Day: 16 October 2024

Window systems manufacturer Velux will use ArcelorMittal’s XCarb low-carbon steel for several of its components. The companies are working together to lower the carbon footprint of the materials used in Velux roof windows by up to 70% compared with conventionally produced steel, Kallanish learns from ArcelorMittal.

The supply contract is for ten years. ArcelorMittal notes that its XCarb recycled and renewably produced flat steel is made in the Spain-based Sestao plant using a minimum of 75% scrap steel and 100% renewable electricity.

“Velux will use XCarb to manufacture the hinges and installation brackets for its roof windows,” explains ArcelorMittal Europe flat steel commercial director Laurent Plasman. “This long-term agreement sends a powerful message about the importance of steel in the decarbonisation of the everyday materials we all use.”

The supply is part of the company’s efforts on sustainability and reducing CO2 emissions.

“We are pleased to be reducing CO2’s impact through this agreement, which proves that through co-engineering and collaboration with our suppliers, we can reduce our value chain emissions,” adds Jesús Villalba, Velux’s senior director for direct procurement.

Metals, of which steel is the main part and excluding aluminium, account for 5.7% of Velux’s total Scope 3 emissions. The company aims to reduce them by 50% across its entire value chain by 2030.

Todor Kirkov Bulgaria

EU plus UK steel demand is forecast to decline 1.5% on-year in 2024 to 136.6 million tonnes, says worldsteel. 2025 demand should rebound 3.5%, Kallanish notes.

The developed world is projected to experience a 2% decrease in steel demand in 2024, as major steel using economies like the US, Japan, Korea and Germany face significant declines. “However, there is optimism for 2025, with a projected growth of 1.9% in developed world steel demand. This anticipated recovery is driven by the long-awaited upturn in steel demand in the EU, and modest recoveries in the US and Japan,” the report states.

Global manufacturing activity is expected to experience ongoing weakness, with a possible recovery anticipated in 2025, supported by improved conditions in major economies such as the eurozone and Japan. Construction sector activity has continued to be subdued in most major markets throughout 2024, particularly in the EU, which has adversely impacted steel demand. Worldsteel anticipates a recovery in EU construction will commence next year.

The automotive industry continues to be a focal point of the industry and a significant factor impacting European steel demand. The association observes a significant slowdown this year and anticipates only modest growth in global automotive production next year.

“Light vehicle production forecasts are being revised downwards across the board due to mounting concerns over rising inventories and a deceleration in battery electric vehicle (BEV) sales in key markets. This shift marks a stark contrast to the previous year’s robust performance, highlighting the industry’s vulnerability to evolving market dynamics and potential challenges ahead,” worldsteel notes.

The expansion of European renewable energy generation capacity will meanwhile result in a substantial boost to steel demand in the medium term.

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 (see Kallanish passim).

Natalia Capra France

The UK government has launched its new Industrial Strategy, and National Wealth Fund within days of each other, both of which should support the manufacturing base in the country, including steel, Kallanish notes.

The Industrial Strategy, the first in seven years, will focus on the key sectors of advanced manufacturing; clean energy industries, creative industries; defence; digital and technologies; financial services; life sciences; and professional and business services.

A green paper has also been published, with the government asking businesses to help shape the industrial strategy. The consultation is open until 24 November.

A new supply chain taskforce is being established by the government, which will work to assess where supply chains critical to the UK’s economic security and resilience could be vulnerable to disruption.

Gareth Stace, UK Steel director general, says: “UK Steel welcomes the government announcements, which set the wheels in motion for the Industrial Strategy and National Wealth Fund to deliver for the UK and its manufacturing base, including steel and our wider supply chain.”

“This is a government with a clear vision to drive growth and investment in our industries and a strong commitment to our steel sector,” he adds.

“We look forward to engaging with the government in helping to shape its ambitious Steel Strategy – one that transforms our sector to a fully decarbonised, innovative and competitive industry, that underpins a strong, resilient UK economy and supports well-paid jobs across the country,” Stace concludes.

The UK Infrastructure Bank is to be reconstituted as the National Wealth Fund (NWF) following a policy paper published on 14 October. The NWF will have a broader mandate, extending beyond infrastructure to support delivery of the new industrial strategy, in areas where there is an undersupply in private finance, it says.

At least £5.8 billion ($7.6 billion) of the NWF’s capital will focus on sectors announced in the manifesto: green hydrogen, carbon capture, ports, gigafactories and green steel.

In July, the government said it would spend £2.5 billion on the country’s steel sector.

Carrie Bone UK

Steel demand in Germany will no longer see a recovery this year, contrary to forecasts in spring, according to national steel federation WV Stahl.

The federation had predicted in April a slight growth in demand this year, but has had to deviate considerably from that forecast. It now expects a year-on-year drop of 7%, followed by a 6% rebound in 2025. This compares to the 0.9% drop forecast for global demand in 2024.

“There is no sustained recovery in sight for 2025,” says WV Stahl director Martin Theuringer, who is also worldsteel’s economics committee chairman. “The further decline of the market volume to only 26 million tonnes is an absolute low point, which undercuts even the level of the financial crisis by 10%,” he laments in a note seen by Kallanish.

Virtually all the main steel using industries are stuck. Activity will not fully return to a healthy pace in 2025, but will see only a “technical counter-movement” to recover the losses of the preceding year, he says.

Since 2017, Germany’s steel market has lost 35% of its volume, which is more than twice seen in the entire EU, while it has since gone up in other regions, Theuringer reiterates. In terms of output of crude steel, the most recent months did see a slight year-on-year increase, but this is mainly owing to the base effect of particularly low production around mid-year 2023.

Germany, Europe’s long-time industrial engine room, urgently needs political measures to stop this downtrend, Theuringer warns.

Christian Koehl Germany

Fastmarkets calculated its daily steel hot-rolled coil index domestic, exw Northern Europe at €554.38 ($605.13) per tonne on Tuesday, up by €5 per tonne from €549.38 the previous day.

The index was up by €9.00 per tonne week on week, but down by €11.87 per tonne month on month.

Mills in Northern Europe were heard offering HRC at €580-600 per tonne ex-works.

Buyers’ estimates for workable prices were reported closer to €540-550 per tonne ex-works, however.

Some deals were reported at €550 per tonne ex-works, industry sources told Fastmarkets.

“Trading activity has improved recently on some restocking. Significant volumes were booked these days. Some producers have sold out their volumes for [the fourth quarter],” a buyer source told Fastmarkets.

A second buyer source told Fastmarkets that some mills in Northern Europe were already selling January-delivery material.

Producers in the region were bullish, insisting on receiving the targeted offer prices, according to this source.

“[Producers] have undertaken the ‘take it or leave it’ approach with buyers,” the source said, adding that some buyers were ready to pay the requested prices.

But buyers remained very cautious, carefully estimating the HRC volumes they would like to book, the second buyer said.

Meanwhile, in Southern Europe, Fastmarkets’ daily steel hot-rolled coil index domestic, exw Italy was calculated at €548.75 per tonne on Tuesday, up by €3.75 per tonne from €545.00 per tonne the previous day.

The Italian index was up by €8.75 per tonne week on week, but down by €21.25 per tonne month on month.

Sources reported an offer from one local supplier at €580 per tonne ex-works, which is €10 per tonne higher compared to offers heard the previous week.

Discounts of €15-20 per tonne were possible for big volumes, sources told Fastmarkets.

Lead times for Italian HRC were reported to be shorter compared with Northern Europe. “The negotiations for December-delivery material have not started yet,” a third buyer said.

Buyers estimated tradable prices to be no more than €540-555 per tonne ex-works.

“The market in Italy remains quiet. Buyers are very cautious, just replenishing their stocks,” a fourth buyer told Fastmarkets.

Asian-origin HRC was heard offered to Italy at €550-560 per tonne CFR. Turkish material was offered to Italy at €580 per tonne CFR, including the anti-dumping duty, Fastmarkets understands.

The fourth buyer added that uncompetitive import offers, combined with mills’ intention to cover their production costs by offering HRC at a higher price, might result in increased HRC prices in the medium term.

Domestic European hot-rolled coil prices remained largely stable on Oct. 15, as the import market weakened due to the spread between domestic Europe mill prices and import prices narrowing.

As a result, “the import market is dead,” a Germany-based mill source said.

Demand in the European market remained low potentially prompting “suppliers to cut production in the next few weeks”, according to the Germany-based mill source. In order to maintain current domestic European offer levels, “demand must increase, or production must fall.”

The situation in the market remained the same despite European mills raising prices in response to the Chinese stimulus package, according to a Germany-based service center source. “Reductions in European mill inventories and production capacities have not been sufficient to compensate for the reduction in the demand for European flat steel products.” The European market is in a situation where “consumption has reduced more than production capacities,” resulting in oversupply putting pressure on price stability.

Platts assessed Northwest European HRC at Eur550/mt ex-works Ruhr on Oct. 15, up Eur5 on the day.

Offers were reported at Eur590-600/mt EXW Ruhr. Tradable values were reported at Eur550-570/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, import market activity remained low. The gap between import prices and domestic European mill offer levels has decreased, reducing demand for imports.

Platts assessed imported HRC in Northwest Europe at Eur530/mt CIF Antwerp, stable on the day.

Platts assessed imported HRC in Southern Europe at Eur535/mt CIF Italy, stable on the day.

Anais Dolan | Devbrat Saha