New decoiling line for Tata Steel plant in Maastricht
Tata Steel Nederland announces the inauguration of a new decoiling line at its Feijen steel service centre location in Maastricht.
This is the largest investment ever made by Feijen, involving a sum of 20 million euros. With the state-of-the-art processing line, Tata Steel Nederland can deliver faster and higher quality steel to its customers in the machine building and industry sectors.
The new line involves a so-called decoiler and an automated sheet packaging line at the Feijen location in Maastricht. Hot-rolled steel coils from Tata Steel in IJmuiden are processed into steel sheets. In close corporation with the IJmuiden steel mill colleagues, Feijen focusses on customers in Europe as well as in other parts of the world. These customers are active in markets such as agricultural and earthmoving machinery, trailers, cranes, and shipbuilding.
Tata Steel Nederland consists of two business units: Business Unit Tata Steel IJmuiden (TSIJ) and Business Unit Tata Steel Downstream Europe (TSDE). Service Centre Maastricht is part of TSDE and consists of two locations: Multisteel and Feijen. Multisteel processes steel coils in the thinner segment, such as cold-rolled and galvanized steel. Feijen processes hot-rolled steel coils. Both sites predominantly process steel coils from TSIJ. Some major end customers supplied from Maastricht include JCB, John Deere, CNH, and Volvo Construction Equipment.
In line with Tata Steel Nederland’s broader vision of sustainability, Service Centre Maastricht announces today its carbon neutrality for Scope 1 and 2 emissions. This initiative underscores Tata Steel Nederland’s commitment to reducing its environmental footprint and aligns with its long-term strategy of achieving carbon neutrality across its Downstream operations. Scope 1 concerns direct CO2 emissions caused by sources within the organization itself. Scope 2 concerns indirect emissions created by the production of the electricity or heat that an organization buys.
Downstream Europe processes steel from IJmuiden for high-grade applications in specific market segments, such as construction (metal roofs and wall cladding), the mobility sector and the energy sector (batteries). With 19 production sites in ten countries, TSDE supplies to customers located mainly in Europe and partly in the United States. TSDE is divided into five business units: Building Systems, Colors, Distribution, Plating and Tubes.
Read more: tatasteelnederland.com
Rosso Steel invests in Schuler laser blanking line
Czech steel service centre Rosso Steel has ordered a laser blanking line from Schuler, Kallanish hears from the German supplier of sheet processing technology.
The LBL 2.21 type line for body panels will be installed at the Zaječí site and is the first Schuler laser blanking line in the Czech Republic, the company notes. It can handle coil weights of up to 30 tonnes, strip widths from 400-2,150mm and strip thicknesses from 0.6-3mm, at a maximum strip speed of 60m/min. The laser blanking line also has two laser cutting heads, each with a rated output of 4 kW, and operates at a maximum cutting speed of 100m/min.
The system can be used to produce both outer skin blanks and structural parts in high product quality. It is precisely these flexible production conditions that are in demand at Rosso Steel, according to Schuler.
Rosso Steel is one of the largest family-owned companies in the Czech Republic. The two service centres in Zaječí and Mirošov process ultra-high-strength materials up to 1,200 MPa. The company has been operating for over 33 years, purchasing, processing and selling different flat steel products. It supplies up to 180,000 t/year of steel coils, strips and sheets to more than 80 regular customers in Central and Eastern Europe.
Christian Koehl Germany
German stockist prices rise for long products
German stockholding steel distributors’ flat products prices continued on a downward trend in August, while some long products stabilised, and in fact gained.
According to the table of monthly average sale prices by stockholders as compiled by their association, BDS, the price for hot-rolled sheet in August was €824/tonne ($917), down €5.30/t from July. HR sheet prices have been tumbling continuously from the peak reached in February at €884/t.
The downward trend since February has been similar for cold-rolled sheet, which in August came to €905/t – down €9.50 – and coated sheet at €972/t, which saw the steepest on-month drop of all products, down €15.40. Quarto plate fell by €12 to €900/t, after a slight rebound in July.
In the category of long products, price increases were achieved for sections, which rose by €9.30 to €843/t, and for wide flange beams, by as much as €12.20 to €848/t. The increase is not as steep as the €30-50/t hike obtained by mills for sections since August.
Supply shortages at European mills have created a bit of a restocking panic at warehouses, one observer tells Kallanish. Another buyer expressed doubt that he can hand down the price increase to construction companies, which are suffering the most among players in the steel chain. Still, it is likely that stockholders’ sales prices will rise for another month or two, with a delay following mill price hikes.
Rebar prices meanwhile rose by €14.20/t between June and August.
Christian Koehl Germany
Italian coil market stagnates, prices decline
The hot rolled coil market in southern Europe is currently experiencing significant stagnation. Overall order levels in both Europe’s import and domestic HRC markets are notably subdued.
“Steel consumption has decreased by approximately 20% this year, with certain end-user sectors experiencing more significant declines than others, particularly agriculture and automotive,” a service centre in Italy tells Kallanish. Coil derivatives, including tube and sheet, are going through a substantial drop in sales accompanied by decreasing prices.
European mills are seeing an overall decrease in orders and are operating with reduced lead times. “The complete value chain is experiencing a crisis and facing margin pressure. The current prices and market dynamics are no longer sustainable,” notes another coil buyer in Italy.
Import prices for HRC from Asia into Italy have significantly decreased since August, and there is a lack of purchasing interest. Asian suppliers are offering at €530-550/tonne ($589-611) cfr in Italy, but European and Italian steelmakers have lowered their asking prices to match import offers, making local purchasing more alluring.
Inventory levels in Italy remain relatively high, suggesting no immediate necessity for HRC procurement. Most buyers are going to wait and watch rather than make a purchase.
Countries that have exhausted their EU quotas have been replaced by alternative suppliers like Turkey, which has provided competitive offers. Currently, prices for service centre quality HRC in Italy are at approximately €550/t base delivered, or around €530/t base ex-works.
Market participants expect further price reductions in the upcoming weeks. In July, prior to the August summer break in several EU countries, HRC prices in Europe were reported at €615-620/t base ex-works.
Natalia Capra France
CBAM is step forward but not enough to rebalance global markets, European IREPAS conference attendees say
CBAM, a carbon tariff for all carbon-intensive products imported into the European Union, was passed by the European Commission in December 2022 and its transitional phase began in October 2023.
Starting in October 2023, buyers of goods originating outside the EU must purchase certificates which equal the total emissions in the production of the goods.
There is no limit to the number of certificates that can be purchased to avoid restricting trade.
The cost of these certificates are calculated by the European Commission on a weekly basis according to the average price of the closing EU Emission Trading System (ETS) carbon dioxide (CO2) allowances for each week.
Impact of CBAM
CBAM can help to address imbalances related to European companies who are constrained by carbon taxes attempting to compete with countries who are not subject to any regulatory strictures, Louis Redshaw, Founder of Redshaw Advisors, told IREPAS attendees.
CBAM will help reduce carbon leakage, Redshaw said.
Carbon leakage was described when, for reasons of costs related to climate policies, businesses were to transfer production to other countries with more relaxed emission constraints, in turn resulting in an increase in their total emissions.
By placing a fair price on the carbon emitted during the production of all carbon-intensive products entering Europe, European mills, who currently need to pay for carbon credits equivalent to their carbon emissions, will be on a more equitable basis with importing countries who do not currently have the same taxes in place.
Some European market participants, however, were skeptical about how effective CBAM would be in rebalancing the playing field.
Carbon credits
European companies must buy carbon credits, normally from the government, to produce steel. When a company buys a carbon credit they can generate one ton of CO2 emissions.
The development of carbon credits turned carbon dioxide into a commodity, which could be monetized like any commodity.
Currently, the top 10% of the lowest emitting steel producers in Europe do not pay for carbon credits, while the remaining 90% of European steel producers have to pay varying amounts for carbon credits to offset their carbon emissions.
Pre-CBAM, European domestic mills were burdened by the cost of climate policies which non-EU countries were not, making them uncompetitive.
“CBAM will help to make competition fair. If importers are not taxed similarly to European mills, the European steel industry will die,” Redshaw said.
The greater a producer’s emission, the more they need to pay for carbon credits, thus incentivizing them to invest in decarbonizing processes.
By ensuring all countries importing steel into Europe have to pay similar amount, sustainable goals do not stop EU countries from being competitive or profitable.
Market responses
Many conference attendees felt that CBAM could help support European mills remain competitive when faced with so many economic challenges.
Some non-European exporters who were already providing CBAM certificates to buyers in Europe importing their stock, reported high levels of bureaucracy involved with submitting the correct information quarterly.
“It will help to put a fair price on the carbon emitted. Steel producers in Egypt who export to EU have already been asked to fill in necessary paperwork for CBAM. This is a very bureaucratic procedure and may become a burden in the future for producers,” a producer source from Egypt told Fastmarkets.
“CBAM will help support European mills and global targets towards becoming more sustainable,” a second producer source from Egypt said.
Skepticism
Some sources, especially in Europe, did not think CBAM would either encourage global decarbonization or significantly rebalance global markets.
CBAM has put a cost on carbon, but it is not enough to counter the other factors which have resulted in a lack of balance in the global markets, these sources said.
These factors included foreign country subsidies, lower gas and electricity costs, lower labor costs and lower or no regulations in the construction sector, the sources added.
These more skeptical market participants felt that by just putting a price on ‘carbon’, other key areas which required addressing were not being considered.
“Europe has been affected and limited by its own desire to become carbon efficient and this has been a contributing factor to Europe losing market share of steel production, weakening domestic demand and becoming uncompetitive domestically,” a German trader said.
Europe is currently trying to decarbonize, digitize and remain profitable, sources said. But, at least in the short term, the goal of decarbonizing is at odds with the goal of profitability, Fastmarkets heard.
“European producers don’t just have to deal with the carbon issue, they also have to deal with high energy costs because of high taxation on energy and renewable energy transformation and high energy costs and importing expensive raw materials and finding the money to invest in decarbonizing technology,” a producer source from Spain said.
Whereas there is a lot of pressure from every side to transition to low-carbon environment in Europe, this is not the same in non-EU countries.
In other countries, for example China and Algeria, where the steel industry is buoyed up by subsidies, carbon tariffs like CBAM will not incentivize them to decarbonize.
“China will just pay the increased costs with the massive government subsidies they receive. They will continue to emit just as much carbon and will continue to have far lower costs,” a trader at the conference said during a panel discussion.
“Even with CBAM and all countries importing into Europe having to pay for the cost of their carbon footprint, they still remain more competitive because of cheaper energy costs and cheaper labor costs,” a second producer source from Europe said.
Seven key things Fastmarkets learned during Irepas Fall 2024 meeting
More than 490 delegates from around the world gathered in Paris on September 15-17 to network and to participate in this key event for long steel producers.
Here are the seven main topics that were discussed at the conference:
Chinese dominance
China’s dominance in the international steel market has strengthened over the past year amid a drop in domestic demand and insufficient production cuts, and it was highly likely to continue in 2025.
Yeoh Wee Jin, secretary general of the South East Asia Iron & Steel Institute (SEAISI), described this year’s events in China as “a third tsunami” during a panel at the Irepas event. He expected the country’s steel exports to exceed 100 million tonnes this year, compared with 89 million tonnes in 2023.
Fall in iron ore prices
The decrease in steel production in China resulted in a fall in iron ore prices, as well as the accumulation of a significant stock of iron ore. Wilhelm Alff, chairman of the Irepas traders’ committee, said that iron ore stocks at Chinese ports currently totaled 149 million tonnes.
Fastmarkets’ daily index for iron ore 62% Fe fines, cfr Qingdao, has averaged $91.87 per tonne so far in September, compared with an average of $135.03 per tonne in January this year.
Meanwhile, scrap collection in Europe and the US has slowed down, Jens Björkman, the chairman of the raw material suppliers’ committee, said. This helped to support prices for the product despite delayed demand in Turkey.
The Middle Eastern country has switched to purchases of Chinese steel billet since the summer, when prices for the material became low enough to make production of rebar from billet more attractive than from scrap.
Fastmarkets’ daily index for steel scrap, HMS 1&2 (80:20 mix), North Europe origin, cfr Turkey, has averaged $363.36 per tonne so far in September, compared with $414.12 per tonne in January 2024.
Consequently, iron ore prices fell by almost 32% in the period under consideration, while those for scrap fell by 12.23%, making the blast furnace steel production route more profitable.
“Everybody wants to be a blast furnace-based steel producer for the next six months,” Alff said.
Shift in Turkey
Chinese steel prices remained attractive, including those for billet, so it was highly likely that Turkey would continue to meet its needs through billet imports, which would result in lower steel output in the country.
This situation could also exert pressure on scrap prices.
Trade defense
Turkey itself was limited in its long steel export opportunities at the moment, considering the imposition of trade defense measures in the US and in Canada, the almost-complete take-up of import quotas in the EU for the third quarter of 2024, with tonnages already sold for delivery in the fourth quarter, and with recent restrictions on the supply of steel products to Israel.
Some countries that formerly procured long steel from Turkey – such as Egypt, Algeria and states in the Gulf region – have become exporters themselves, according to the chairman of the Irepas producers’ committee, Murat Cebecioglu.
Yemen, plus a few other countries in the Middle East, and Latin America were currently the key destinations for Turkish long steel exports, he added.
Regional differences
Looking at the EU, Cebecioglu said that business has seemed to be at a standstill in the region for more than a year, and little or no improvement was expected in the next six months or so, a point on which other delegates at the event agreed.
Gulf Co-operation Council (GCC) countries were currently in a slightly better position than those in other regions because their economies were moving in the right direction.
New projects in Saudi Arabia, for example, were creating demand in the region, with the construction and real estate sectors being the driving forces.
Yeoh said that ASEAN economies were also growing, albeit more slowly because of the generally unfavorable situation globally. He said that the construction sector was booming across the region, except in Thailand. Meanwhile, manufacturing was weakening, mainly due to soft external demand.
Earlier this year, he said that ASEAN steel demand was expected to reach 76.5 million tonnes in 2024, up from 73.5 million tonnes in 2023.
Overcapacity in Asia
Meanwhile, unsustainable overcapacity and de-greening were in prospect in Southeast Asia, with at least 104.4 million tonnes per year of new capacities expected to come onstream by 2030. These would push the region’s total capacity to 181.5 million tpy if they were all implemented, Yeoh said.
Around 83.6 million tpy of new capacity would be based on blast furnace-basic oxygen furnace technology, Yeoh said, while only 20.8 million tpy would be based on direct reduced iron (DRI) and electric-arc furnace (EAF) capacities, and this would lead to an “explosion” of greenhouse gas emissions by the region.
Decarbonization
At the same time, Europe’s imposition of its CBAM regulations and the global trend for decarbonization were other major topics at the Irepas event.
Since its start in October 2023, buyers of goods originating outside the EU must purchase certificates corresponding to the total volume of greenhouse gas emissions created by the production of the goods.
The costs of these certificates are calculated by the European Commission on a weekly basis, related to the average price of the closing EU Emission Trading System (ETS) carbon dioxide (CO2) allowance for each week.
By placing a fair price on the carbon emitted during the production of all carbon-intensive products entering Europe, European mills that currently must pay for carbon credits equivalent to their carbon emissions will be put on a more equitable basis with producers that operate in exporter countries that do not impose similar taxes.
Opinions were divided on the effects of the CBAM rules on the European market – and beyond it. Many delegates to the Irepas event felt that CBAM could help European mills to remain competitive when faced with economic challenges. Some sources, however, did not think that CBAM would either encourage global decarbonization or significantly rebalance global markets.
CBAM has put a cost on carbon, but it was not enough to counter the other factors which have resulted in a lack of balance in the global markets, these sources said.
These factors included foreign country subsidies, lower gas and electricity costs, lower labor costs, and fewer or no regulations in the construction sector, the sources added.
Global overcapacity was also expected to slow the decarbonization transition and to hamper innovation, Luciano Giua, economic and policy analyst at the Organisation for Economic Cooperation & Development (OECD), said during the event.
Published by: Vlada Novokreshchenova, India-Inés Levy
