EU HRC prices remain largely unchanged on weak demand
Domestic European hot-rolled coil prices remained largely stable Oct. 14, as buyers were skeptical of the sustainability of higher European offer levels. Additionally, the gap between domestic European mill prices and import prices remained low, resulting in the import market becoming less attractive.
“The market remains quiet,” said a Germany-based service center source, adding that there has been a “theoretical price movement upwards” despite real demand remaining weak. The source attributed higher offer levels to the impact of the Chinese stimulus package on domestic Chinese production costs and its effects on the European market.
The situation in the market stayed unchanged, contributing to uncertain market sentiment. Consumers remained hesitant to buy due to “a lot of material still waiting to be customer cleared,” according to a second Germany-based service center source, who added that “weak demand levels are not helping the current situation.”
The market was rumored to be expecting a drop in prices in the coming week, as market participants remained unwilling to accept higher offer levels and mills struggled to maintain these increased prices.
Platts assessed Northwest European HRC at Eur545/mt ex-works Ruhr Oct. 11, down Eur5 on the day.
Offers were reported at Eur590/mt EXW Ruhr, while tradable values were reported at Eur540-550/mt EXW Ruhr. A tradable value for volumes of 10,000 mt and above was reported at Eur520/mt EXW Ruhr.
Platts assessed domestic HRC in Southern Europe at Eur545/mt EXW Italy, stable on the day. No offers, bids, deals or tradable values were reported.
Meanwhile, activity on the import market remained low as antidumping investigations continued. The gap between import prices and domestic European mill offer levels has decreased, making buying imports an even less attractive option.
Platts assessed imported HRC in Northwest Europe at Eur530/mt CIF Antwerp, down Eur5 on the day.
Platts assessed imported HRC in Southern Europe at Eur535/mt CIF Italy, stable on the day.
Italian car output continues to decline
Italian passenger car production fell again in July and in the first seven months of the year, Kallanish notes from preliminary data by automotive association Associazione Nazionale Filiera Industria Automobilistica (Anfia).
Car output fell year-on-year by 54.7% in July to 22,972 units, and by 35.5% on-year in January-July to 225,254 units.
By comparison, German seven-month output declined by 4% to 2.4 million units, but increased by 13% to 328,600 cars in July.
The UK recorded a fall in July of 14.4% to 67,478 cars and an 8.6% decline to 481,552 units in January-July, Anfia notes.
“The automotive production sector is in the context of industrial production decreasing again in July 2024 compared to the previous year’s levels,” Anfia says in a report.
“In July, the industrial production index as a whole closed down at 3.3%, and at 3.2% in the first seven months of the year compared to the same period in 2023,” it adds.
The association is collaborating with the government and automotive producer 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.
Natalia Capra France
Stahl Gerlafingen continues lay-offs
Swiss steelmaker Stahl Gerlafingen plans to make another 120 employees redundant, Kallanish learns from Swiss unions Syna and Unia.
The rebar mill already laid off a number of people when it closed the production line for merchant bar and sections in spring (see Kallanish 3 May 2024). The unions underline the mill’s important role for the country’s circular economy as a scrap-based producer. They call on policymakers to enforce requirements for the construction industry to use low-emission steels. They also criticise construction authorities for confining themselves to mere recommendations so far.
Stahl Gerlafingen is owned by Italy’s Beltrame group. Following the announcement, its head Antonio Beltrame was interviewed at the weekend by leading daily Neue Zürcher Zeitung (NZZ), which has been cited by numerous Swiss media outlets.
In the interview, he confirms the redundancy plans but maintains he wants to hold on to Stahl Gerlafingen. He blames politics for not acting against the unfavourable production conditions in Switzerland, mainly high power prices. Last year, peaking power prices caused massive losses for Gerlafingen, while at the same time prices dropped in France and Italy, he notes.
Plans for political support for Stahl Gerlafingen were repeatedly brought forward in recent months by several political factions in Switzerland at a national and regional level, but have not led to measures.
Christian Koehl Germany
Worldsteel revises down demand forecast amid manufacturing woes
Worldsteel has revised down its 2024 global steel demand forecast significantly, now expecting a 0.9% on-year decline to 1.75 billion tonnes, amid prolonged manufacturing sector and housing construction weakness. The previous projection was for 1.7% growth.
The association now anticipates a notable decline in demand in China and most major developed economies in 2024. India is however expected to maintain its strong growth momentum. Most other major developing economies should witness a demand rebound, recovering from the slowdown experienced in 2022-2023.
“2024 has been a difficult year for global steel demand as the global manufacturing sector continued to grapple with persistent headwinds such as declining household purchasing power, aggressive monetary tightening, and escalating geopolitical uncertainties. The ongoing weakness in housing construction, which is driven by tight financing conditions and high costs, has further contributed to the sluggish demand for steel,” Martin Theuringer, German Steel Association managing director and worldsteel economics committee chair, says in a note sent to Kallanish.
Ongoing Chinese real estate sector woes will slash demand in the country by 3% this year, while EU27 plus UK and USMCA demand are seen down 1.5% and 0.9% respectively. However, Indian demand is projected to rise 8%.
Global demand is expected to finally rebound in 2025 following three years of contraction, rising 1.2% on-year to 1.77 billion tonnes. However, this depends on the progress made in the stabilisation of China’s real estate sector, effectiveness of interest rate adjustments in spurring private consumption and business investment, and the trajectory of infrastructure spending dedicated to decarbonisation and digital transformation, worldsteel concludes.
Adam Smith Poland
Suppliers still pushing for higher European HRC prices despite buyer reticence
ArcelorMittal increased its HRC offer prices across Europe by €40 ($44) per tonne, either ex-works or delivered depending on region at the start of the month and, since then, several other European producers have followed suit. But on Monday they were all still pushing to achieve their new prices with wary buyers, Fastmarkets understands.
Buyers remain cautious despite the slight improvement in apparent demand and only limited volumes were traded, sources said.
Fastmarkets calculated its daily steel HRC index, domestic, exw Northern Europe, at €549.38 per tonne on Monday, down by just €0.20 per tonne from €549.58 per tonne on October 11.
The index was up by €11.30 per tonne week on week, but down by €16.87 per tonne month on month.
Offers of HRC in Northern Europe were heard at €560-590 per tonne ex-works. For larger tonnages, discounts of €10-15 per tonne were possible, market sources said.
But achievable values were estimated by most buyers at €540-550 per tonne ex-works.
The stabilization of domestic HRC prices was also supported by import offers being uncompetitive.
Asia-origin HRC was heard offered at €550-560 per tonne CFR Antwerp, while HRC from Turkey was offered at €580-590 per tonne CFR, including anti-dumping duty.
“Importing HRC is dead in customers’ minds,” a buyer source told Fastmarkets.
Apart from the comparatively high import prices, trade risks – such as an anti-dumping investigation and safeguards review – made such offers unattractive to European buyers, Fastmarkets understands.
In Southern Europe, meanwhile, Fastmarkets’ daily steel HRC index, domestic, exw Italy, was calculated at €545.00 per tonne on Monday, unchanged from Friday.
The Italian index was up by €5.00 per tonne week on week, but down by €25.00 per tonne month on month.
Sources reported an offer from one local supplier at €580 per tonne delivered (€570 per tonne ex-works), but buyers estimated the tradable price at no more than €540-550 per tonne ex-works.
Some deals for small volumes were reported at similar levels.
“Suppliers are pushing for higher prices,” a second buyer source told Fastmarkets, “but customers are strongly resisting.”
Published by: Darina Kahramanova
Polish rebar prices rise despite limited demand
Fastmarkets’ weekly price assessment for steel reinforcing bar (rebar), domestic, cpt Poland, was 2,500-2,550 zloty ($637-650) per tonne on Friday, widening up by 20 zloty per tonne from 2,500-2,530 zloty per tonne on October 4.
Polish mills were offering rebar at 2,500-2,550 zloty per tonne CPT through the assessment week, sources told Fastmarkets, up from offers at 2,530 zloty per tonne CPT in the week to October 4, with some mills granting discounts for larger volumes.
But demand for rebar in Poland remains limited and there were no major deals, sources told Fastmarkets.
On October 10, ArcelorMittal increased all long steel prices across Europe by €40 per tonne, but a source said those increases would only be felt in the Polish from October 14.
“In Poland, we have not observed any significant movement up,” a distributor source told Fastmarkets. “Polish mills have sold good volumes quite cheaply [in previous weeks] and now they can keep [slightly] higher levels for smaller clients,” the source added.
A distributor source said that, following ArcelorMittal’s price hike demand was only likely to come from “stockists with empty stocks, [so] Any price uptick will only be short-lived.”
Rebar from Germany was on offer in Poland at €590-595 per tonne CPT and there has recently been a significant increase in German rebar exports to Poland to compensate for the lack of demand from its own weak construction sector, Fastmarkets understands.
Published by: Darina Kahramanova