European HRC prices stable amid limited activity
Most Northern European consumers refrained from buying finished steel on Monday, in anticipation of greater clarity on the direction of HRC prices after the EuroBLECH international sheet metal exhibition, taking place in Hanover, Germany on October 22-25.
Some sources told Fastmarkets they expect HRC prices to stabilize during the event and that an uptrend would be seen after the fair.
But some buyers were more skeptical and predicted that prices might even fall after the fair due to the persistently slow demand in the region.
At the beginning of October, ArcelorMittal announced a €40 ($43) per tonne increase to its European offer prices for HRC – a move that was later followed by other European steel producers.
In Northern Europe, HRC was on offer at €580-590 per tonne ex-works, sources said, with offers for the first-quarter of 2025 of up to €600 per tonne ex-works.
Some mills in the region, meanwhile, were still struggling to sell November-delivery material and sources said that some offers from before ArcelorMittal’s price hikes were also still available.
Fastmarkets heard some deals reported at €530-550 per tonne ex-works.
Buyers, meanwhile, estimated the workable price for November/December-delivery HRC in Northern Europe at €540-560 per tonne ex-works.
Fastmarkets calculated its daily steel HRC index, domestic, exw Northern Europe, at €553.13 per tonne on Monday, unchanged from October 18.
The index was up by €3.75 per tonne week on week, but down by €3.33 per tonne month on month.
In Southern Europe, Fastmarkets’ daily steel HRC index, domestic, exw Italy, was calculated at €551.25 per tonne on Monday, also unchanged from Friday.
The Italian index was up by €6.25 per tonne week on week, but down by €6.25 per tonne month on month.
One local supplier was heard offering HRC at €580 per tonne delivered, which would net back to €570 per tonne ex-works.
According to a buyer source, a discount of €15-20 per tonne from that price was possible.
Others told Fastmarkets that while the supplier was not leaving much room for negotiations and was insisting on the advertized price, buyers estimated the workable level at €540-555 per tonne ex-works.
Import offers remained uncompetitive compared with local prices, meanwhile, and Fastmarkets understands that most consumers currently prefer to buy material from the domestic market.
Artrom Steel Tubes modernizes furnace to reduce energy consumption
Romanian pipemaker Artrom Steel Tubes has successfully modernized its rotary hearth furnace to reduce energy consumption and emissions.
The upgraded furnace uses advanced burner technology to lower natural gas and CO2 emissions by 45%.
This project is part of the company’s broader initiative to become more sustainable and competitive in the market for seamless steel pipes.
Slow Italian longs consumption prompts stoppages in November
September presented significant challenges for long product sales in Italy while insights from sellers and buyers indicate that October is unlikely to show any improvement, sources tell Kallanish.
Prices appear stable on a month-to-month basis, with minor fluctuations of €10/tonne ($10.84/t).
The Italian merchant bar sector is currently experiencing major difficulties due to sluggish order volumes. Prices remain largely stable as the primary producers have successfully maintained their position against falling bids.
Extended production reductions in the segment are anticipated in November to align demand with supply. Some producers are stopping for three weeks while other longs mills will take advantage of the 1 November public holiday to cut production for 1-2 weeks and implement temporary layoffs.
“There is no work downstream,” an agent comments. “Customers are not even in a wating mood. They just call us when they need material and do not even negotiate prices. They buy what is necessary for the next two weeks to match their low orders”.
The market outlook suggests that difficulties will persist through year end, with sources expressing scepticism regarding the potential for price increases in this weak environment.
“In September and October, the market seems frozen; we have been suffering on merchant bar but have gathered a few more orders for sections,” another agent says.
The better demand for sections is attributed to the current low availability as the main producer is said to be late with deliveries, according to sources. Beams supply is forecast to remain extremely limited. According to sources, prices for the first category are at around €800/t delivered. The current range for domestic merchant bar is at €280-290/t delivered or €700-710/t delivered, including size extras.
ArcelorMittal has recently announced it is to increase its prices for long products throughout Europe. The decision was driven by the present unsustainability of prices and the increasing costs of raw materials globally.
According to sources, the steelmaker is increasing prices of all commodity grade longs, including rebar, beams, and drawing quality wire rod, by €40/t.
Natalia Capra France
Consumers want green steel, state aid inevitable: Arnaud Guerendel
Given the vast cost involved, state aid is inevitable for steelmakers to be able to transition to low-emission steelmaking, while the majority of consumers have shown a willingness to pay a premium for green steel, says Vulcan Green Steel vice president of sales Arnaud Guerendel.
“Steelmakers’ limited financial sources make it questionable to transition current carbon emissions to zero, as the capex is $1 billion needed for every million tonne of steel capacity for hydrogen-based DRI and EAF route production transformed from blast furnaces,” Guerendel said during Kallanish Flat Steel 2024 in Istanbul last week. “Government aid is unavoidable.”
Some 30-35% of steel applications will be sustainable in Europe by 2035, equating to 25-35 million tonnes/year of low-CO2-emission flat products demand.
Citing a BCG survey of consumers in a few major countries, Guerendel said 57% of consumers care about net zero carbon emissions and consider this when making their next purchases of food packaging, DIY, household, and other consumer goods. When it comes to buying cars, the willingness of consumers to pay a premium for zero carbon emissions varies between 84% and 88%, depending on the type of engine (combustion engine and EV). For white goods, this willingness is at 94%.
The sensitivity and goodwill of buyers is being exploited, however. A study in Europe found that 42% of green claims were exaggerated, false or misleading, suggesting greenwashing on an industrial scale.
Scrap shortages are meanwhile also inevitable, Guerendel observed. In the best case scenario, the recyclability ratio even for the most advanced circulation system will reach only 30%. Whatever scrap trade restrictions are chosen therefore, these will not prevent a shortage.
Demand for green direct reduced iron will therefore be the primary beneficiary. DRI’s share of total metallics demand is projected to rise from the current 6% to 13% by 2050, with production expected to grow nearly five times faster than total metallics demand, reaching 320mt.
It is anticipated that by 2050, almost half of all DRI produced will be hydrogen-based. As new processing hubs emerge, it is expected that by 2050, approximately 25% of DRI supply will be traded, compared with just 7% at present. DRI exports from the Middle East are expected to reach 35-40mt, Guerendel concluded.
Burak Odabasi Turkey
Market unlikely to recover before H2 2025
Panelists at Kallanish Flat Steel 2024 in Istanbul expressed mostly a bearish outlook for the market until at least the second half of next year.
Tayfun İşeri, chairman of Turkey’s Flat Steel Product Exporters, Importers and Manufacturers Association (YİSAD), emphasised he is an optimist but is pessimistic about the market outlook for the first time.
The steel industry has been “hectic” for the past two years, he noted at last week’s event. Global trade has regionalised and the WTO has lost its respect. The Russia-Ukraine war, the Turkey earthquake and the Palestine-Israel conflict, as well as high interest rates and inflation have impacted steel demand and will continue to do so. Chinese exports, which will exceed 100 million tonnes before the end of 2024, pose a threat to steel prices and production in 2025, İşeri noted.
Selçuk Yılmaz, speaking at his first conference since becoming Yıldız Demir Çelik general manager last month, said Turkey’s imposition of a 6.1-43.31% dumping duty on HRC imports from India, China, Japan and Russia has already impacted domestic HRC pricing. Next year, there may be an anti dumping investigation into galvanizing, cold rolled and pre-painted steel imports in Turkey, he added. Operating profits are decreasing amid high energy costs, while production capacities are rising.
Kallanish Asia editor Tomas Gutierrez stated that Chinese steel demand will fall consistently in the foreseeable future, meaning China will need to export its surplus. Noting that overall fundamentals are weak and the recently announced stimulus packages are insufficient to support the steel industry, Gutierrez pointed out that economic confidence is required to trigger a demand recovery.
Stemcor managing director Dick Sands said construction has been hit by high interest rates, while global sentiment is very negative today. “The only thing that can move mountains is sentiment. We need positive sentiment,” he affirmed. Although wars are having a negative impact on steel demand at present, once they end, this will boost demand.
Trade cases are likely to increase on Chinese material, Sands continued, adding that he is no longer confident China can manage its economy.
GMK Center chief executive Stanislav Zinchenko stated that although he expected 1.4% annual growth next year, which would be good for the European economy, European steel demand is unlikely to improve in the next six months. The market is currently at the bottom of the demand cycle, with demand to return by 2026-2028.
The Indian market has been stagnant for almost a year. “We failed to see the expected infrastructure investment projects after the [Indian] election. The biggest challenge for India is exports which decreased by 50% in the nine months this year, while imports grew 60% … India should decide about protection measures to compensate for export losses and stimulate its local market,” Zinchenko concluded.
EU HRC prices largely stable ahead of Euroblech conference
Market activity remains subdued as most participants are expected to attend the Euroblech steel conference in Hanover, Germany. A Germany-based service center source confirmed that “there will not be much substantial business taking place this week.”
Pessimistic economic forecasts for the German and Austrian economies contributed to ongoing weak real demand in the European steel market. A Germany-based service center source rumored that “some European mills will try to cut production and cut some blast furnaces.” However, this remains to be seen.
Platts assessed Northwest European HRC at Eur555/mt ex-works Ruhr Oct. 21, stable on the day.
An offer was reported at Eur560-570/mt ex-works Ruhr. Tradable values were reported at Eur545-570/mt ex-works Ruhr.
Platts assessed domestic HRC in Southern Europe at Eur545/mt ex-works Italy, stable on the day.
Offers were reported at Eur560-600/mt ex-works Italy.
Platts assessed imported HRC in Northwest Europe at Eur520/mt CIF Antwerp, stable on the day.
Platts assessed imported HRC in Southern Europe at Eur535/mt CIF Italy, stable on the day.
Platts is part of S&P Global Commodity Insights.
Tata Steel signs contract for new EAF at Port Talbot site
The new EAF, expected to become operational at the end of 2027, will have a capacity for 3 million tonnes per year of steel.
By transitioning to the new EAF technology, the Port Talbot site will be able to produce green steel, Tata Steel said. It will reduce its carbon emissions by 90%, which is equivalent to 5 million tonnes of CO2 per year, the company added.
According to the company, the use of scrap in the new EAF will also reduce the UK’s reliance on imported iron ore.
The new EAF will be funded by a joint investment of Tata Steel and the UK government reaching £1.25 billion ($1.62 billion). Tata Steel will provide £750 million of the whole sum, and the investment of the UK government will be up to £500 million.
The grant from the UK government was approved on September 11.
The new EAF is supposed to replace the two blast furnaces (BFs) at the Port Talbot site, which were operational until recently. The two BFs had a capacity for 5 million tpy, but the company did not use the whole of it and explained that the annual output from the two BFs did not exceed 3 million tpy.
BF5 was closed in July this year, and BF4 was closed in September.
The Port Talbot site produced mainly hot-rolled coil and cold-rolled coil.
According to the contract with Tenova, the Port Talbot site will also receive new ladle metallurgy furnaces, which will allow the production of more complex grades required by manufacturers in the UK and other countries.
“Today marks an important milestone in making low-CO2 steelmaking a reality in Port Talbot, as well as reducing the UK’s carbon emissions and supporting our customers with their own carbon reduction targets,” T V Narendran, chief executive officer of Tata Steel, said during the signing of the contract.
“Technology like the furnaces made by Tenova is critical to decarbonizing the industry, unlocking its potential to provide skilled jobs and creating economic stability for future generations of steelworkers in South Wales,” Jonathan Reynolds, UK Business and Trade Secretary, said.
UK steel sector will face increased demand for scrap
Tata Steel’s new EAF will recycle 2 million-2.5 million tonnes of UK-sourced scrap every year — equivalent to about 2.5 million cars or 250 Eiffel Towers, the company said.
Using predominantly UK-produced scrap means that the company would need to buy high-quality scrap grades with lower impurities that are suitable for flat steel production.
The UK is a net scrap exporter, but with new EAF-based steelmaking capacities coming online, it could become an importer of certain grades, sources suggested.
Another UK steel producer, British Steel also plans to switch to EAF by 2025.