitised “no man on the floor” EAF with increased safety, a 15% energy consumption reduction, and 15% heavy sections productivity hike. The project includes a new vacuum degassing system to reduce dissolved gas and a continuous casting transformation system for new high-carbon steel grades and heavier beam blanks.
The modernisation will help to reach a certified low carbon footprint for steel of below 300kg per tonne, cutting CO2 by 200,000 t/year. The Belval site will obtain the XCarb label for rails produced from mill A.
The new Belval EAF costs about €67 million ($74.2m), including €15m from state subsidies. The Differdange revamp will cost around €18m, including €5m from the local government.
ArcelorMittal Luxembourg produced 1.9 million tonnes of crude steel in 2022 and employs 3,368 workers. The new Belval EAF will increase ArcelorMittal Luxembourg production to 2.5 million t/y of steel.
Natalia Capra France
Trading limited in European HRC market; outlook unclear
The HRC market across Europe has been slowly restarting after the traditional summer break, with only a few trades reported in the week starting Monday August 26.
“It’s still very quiet. Buyers are coming back, but nobody is hungry for [HRC] tonnages,” a mill source in Northern Europe said.
Offer prices from suppliers in Germany were heard around €590-600 ($655-666) per tonne ex-works for HRC with lead times around six weeks.
Sources, however, noted that suppliers were willing to provide discounts for bigger tonnages.
In the Benelux area, one mill was heard selling HRC at €570 per tonne ex-works. Another supplier in the region was trying to not go below €600 per tonne ex-works.
Some mills’ bullish intentions from end-July-early August, have vanished due to a lack of real demand.
“Some suppliers were aiming for a price increase for October delivery HRC, but de-facto, prices are sliding,” a buyer source said.
As a result, Fastmarkets calculated its daily steel hot-rolled coil index, domestic, exw Northern Europe at €591.25 per tonne on Friday, down by €1.25 per tonne from €592.50 per tonne the previous day.
The Northern Europe index was down by €10.58 per tonne week on week and by €33.75 per tonne month on month.
Sources have different opinions regarding price trend for September. Some buyers suggested there was still room for a decrease considering oversupply and limited real demand.
Other buyer sources and most mill sources claimed that HRC prices have hit rock bottom and restocking in September should aid price stabilization.
“It looks like there will be a fight for “emergency” [HRC] tonnages among mills, to fill gaps in order books. As soon as they [mills] fill order books enough, they’ll try to increase [HRC] prices,” a second buyer source said.
Fastmarkets’ daily steel hot-rolled coil index, domestic, exw Italy was calculated at €591.25 per tonne on Friday, down by €3.75 per tonne from €595.00 per tonne the previous day.
The index was down by €8.75 per tonne week on week and by €30.00 per tonne month on month.
Italian market was also quiet.
“We just came back from holidays, and it’s still not clear how the market will restart in September,” a buyer source in Italy said.
Italian buyer were estimating tradeable values for large volumes of HRC no higher than €590 per tonne CPT (€580 per tonne ex-works) and at €600 per tonne CPT (€590 per tonne ex-works) for smaller tonnages.
An offer from one domestic supplier was reported at €610-620 per tonne CPT (€600-610 per tonne ex-works).
In the week to Friday, import offers remained scarce.
HRC from South Korea was on offer to Italy at €590 per tonne CFR.
From Turkey, offers were heard at €560-570 per tonne CFR, including the anti-dumping duty.
From India, offers were heard at $620 per tonne CFR.
Most suppliers were already offering late-October shipment.
Also, sources said that China-origin coil is being offered to Italy at €540-550 per tonne CFR, including duties.
Published by: Julia Bolotova
Germany ups rebar, rod exports to neighbors to compensate for weak domestic construction sector
Germany’s entire exports of these products, which are mainly used in the construction sector, grew to 1,084,110 tonnes in 2023 from 992,584 the previous year, according to the latest data from Global Trade Tracker.
And the trend has continued in 2024, with exports of rebar and rod from Germany reaching 666,286 tonnes by the end of June.
Exports to six of Germany’s nine near neighbors – Poland, the Czech Republic, Switzerland, France, Belgium, and Denmark – increased year on year in 2023, according to Global Trade Tracker data, while shipments to Austria, Luxemburg and the Netherlands all declined.
While market participants said that increasing its rebar and rod exports to neighboring countries had helped Germany compensate for the weak performance of its domestic market, all construction sectors across Central and Northern Europe have faced difficulties. But some are developing better than Germany, Fastmarkets understands.
“High interest rates are limiting investment, so construction activity – particularly in the private sector – is not booming to say the least,” a German trader said.
Exports of German steel rebar and rod grew most significantly to the Polish market, reaching 298,903 tonnes in 2023, up by 125,569 tonnes from 173,334 tonnes in 2022, according to Global Trade Tracker.
And German rebar and rod exports to Switzerland reached 170,244 tonnes in 2023, up by 44,011 tonnes from 126,233 tonnes in 2022.
The exported volumes to Belgium almost doubled on an annual basis in 2023, reaching 38,500 tonnes, up by 18,591 tonnes from 19,909 tonnes the previous year.
In 2023, German exports of rebar and rod to the Czech Republic pushed up by 12,284 tonnes to 46,435 tonnes and shipments to France grew by 8,075 tonnes to 95,772 tonnes, with a slight increase in exports to Denmark.
Fastmarkets’ data, meanwhile, confirms that reduced volumes of German rebar and rod ended up in Austria in 2023, which had previously been a major export destination – shipments to Austria from Germany amounted to 149,641 tonnes in 2023, down by 93,153 tonnes from 242,794 tonnes in 2022.
Smaller declines of these steel products were also registered in the Netherlands and Luxembourg, while Germany’s exports of rebar and rod to Hungary also fell significantly. According to Global Trade Tracker data, Germany exported only 2,395 tonnes of rebar and rod to Hungary in 2023, down by 14,795 tonnes from 17,190 tonnes in 2022.
Germany’s construction sector
Germany’s index for production in construction fell to 91.5 in June 2024, down by 4.49% from 95.8 in June 2023, which was itself a 5.16% decline on the June 2021 figure of 101.0, according to the latest data from the European Commission’s Eurostat directorate on August 20.
Eurostat is currently taking 2021 as a reference year, which equals 100 points in the index. This was the year just before Russia’s attempted full-scale invasion of Ukraine, when construction activity in Europe was still relatively strong.
Overall sentiment in Germany’s construction sector remains negative, according to data from Fastmarkets analysts, with the decline in Germany’s index for production in construction directly coinciding with Russia’s attempted invasion of Ukraine in February 2022 and the subsequent war.
But despite similar declines in Germany’s neighboring markets, their index levels have remained slightly above 2021 levels, which suggests the construction sectors in those markets were developing a bit faster than Germany’s prior to the invasion, with Poland and Belgium good examples of EU countries outperforming Germany, according to Eurostat data.
In Poland, the index for production in construction fell to 103.7 in June 2024, down by 6.32% compared with 110.7 in June 2023. However, it was still above the level from June 2021, which stood at 102.1.
And in Belgium, the June 2024 index dropped to 99.7, down by 2.16% from 101.9 in June 2023. But, again, the index in Belgium was still higher than in Germany in June 2022, at 100.6 and in June 2021, at 100.0.
While overall expectations for 2024-2025 remain negative across all EU-27 construction sectors – which make up the largest steel-using sector in the EU and represent 35% of total steel consumption in the trading bloc – they are not quite as bad as previously expected, sources told Fastmarkets in the week to Friday.
Notably, construction activity across the EU-27 fell by a moderate 0.8% in 2023 and for 2024, according to European steel organization Eurofer, which said that construction activity would continue to decline this year, falling by 1.4% rather than its previous prediction of a 1.9% decline.
The sector is then expected to show a modest 1.8% growth in 2025 (albeit revised down from 2.7%), Eurofer added.
Expansion in Poland
Germany’s expansion in the Polish market can be seen in the 2023 financial report from European long steel producer Feralpi Group, which shows the company’s sales revenues were only increasing in Poland and “other countries” category.
Italy-based steelmaker Feralpi also has rebar production facilities in Riesa, Germany, which started offering rebar in the Polish market more actively last year.
Feralpi’s Riesa steelworks has 1 million tpy electric-arc furnace and can produce rebar and wire rod. The company has recently invested in a rebar mill capacity extension.
In 2023, Feralpi revenues from sales in Poland reached €60.02 million ($66.83 million), which represents a huge increase compared to 2022, when it was only €10.12 million.
At the same time, Feralpi registered declining revenues from sales to the domestic markets in Germany Italy, France, Switzerland, and Austria.
“Last year, Germany expanded strongly in the Polish market,” a distributor source told Fastmarkets, adding that this was mainly due to increased shipments by Feralpi. Before that, exports came mainly from the German division of Riva.
“Prices [for long steel products] from Riva and Feralpi are very competitive – even compared with the prices from Ukraine,” the source said. “Besides, [the German divisions of both companies] cover all the transport [costs], if necessary.”
A second distributor source told Fastmarkets that the quality of rebar offered by the German producers was “good and at competitive prices.”
The source added that local producers in Poland would probably adjust their offers so that they could keep the local market in their own hands.
Rebar from Germany was on offer to Poland at €625-635 per tonne CPT at the beginning of August. In comparison, Ukrainian material was heard offered to Poland at €570-580 per tonne DAP border, sources told Fastmarkets.
Recently, however, even lower import offers for German rebar were heard in Poland at €615-625 per tonne CPT.
Fastmarkets’ weekly price assessment for steel reinforcing bar (rebar) domestic, delivered Northern Europe, averaged at €654.62 per tonne in 2023, also proving that German offers could be quite competitive.
In comparison, the average yearly level of Fastmarkets’ weekly assessment for steel reinforcing bar (rebar) domestic, cpt Poland, stood at 2,932 zloty ($760) per tonne CPT in 2023, which equals to €682.92 per tonne, or this higher than the average price assessment in Northern Europe for last year.
At the same time, the volume of long steel products imported to Poland from Italy declined in 2023, according to Fastmarkets data, with just 60,961 tonnes arriving – down by 22,678 tonnes from 83,639 tonnes in 2022.
Published by: Julia Bolotova, Darina Kahramanova