Negative sentiment prevails among buyers in European HRC market; trading limited
Buyers refrained from trading due to their expectations that HRC prices in Europe will continue to decrease, Fastmarkets understands.
Fastmarkets calculated its daily steel hot-rolled coil index domestic, exw Northern Europe at €580.00 ($642.91) per tonne on Monday, down by €0.75 per tonne from €580.75 per tonne on Friday September 6.
The index was down by €10.00 per tonne week on week and by €38.88 per tonne month on month.
Mills in Northern Europe were heard offering October-delivery coil at €580-600 per tonne ex-works.
Buyers’ estimates of the workable price were lower, at €560-580 per tonne ex-works, depending on the tonnage. the lower end of the range was deemed “unworkable” by suppliers, however.
“The tradeable market level is below €570 per tonne ex-works,” a buyer source told Fastmarkets, adding that they expect prices to slide further.
European mills struggled to stabilize prices, but there was not enough demand in the market, the buyer said, adding: “Final consumers are not restocking and are waiting to see how the market will develop by the end of September and the beginning of October.”
“I think that, this year, we will see prices below €500 per tonne ex-works,” a second buyer source told Fastmarkets. “The main problem is and will still be low demand.”
This, combined with decreasing prices of main raw materials and strong competition from imports, will continue to have a negative effect on prices, according to the second buyer.
“China is offering [HRC] at €550 per tonne CFR Antwerp, including all customs and taxes. And with the end of the year approaching, [European] mills will look for production capacity utilization, and prices will drop further,” the second buyer said.
A third buyer source said that prices would continue to decrease but was not sure at what levels the rock bottom would be reached.
In terms of imports, Vietnamese HRC was heard offered to Northern Europe at €525 per tonne CFR, but this price was not largely confirmed by market participants.
According to Fastmarkets’ sources, such offers would remain unattractive for the European market due to long delivery times — around four months from the initial order — and possible complications related to the anti-dumping duties.
In Southern Europe, Fastmarkets calculated its corresponding daily steel hot-rolled coil index domestic, exw Italy at €578.33 per tonne on Monday, down by €1.91 per tonne from €580.24 per tonne on Friday.
The Italian index was down by €11.67 per tonne week on week and by €39.80 per tonne month on month.
Sentiment in the Italian market was also largely negative, sources told Fastmarkets.
Offers of HRC in Italy were heard at €600 per tonne CPT from domestic and European suppliers for material with October lead times.
But buyers’ estimates of the tradeable price were at €570-580 per tonne ex-works.
Trading in the region remained limited and buyers in the Italian market also thought prices would continue to plummet, sources said.
Published by: Darina Kahramanova
Europe flat stainless steel prices approach floor; Acerinox resumes operations
Supply remained limited in August during the seasonal summer slowdown, with many steel mills undergoing maintenance. Demand was described by stainless steel service centers as inconsistent, with “weak days alternating with lively ones.”
“Final users expect a price drop,” a distributor said, “but the current market conditions do not support this. European producers don’t give in, and buying becomes an endless negotiation.”
Fastmarkets’ monthly assessment of the price for stainless steel cold-rolled sheet, 2mm, grade 304, transaction domestic, delivered North Europe, was €2,700-2,800 ($2,993-3,104) per tonne on Friday, widening downward from €2,750-2,800 per tonne one month earlier.
Industry sources were optimistic that demand would pick up in September and that prices would stabilize. According to a second distributor, mills would struggle to maintain the current prices.
“[Stainless steel mills] will fight for [the current prices], arguing that they would rather halt production than go lower,” the second distributor said. “At the same time, they’ll do whatever they can to fill the mills… We’ve heard this countless times before. Demand is king.”
The recent downtrend in finished stainless steel prices was in line with lower alloy surcharge values, which for grade-304 material were primarily based on nickel costs.
Fastmarkets’ monthly assessment of the stainless steel cold-rolled sheet, 2mm, grade 304 alloy surcharge, domestic, Europe, was €1,999-2,051 per tonne on Friday, down from €2,110-2,160 per tonne on August 2.
Acerinox returns to market
Acerinox has resumed operations in Spain at full capacity, Fastmarkets understands, after a months-long strike-induced shutdown [LINK] that was resolved in June. The stainless steel manufacturer was also understood to have fulfilled all back-orders.
“It is not yet possible to see the effect of Acerinox’s return to the market – it is still too early,” the first distributor said. “Any renegotiation of contracts slows down deliveries.”
Published by: Zdravko Cherkezov
Gunnar Groebler new president of Wirtschaftsvereinigung Stahl (WV Stahl)
The German Steel Federation (WV Stahl) has elected Gunnar Groebler, CEO of Salzgitter AG, as its new honorary president. He replaces Bernhard Osburg, who has resigned from the position.
Groebler expressed his commitment to preserving the competitiveness of the German steel industry and ensuring its future viability, especially in light of the current challenging market conditions. Osburg thanked the WV Stahl team for their support and wished Groebler success in his new role.
“I thank the Board of WV Stahl for their trust and look forward to shaping the future of the German steel industry in this role. Bernhard Osburg has done important and energetic work and provided valuable impetus under the currently extremely difficult market conditions. My task now is to do everything I can to preserve the acute competitiveness of our industry and to advance its future viability,” said Gunnar Groebler.
Bernhard Osburg on his departure: “It has been an honor for me to represent the steel industry in Germany as president of WV Stahl. I have been passionate about this industry for 25 years and the association is a political interest group that is focused on our pressing issues and does not need any distractions. I thank the entire WV Stahl team for their professional support during my tenure and the management for the excellent cooperation. I wish Gunnar Groebler every success and a happy hand in his new task.”
Centravis supplies pipe to Germany’s Voss
Ukrainian stainless seamless pipe producer Centravis has agreed on the regular supply of its products to German company Voss Fluid, which specialises in hydraulic connections and has subsidiaries in France, Poland, Italy, Spain and China, the company tells Kallanish.
According to Centravis, Ukrainian seamless pipes are used to produce joints with a very high degree of protection, which provides protection against leaks even in the most difficult operating conditions. In particular, these are utilised in projects that use hydrogen and compressed natural gas. “Voss Fluid has now developed and patented a special hydraulic connection for hydrogen and Centravis mainly supplies pipes for such projects,” it adds.
“We expect that, over time, the number of orders in this segment will grow, as hydrogen projects are becoming more popular every year,” says automotive sector lead at Centravis Viktor Chernetsky.
Earlier, Centravis, together with French company Duncha France, became a participant in the EU project for the production of cars with a hydrogen engine. For its implementation, Centravis has developed a line of high-precision seamless stainless pipes – H2FIT. They will be installed in light trucks and will help meet the EU’s zero-carbon targets.
Centravis increased production in the first half of the year to 6,880 tonnes, up by 9% on-year.
In 2023, Centravis posted production of 12,200t, up by 12% on-year (see Kallanish passim). Sales increased to 12,300t, up 7%. Centravis’ revenue remained flat on-year in 2023 at €135 million ($146m). Ebitda reached €10m against €11.3m in 2022.
The pipemaker sold more than 99% of its products on export markets. The main ones were Germany, with a share of about 40%, and the USA with a share of 20%. Significant volumes were also shipped to Italy, Austria, and the Czech Republic. In total, last year, supplies were sent to 38 countries.
Svetoslav Abrossimov Bulgaria
Northwest Europe CRC prices come under pressure
Coil prices in Europe continue to soften further as the summer nears its end, with cold-rolled coil struggling to maintain its value against hot-rolled and galvanized coil.
CRC production can cost nearly the same as galvanized-coated coil, according to a German industry senior. The re-rolling requires re-heating, while the process for galvanising HRC undergoes a heating effect during the zinc bath.
“That’s why certain sorts of CRC match the costs of galvanized coil,” he says.
Additionally, many mills can roll HRC to low thicknesses under 1mm that elsewhere require extra cold-rolling.
Traditionally, hot-dip galvanized coil tends to be at least €100/tonne ($110) higher than HRC, and CRC around €80 higher.
Some buyers in Germany and the Benelux confirm this relation, giving the lower current end for HRC from domestic mills at €580/t ex-works, and that of CRC at €660-670. HDG remains stronger, still holding at above €700.
Until a month ago, CRC prices had also held at above €700, but have since notably given in.
For months, mills had little interest in making CRC because of import pressure, industry observer tells Kallanish.
When European prices were still €20-30 higher a month ago, CRC imports could be had for €660/t delivered Ruhr. Domestic pricing has meanwhile closed in on import prices.
One German consultant with a proprietary forecast model assessed CRC already last month at around €680. That was only €60 above the HRC price of €620 that prevailed then, and confirmed the impression of many that the HRC-CRC gap is narrowing.
A Dutch service centre points at the “low appetite” from the automotive sector, a main consumer of CRC. This is especially painful for the integrated mills with their automotive-grade qualities.
According to him, demand from automotive for steel is 10-15% lower than last year.
Christian Koehl Germany
Tata partners with Czech service centre for decarbonisation
Tata Steel Nederland says it has signed a memorandum of understanding on decarbonisation with Czech steel service centre Steel Center Europe.
Steel Center Europe is a coil processing service centre equally owned by Japan’s Sumitomo Corporation and Spain’s Bamesa. It was established in 2004 by Sumitomo and Toyota Tsusho. Bamesa became co-owner in 2020.
The steelmaker announced the partnership on its LinkedIn account but did not specify what it entails. The note refers to Zeremis, Tata Europe’s emissions-reduced steel brand, which suggests the partnership is about Tata supplying Zeremis to the Czech firm, Kallanish notes.
“To support the green journey of all European mills, a separate department has been established within the Sumitomo Group, demonstrating their strong commitment to sustainability,” the note adds.
Christian Koehl Germany