Day: 4 September 2024

Prices were still under pressure due to oversupply and low demand from all the main steel-consuming sectors, Fastmarkets understands.

Mills in Northern Europe were heard offering HRC at €600 ($663) per tonne ex-works, but producers were willing to give discounts on bigger volumes, sources said.

Buyers estimated the workable market price at €580-600 per tonne ex-works.

Fastmarkets calculated its daily steel hot-rolled coil index, domestic, exw Northern Europe at €590.00 ($651.70) per tonne on Monday, down by €1.25 per tonne from €591.25 on August 30.

The Northern Europe index was down by €11.83 per tonne week on week and by €30.50 per tonne month on month.

“The European HRC market is currently quiet, almost dead,” a buyer source told Fastmarkets, adding that the market has not been this weak for years.

The combination of oversupply, soft demand and low import prices kept the downward pressure on local prices for HRC, a second buyer source said.

According to this source, consumption by the automotive sector was moderate, while demand from the construction sector was weak.

“Both buyers and sellers are still cautious,” a third buyer source told Fastmarkets.

Expectations of future developments in the market remained mixed. Some buyers expected that HRC prices would decrease further. Most producers, however, thought that prices had already hit rock-bottom and would stabilize soon, supported by some restocking.

In terms of imports, offers of Vietnamese HRC to Northern Europe were heard at €560 per tonne CFR.

HRC from China was offered to Northern Europe at €540 per tonne CFR, including anti-dumping duty.

Meanwhile, Fastmarkets’ daily steel hot-rolled coil index, domestic, exw Italy, was €590.00 per tonne on Monday, similarly down by €1.25 per tonne from €591.25 per tonne on the preceding Friday.

The index was down by €10.00 per tonne week on week and by €30.63 per tonne month on month.

Trading in Italy was similarly quiet, with the market restarting only slowly after the long summer break in August.

An offer from one domestic supplier was reported at €610-620 per tonne CPT (€600-610 per tonne ex-works).

But buyers estimated the tradeable market price at €580-600 per tonne ex-works.

Import offers of HRC to Italy remained scarce.

Published by: Darina Kahramanova

Fastmarkets calculated its daily steel hot-rolled coil index, domestic, exw Northern Europe at €590.00 ($652.69) per tonne on Tuesday, unchanged from Monday.

The Northern Europe index was down by €7.50 per tonne week on week and by €30.50 per tonne month on month.

Activity in the region remains very slow, sources said, with distributors and steel service centers having no need to restock due to continuing weak end-user demand.

“We might need to replenish inventories in about five or six weeks,” a steel service center source in Germany told Fastmarkets. “Lead times are short [and the] mills need to sell.”

HRC for October delivery was widely available from European suppliers, Fastmarkets understands.

In Germany, offers were reported at €590-600 per tonne ex-works, while in the Benelux area offers came in at €600-620 per tonne ex-works.

Sources told Fastmarkets that lower prices — €580 per tonne ex-works — could be achieved for volumes over 200 tonnes.

One Benelux-based mill was said to be offering HRC at €570 per tonne ex-works.

Sources said that the market was oversupplied and there were no signs of a recovery in demand from any end-user sectors.

“A recovery in demand can only happen when the economy picks up. It is to be hoped that, because of falling inflation, the [European Central Bank] will drop its interest rates — just as the US Federal Reserve has announced for September,” a trading source in the Netherlands told Fastmarkets.

Even though industry sources continued to stress that steel production cuts could help mills to stop the downtrend in an oversupplied market, no such announcements were heard from European steelmakers.

In Southern Europe, meanwhile, Fastmarkets’ daily steel hot-rolled coil index, domestic, exw Italy was €590.00 per tonne on Tuesday, unchanged day on day.

The index was down by €5.00 per tonne week on week and by €30.63 per tonne month on month.

No firm offers have been reported by Italian mills so far this week, while buyers’ estimates of the tradable level remained at €590 per tonne CPT (€580 per tonne ex-works) and €600 per tonne CPT (€590 per tonne ex-works) for smaller tonnages.

The recent restrictions on imports of flat steel — including a safeguarding review and an anti-dumping investigation into HRC from Egypt, India, Japan and Vietnam — have had little impact on interest in booking overseas coil in Europe, Fastmarkets understands.

In addition, most overseas suppliers are already offering late-October shipment materials, which would mean January arrival.

Sources reported offers from India at $620 per tonne CFR to Italy, while offers of Chinese HRC were heard at €540-550 per tonne CFR, including the anti-dumping duty.

Published by: Julia Bolotova

Austria’s steelmakers decreased crude steel production in July compared with the previous month, according to worldsteel data.

Output amounted to 633,380 tonnes, down by 0.6% from June and 0.5% less year-on-year, Kallanish notes. Austria remained in 22nd place in the ranking of top global steel producers, worldsteel data show.

In January-July, however, the country produced 4.47 million tonnes of steel, up 0.9% on-year.

Overall EU output in July decreased by 4.7% y-o-y to 10.8mt. In the first seven months of the year, steel production was 11.4% more on-year versus January-July 2023 to 78mt.

Austria’s largest steelmaker, voestalpine, said earlier it is carrying out the modernisation of its blast furnace No.6 in Linz that will last 80 days and cost $33 million (see Kallanish passim). A similar modernisation will start later at a BF in Donawitz.

The company observed that market trends have not changed significantly following the start of its 2024/25 business year in April.

In fiscal 2023/24 – ending March 2024 – voestalpine achieved satisfactory results, with overseas markets performing better than Europe. It said it expects good demand from railway infrastructure, aerospace, and warehouse technology to continue. The automotive industry and the energy sector, as its main segments, should largely continue their stable development to date.

Svetoslav Abrossimov Bulgaria

Following the departure of three executives and four supervisory board members at thyssenkrupp Steel, German union IG Metall has proposed that two board seats be occupied by politicians.

“We call on the national government and the state government of North Rhine Westphalia [NRW] to claim two board seats,” IG Metall chairwoman Christiane Brenner said during a meeting of IG Metall’s leading committee on Monday. This move would be necessary to guarantee a transparent and fair balance of responsibilities between tk Steel and parent thyssenkrupp AG, the union says in a press release sent to Kallanish.

The union argues government has a right to such a claim on the basis of the €2 billion ($2.2 billion) of public funds granted as subsidies for the steelmaker’s technological transition. It points out that two seats have been given to Daniel Křetínský and his company, EPCG, for their acquisition of 20% in tk Steel.

Policymakers tried to intervene last week when they noticed how shattered the relationship between thyssenkrupp’s management boards was. NRW premier Hendrik Wüst and national economy minister Robert Habeck asked tk Steel’s supervisory board to postpone their meeting by a month to win time, but the situation then quickly deteriorated.

IG Metall has also asked tk AG chief executive Miguel Lopez and supervisory board chairman Siegfried Russwurm to return to sensible dialogue with workers’ representatives.

An ongoing internal dispute between shareholders’ representatives at tk AG and the boards of tk Steel ended in the departure of multiple Steel unit executives last Thursday (see Kallanish passim).

In a subsequent reaction on Friday, the union stated that the departure of experienced steel executives will set the company back significantly. “Thyssenkrupp Steel is in the thick of the possibly biggest crisis in its history,” it said. “The shareholders’ representatives at the AG need to ask themselves to what extent they contributed to that escalation.” It criticised the representatives for having driven away the steel executives in a “headless campaign”.

Also on Friday, Russwurm was heard firing back at tk Steel in a statement that was not widely distributed. Tk Steel’s management “did not succeed, in a matter of months and actually years, and despite respectable efforts, to find answers to the structural challenges,” he was quoted as saying by dpa.

Christian Koehl Germany

Indian hot and cold rolled coil export activity to Europe remains slow amid summer holidays and limited buying interest, Kallanish learns from sources.

A source opines: “The [European HRC] market is still sluggish.” Demand is low due to, in some cases, extended summer holidays and persisting weak buying interest, he adds. EU safeguard quota-related issues are also a factor.

Indian-origin HRC supply into the EU since 1 July stood at 234,900 tonnes as of 2 September, according to Eurometal data. About 66,800t or 22% of the third-quarter quota remains for future allocations.

India-origin offers were heard this week in the European market, after several weeks of no activity due to summer holidays and no buyers in the market.

India-origin HRC offers were reported at $605-610/tonne cfr Antwerp, or $550-555/t fob India for S235 grade, end-September/October shipment. This is a drop of $35-40/t from the last heard HRC offers a month ago.

Last week, an India-EU HRC deal was heard concluded at $605-610/t cfr Antwerp, or $550-555/t fob India, for S235 grade, end-September shipment, for 10,000t.

Some India-Italy HRC offers were heard at around €560/t ($618) cfr Italy, but for prompt delivery.

Indian-origin CRC offers to Europe were heard at $690-700/t cfr Antwerp, or $635-645/t fob India, DC01 grade, end-September/October shipment. This is a $5-10/t drop on-week.

Sources note some small-quantity CRC orders are being booked on and off in this range, having a quantity of 500-1,000t.

In the South Asian market, India-origin offers to Nepal were heard at around $550-565/t cfr delivered up to the Indian border/Raxaul Road. This is an on-week drop of $5/t.

In the African market, no new offers were heard this week. The last heard, limited offers, only applicable for select buyers, were reported at $580-590/t cfr Djibouti for end-August/September shipment, LC at sight, base commercial grades.

Suhita Poddar India

Italian passenger car production tumbled yet again in June and in the first half of the year, Kallanish notes from local carmakers association Associazione Nazionale Filiera Industria Automobilistica (Anfia) preliminary data.

Car output fell year-on-year by as much as 54.3% in June to 25,110 units, and by 32.2% on-year in January-June to 202,282 units.

By comparison, German six-month output declined by 6% to 2 million units, and by 9% to 350,200 cars in June. The UK recorded a notable fall in June of 26.6% to 62,231 cars and a 7.6% decline to 416,074 units in January-June. Spain’s June car production decreased by 7.2% to 175,580 cars and by 5% to 1m cars in January-June, Anfia points out.

Anfia is collaborating with the government and Stellantis to define a roadmap for the automotive industry’s relaunch. It aims at boosting Italy’s automotive production capacity beyond the level of 1 million vehicles/year through state support on decarbonisation, research and development, and new production plant investments (see Kallanish passim).

According to a Fim-Cisl union document, Stellantis’ production in Italy during the first half of this year saw a significant decline of 25.2%, resulting in the manufacturing of 305,510 vehicles.

“Anfia hopes that the agreement with Stellantis can be concluded in a very short time with the concrete commitment to increase national production – unfortunately, the production of cars and light commercial vehicles in Italy in the first half of 2024 reached around 300,000 units, down 25% compared to the same period in 2023, and no volume recovery is expected for the second part of the year,” Anfia president Roberto Vavassori says in a note obtained by Kallanish.

He urges Stellantis not to abandon strategic research and innovation activities and to strengthen relationships with the Italian supply chain instead of choosing “ultra-low cost countries’ suppliers”.

The current downturn in the domestic and European automotive industries is having a negative impact on sales performance and prices of EU coil in the third quarter. According to Italian industry insiders, there are expectations of a further decline in values and volumes in the coming weeks due to reduced consumption downstream. The market remains subdued this week after the summer break, a source says. He adds that coil buyers will be in a wait-and-see mood.

Natalia Capra France

Germany-headquartered trading company Steel Mont will join the tender to lease insolvent Polish plate mill Huta Czestochowa.

Steel Mont chief executive Rajesh Kumar Saraja tells Kallanish the company is bidding not for an acquisition but for the lease of Huta Czestochowa, like many other candidates that have expressed interest.

Steel Mont is the fifth interested party in Huta Czestochowa after Metinvest, Weglokoks, Sunningwell and the plant’s owner itself, Liberty Steel.

Huta Czestochowa was declared insolvent by the Czestochowa regional court and appointed an administrator in July after hitting financial difficulties. The firm’s administrator has since been looking to rapidly secure a firm to lease the plant in order to restart production. The mill has a 700,000 tonnes/year EAF and 1.2 million t/y heavy plate capacity.

Steel Mont is headquartered in Düsseldorf, with offices in Dubai and Mumbai. It handles plate, but also other steel products and commodities.

Christian Koehl Germany

With the summer break coming to an end, northwestern European market observers still do not see any prospect for plate prices to rebound.

“I cannot see any chance for the mills to obtain higher prices, although I would not be surprised if they tried,” a manager at a German distribution group tells Kallanish. One other buyer claims there have been recent attempts, “but to no effect”.

“There is nothing that would justify and support an increase, the demand is just too limited,” a representative of a mill group says. He notes that customers keep pressuring prices down, while costs are simultaneously increasing.

Some offers during the summer for S355 grade plate from domestic mills went down to €730/tonne ($808) delivered Ruhr, but the representative notes his offers would still be above that. One trader confirms such levels, but notes that “the market is dead”, and there is too little transaction activity to identify a representative price at all.

A buyer in northern Germany sees the domestic price range stretching up to €770+, which he says is also the price level of imports from Asia delivered to northern Germany. “For some projects, and there are not many, prices can be lower,” he notes. “I do not see an increase happening this year any more.”

The distribution group manager points at hike attempts made in Italy one month ago, “but that did not seem to be successful”, he concludes.

Christian Koehl Germany

Italian rebar buyers are showing renewed interest in price enquiries this week following the summer break. The market, though, is expected to continue its quiet trend for the next few days, Kallanish hears.

Buyers are adopting a cautious approach. There is a belief that prices for all long and flat products in Italy will decrease in accordance with declining scrap values in Italy and across Europe.

In early August, there was a decline in rebar contracts by €10-15/tonne ($11-16.6) compared to the previous month. This drop can be attributed to reduced consumption downstream. Transaction values in the domestic market in August ranged from €300-320/t base ex-works to €560-580/t ex-works effective. This includes an average of €260/t for additional size extras.

Domestic mesh is currently priced at approximately €400-430/t base ex-works, with an additional €300/t for size extras. There have been no new contracts implemented over the past three weeks.

According to a construction company and a distribution source, their plan is to rely on their current stock for the next few weeks and resume purchasing only when stocks are at a low level.

Several steelmakers resumed production and sales activity on Monday this week and are evaluating their new quotes. According to the construction company, there is a positive level of work in the infrastructure sector, while the distributor has a different perspective, stating that the market is currently experiencing a lull with no demand.

Scrap prices in Italy are anticipated to experience a notable decline, mirroring the lacklustre performance of both long and flat products (see Kallanish 30 August).

Natalia Capra France