Spanish auto industry’s performance falls in summer
The Spanish automotive sector saw performance drop month-on-month and year-on-year in July. It lost strength also during the August holidays. Exports followed a similar seasonal pattern, Kallanish notes.
National automotive association Asociación Nacional de Fabricantes de Automóviles y Camiones (Anfac) released July and August figures jointly due to the summer seasonality.
Output in July was 183,635 units, compared to 218,950 vehicles in June. This was also 10% less than July 2023. In August, the country produced just 73,434 units, down 60% m-o-m and 20% less on-year. Eight-month cumulative production amounted to 1.58 million vehicles, a fall of 1.5% over the same period last year.
“This is a complex time for the automotive sector, with the European market in a downward trend, a decline that directly affects production volumes. To be more efficient, factories are producing on demand and without stocks,” says Anfac general director José López-Tafall.
July exports totalled 171,811 units, compared to 186,813 in the previous month and 5.4% less y-o-y. August shipments declined sequentially by 52.2% to just 77,038 vehicles. This volume was also down 17.7% on-year. Spanish eight-month exports decreased by 2.2% over January-August 2023 to 1.42 million units.
European markets represented almost 93% of Spanish deliveries in both July and August, Anfac data show.
Todor Kirkov Bulgaria
German prices to drop further in autumn: analyst
Prices for flat products in northern Europe could go down by another 5-8% until the end of October, according to MBI Infosource analyst Peter Fertig.
Speaking at MBI’s annual Stahltag event in Frankfurt, Fertig said he expects the negotiation position of mills will continue to weaken over the following six weeks. The price of cold rolled coil in Germany is now at its lowest since December 2022, assessed at €660/tonne ex-works ($736), he added at the event attended by Kallanish.
One year ago at the same event, Fertig made a forecast for hot rolled coil prices in 2024 within a range of €750/t best case and €475/t worst case, or an average of €575/t. As it turned out, €750 was the peak seen on the market in February, while €575 roughly matches today’s market price in Germany.
In his presentation, he underlined that several unexpected factors like the wars in Ukraine and the Middle East have disrupted the “quantitative forecast model”. He noted: “If a sideline scenario becomes the dominating factor, this is a disaster for steel.”
Talking about the influence of China on the global market, he stated that the Chinese government is trying to incentivise residential construction, “but not in the traditional sense with new-building, but by regulating overproduction in the sector.” He acknowledged the government’s ambitions to reduce emissions and to keep steel production from rising.
He said prices of long products imports like rebar and wire rod from China have risen slightly, by 1%, and that a slight devaluation of the euro helped to reduce Europe’s attractiveness as a market.
Looking at incentives for construction in Europe, Fertig pointed out the European Central Bank is too hesitant with reducing the interest rate, meaning demand from construction will stay sluggish. “Looking at a horizon of three months going forward, prices of long products will be 5% below the current level,” he concluded.
Christian Koehl Germany
Acciaierie d’Italia suitors rise to 15
Italy’s Minister of Enterprises and Made in Italy (MIMT), Adolfo Urso, has announced there are 15 potential investors for distressed steelmaker Acciaierie d’Italia (ADI), formerly known as Ilva.
ADI’s special administration is progressing with its sales process and is currently evaluating the letters of interest that were submitted by the deadline of 20 September.
While unions are advocating for the company to be sold as a whole, a plan of action involving a split of the business and the sale of its individual assets presents a feasible alternative, Kallanish notes.
According to sources close to the dossier, Vulcan Green Steel, based in Oman, along with Canada’s Stelco and Baku Steel Company, have submitted a letter of interest for the acquisition of all assets belonging to ADI.
In the meantime, several firms are evaluating the possibility of acquiring specific assets from the former Ilva in the north of Italy. Marcegaglia has expressed interest in acquiring the tube mills and the Novi Ligure facility, a re-rolling plant situated between Genoa and Alessandria. Other interested parties include Italian service centres such as Eusider, Sideralba as well as Amenduni Steel, Carbones, Jiangsu Steamship, Profilmec and others.
Metinvest conducted a visit to Taranto during the summer months, and steelmakers Arvedi and Nippon Steel have been considering investing. However, it remains uncertain if these companies have formally expressed their interest through a letter.
MIMT and ADI’s special commissioners invited expressions of interest in July for the acquisition of the struggling steelmaker’s assets. The aim of the sale is to swiftly and effectively reduce CO2 emissions and enhance steel production in Italy, by bringing about a change in management. The commissioners have asked potential buyers to preserve employment.
At this stage, ADI’s suitors have not been asked to quote a potential price in their offers, Kallanish understands. The special commissioners intend to pursue the sale “preferably” by transferring the assets as a whole.
Natalia Capra France
Emsteel enters talks for Celsa units’ acquisition: reports
Celsa’s divestment of its non-Spanish steelmaking units is gaining momentum. United Arab Emirates’ largest steelmaker, Emsteel, is in talks to acquire the Spanish firm’s plants in Poland, the UK and Norway, according to reports.
Asked by Kallanish about the reported interest from Emsteel, a Celsa spokesperson said: “We can neither confirm nor deny anything until the operation is finalised.” However, the firm confirms the selling process for the units is underway and there are several interested investors.
Meanwhile, the UAE state-owned company says it is aware of recent media reports but its policy is not to comment on “rumours or speculation”. It explains: “We regularly assess organic and inorganic opportunities to grow the business. Any relevant announcements will be made in line with regulatory requirements.”
Celsa expects to strengthen its financial position by selling its Huta Ostrowiec works in Poland, as well as its Norwegian and UK steel plants for around €1 billion ($1.11 billion). Market analysts, however, estimate the value of the assets has fallen significantly amid the current uncertainty in the steel sector. These operations generate 50% of Celsa’s group Ebitda.
Two southern European long products makers were reported to have had bids rejected recently for Celsa’s Polish plant (see Kallanish passim).
Celsa meanwhile remains focused on finding a new local partner in Spain. This was a requirement set by the Spanish government when the main creditors took control from the Rubiralta family last year. Since Celsa is considered a strategic business, the new owners must find a local investor to take a 20% stake in the group, according to the commitment.
The Spanish press has reported that Sidenor, Megasa and Christian Lay have shown interest and meet the requirements. However, Celsa has indicated that its priority remains the possible sale of the foreign units before closing a partnership deal with one of these companies.
Todor Kirkov Bulgaria , Burak Odabasi Turkey
EU customers paying green stainless steel premium: Outokumpu CFO
Demand for Outokumpu’s Circle Green® products, which was launched in 2023, is steadily rising, Marc-Simon Schaar, chief financial officer of Finnish stainless steel producer Outokumpu told Fastmarkets on the sidelines of NYC Climate Week on Monday.
“Profitability and sustainability are not mutually exclusive,” Schaar said, and gave the example of consumer goods manufacturer Fiskars Group as one of the customers buying the Circle Green® product at a premium. Additionally, there is also interest from automotive companies including BMW and Mercedez-Benz, Schaar said.
The company has sold between 10,000-20,000 tonnes of the product since launch, mostly to European customers.
The uptake of the premium product has been slow in the United States as compared to Europe, Schaar said, adding that the impact of carbon emissions from Outokumpu’s regular stainless-steel offering is already low.
Outokumpu’s regular stainless-steel products generate 1.5 tonnes of carbon dioxide per tonne of steel produced, Schaar said, which is lower than its competitors.
The investment in technology to lower carbon emissions is a “license to operate,” Schaar said on Monday. “If we do not invest, it will come back to us as a cost.”
“Who will pay the green steel premium? It is us; it is our planet,” Schaar said.
The CFO also highlighted that stainless steel producers in Europe and the US are struggling against imported stainless steel from China, which has a much higher carbon footprint.
“There should be a worldwide carbon tariff system,” Schaar said, arguing that it would incentivize producers to invest in decarbonizing the steel supply chain.
Fastmarkets’ monthly price assessment for stainless steel 304 cold-rolled sheet, fob mill US was $165.75 per hundredweight ($3,315 per short ton) on September 10, down by 2.21% from $169.50 per cwt on August 12 and down by 6.62% from $177.50 per cwt on July 10.
Published by: Rijuta Dey Bera
European HRC prices inch lower again; rock bottom not reached yet: sources
Trading remained limited across the European HRC market on Tuesday.
Steel service centers and distributors were not hungry for new volumes because they were struggling with insufficient order intake from end users, sources said.
On top of this, buyers were unconvinced that HRC prices have hit rock bottom and chose to take a wait-and-see stance in the declining market.
Offers for HRC with lead times of four to six weeks were reported at €560-570 ($623-634) per tonne ex-works from integrated mills in the region. One supplier reported an offer at €580 per tonne ex-works.
But transaction prices were lower, at €540-550 per tonne ex-works, sources said.
“Mills are accepting €540-550 [per tonne ex-works] even for small tonnages because they need to fill order books,” a distributor in Germany said.
As a result, Fastmarkets’ steel hot-rolled coil index domestic, exw Northern Europe was €552.71 per tonne on Tuesday, down by €3.29 per tonne from €556.00 per tonne on Monday.
The index was down by €12.29 per tonne week on week and by €49.12 per tonne month on month.
Even though buyers suggested there was still room for a price decline, producers claimed that current selling prices for HRC were already below cost.
“Mills choose volumes over prices and sell [HRC] below costs,” a second distributor said.
Sources suggested that mills might slow down or cut steel production in November-December to balance the market.
“It’s a tricky situation for the mills,” a steel service center source in northern Europe said. “On one hand, they must produce [steel] to secure free carbon credits for the next year, but on the other hand, they are losing money, selling steel at dumped prices in an oversupplied market.”
“Maybe producers will extend usual December maintenance and stoppages,” the source added.
In Southern Europe, meanwhile, Fastmarkets’ daily steel hot-rolled coil index domestic, exw Italy at €552.50 per tonne on Monday, down by €3.75 per tonne from €556.25 per tonne on Monday.
The Italian index was also down by €12.50 per tonne week on week and by €47.50 per tonne month on month.
Sources reported offers for HRC from a domestic mill at €570-575 per tonne delivered on Tuesday, with lead times of end-October to early November, equivalent to €555-560 per tonne ex-works.
European suppliers were heard offering HRC with similar lead times to Italy, at €560-570 per tonne delivered.
Trading in Italy was poor, Fastmarkets heard.
“We will start booking volumes for November in about two weeks,” a domestic steel service center source said.
Meanwhile, import HRC offers from Asia were coming in at €525-535 per tonne CFR to Italy for shipment from end-October to November.
But sources pointed out that buying interest for imports was close to nil due to a small gap with domestic prices and all the trade restrictions in the EU.
Sources estimated tradeable prices for Asian imports at no more than €500 per tonne CFR, but no such offers were reported to be available in the market.
Published by: Julia Bolotova
WV Stahl: German August crude steel production up 0.5% on year
German crude steel production edged up 0.5% year on year to 2.9 million metric tons in August, according to data published Sept. 24 by German steel federation WV Stahl.
However, the volume was down 8.6% month on month, according to the data.
This brought January-August crude steel production from German mills to 25.4 MMt, up 4% year on year.
Of the total August volume, 2.1 million was produced from blast furnaces, down 0.1% year on year, and down 9.1% from July.
This brought the total for the eight-month period to 18 MMt, increasing 2.2% year on year.
According to WV Stahl, German crude steel production from electric arc furnaces in August totaled 734,000 metric tons, up 2.3% year on year but down 7% month on month.
Output from EAFs over January-August also increased 8.6% year on year to 7.4 MMt.
Meanwhile, Germany produced 2 MMt of pig iron in August, up 0.3% year on year, but down 7.4% form the previous month, bringing the eight-month volume to 16.55 MMt, up 2.4% year on year.
Output of hot-rolled steel products in August dropped 3.1% year on year and 9.6% from July to 2.35 MMt, with the January-August volume up 2.6% at 21.7 MMt.
Platts, part of S&P Global Commodity Insights, assessed domestic HRC prices in Northern Europe at Eur555/mt ex-works Ruhr Sept. 23, down 20% since the start of 2024.
worldsteel: global steel production falls 6.5% on year in Aug
Global crude steel production totaled 144.8 million metric tons in August, dropping 6.5% year on year and down 4.9% from July, according to World Steel Association data published Sept. 24.
This brought total production for the first eight months of 2024 to 1.25 billion metric tons, down 1.5% on the year.
China produced 77.9 MMt in August, down 10.4% on the year and 6% from July, making up 53.8% of total global crude steel output.
This brought China’s January-August volume to 691.4 MMt, down 3.3% year on year.
The world’s second-largest steel producer India saw production grow 2.6% year on year in August to 12.3 MMt, which was also up 1% month on month, the data showed.
India’s cumulative January-August output rose 6.5% to 98.5 MMt, according to worldsteel.
Japan’s August production was 6.9 MMt, down 3.9% on the year and 3.2% lower than July, with January-August output down 2.9% on the year at 56.7 MMt.
US output in August was 7 MMt, edging up 0.7% year on year and up 3.4% on the month, taking January-August production to 53.8 MMt, down 1.7% year on year.
Russia was estimated to have produced 5.8 MMt in August, falling 11.5% on the year and down 0.7% month on month, bringing its estimated January-August output to 48.5 MMt, down 4.9% on the year.
South Korea produced 5.5 MMt of crude steel in August, down 2.2% year on year and down 0.9% from July, with the eight-month volume down 5.5% on the year at 42.5 MMt.
Europe Jan-Aug output up 2.2%
For the European Union, crude steel production rose 2.2% on the year to 9.1 MMt in August, although this was 17% lower on the month, the data showed.
Europe’s January-August volume was 87.2 MMt, climbing 1.5% on the year.
Germany, the largest steel producer in Europe, saw its crude steel production edge 0.5% higher on the year to 2.9 MMt, although this was down 8.6% on the month.
In January-August, Germany produced 25.4 MMt of crude steel, up 4% year on year, the data showed.
Platts, part of S&P Global Commodity Insights, assessed domestic HRC prices in Northern Europe at Eur555/mt ex-works Ruhr Sept. 23, down 20% since the start of 2024.
Of the top 10 producers, Turkey saw the largest gains in August, with output rising 13.8% year on year to 3.1 MMt, according to the data, also representing a 3% increase from July. Eight-month production was up 14.8% on the year at 24.8 MMt.
Brazil produced 3 MMt in August, rising 7.3% year on year, but down 3% from July, while Iran’s monthly output was 1.4 MMt, falling 9.9% on the year and 22.7% lower than the previous month.
Brazil’s estimated production over January-August climbed 3.8% on the year to 22.4 MMt, while Iran’s output for the eight-month period rose 1.9% to 19.8 MMt.
October production of pig iron from 37 countries was 102.3 MMt, falling 6.1% year on year, the data showed, while direct reduced iron produced worldwide from 13 countries amounted to 10.5 MMt, up 3.35% year on year, the data showed.
Pig iron output over the January-August period totaled 854.6 MMt, down 3% year on year, while DRI production for the period rose 5.85% on the year to 82.7 MMt.
Crude steel data covers the 71 countries that report to worldsteel, accounting for about 98% of the world’s crude steel production.
EU HRC prices: when there is no market, there is no bottom
Domestic prices for European hot-rolled coil fell Sept. 24 amid declining demand and muted activity, even as mills kept furnaces running in order to claim carbon credit allowances for next year.
“We are on the limit,” an Austria-based mill source said. “Enquiries are very low in the market, and I expect prices to bottom out soon.”
“Prices became weaker,” a Germany-based service center source said.
The buying activity has been very limited in the market and mills are willing to settle at lower prices, sources said. Opinion remained mixed on the extent of a further fall in prices, with some sources saying there could be a significant decrease in prices unless mills cut production.
“I think we are reaching the bottom but [it] depends on how desperate mills are to sell,” the source said. “When there is no market, there is no bottom.”
Some sources also said that at the beginning of a quarter, service centers sell a lot of newly cleared material at lower prices in order to make room for storage. The safeguard quotas for the October-December quarter will open on Oct. 1, and that is expected to be immediately filled up, sources said.
“At the start of every quarter, service centers sell a lot of material that was already lying at ports at lower prices in order to clear storage space,” an Italy-based service center source said.
Platts assessed Northwest European HRC at Eur540/mt ex-works Ruhr on Sept. 24, down Eur15/mt on the day. Bids were reported at Eur520/mt ex-works Ruhr and tradable values were reported at Eur530-550/mt ex-works Ruhr.
Meanwhile, Platts assessed domestic HRC in Southern Europe at Eur540/mt EXW Italy, down Eur10/mt on the day. Tradable values were reported at Eur535-545/mt EXW Italy.
The interest in imported HRC remains muted because domestic prices are comparable to import offers now, sources said.
“Domestic prices [are] comparable with imports, so it does not make sense to buy from imports,” the Germany-based service center source said.
Platts assessed imported HRC in Northwest Europe stable on the day at Eur525/mt CIF Antwerp, down Eur15/mt on the day.
Meanwhile, Platts assessed imported HRC in Southern Europe at Eur525/mt CIF Italy, down Eur10/mt on the day.