ING reduces automotive outlook, 2025 rebound requires policy
Global car production will decline by a low single-digit percentage in 2024, compared to the flat-to-slightly-positive growth anticipated earlier this year, ING Bank says in a note sent to Kallanish. Output will slow in the second half-year amid high inventories in the US and a slowdown in electric vehicle (EV) adoption in Europe.
The second-quarter results season was mixed for the auto sector, with multiple revisions of initial full-year targets.
Vehicle electrification has slowed in Europe and the US due to saturation in the early adoption buyers category, lack of infrastructure, the ending of government incentives for consumers in Germany, and prices remaining elevated for electric vehicles against more constrained customer buying power.
Hybrid cars have been enjoying something of a renaissance this year, with several manufacturers introducing new plug-in hybrid electric vehicles (PHEVs) in reponse to consumer preferences.
The forecast for global car sales has been revised down to 1.8% growth in 2024 following the end of the buoyant post-Covid phase, with elevated, although declining, interest rates and political and policy uncertainties clouding the outlook. Furthermore, used cars have become more attractive again after prices started to drop following better stock positions.
“We expect a stabilisation in the global auto market volume next year [2025], with some positive aspects more likely than a sharp negative downturn; the expected lower interest rate backdrop in the United States and Europe should provide a tailwind for consumer sentiment,” ING notes.
“Auto markets in key geographies may have to rely on some policy support in order for constructive scenarios for the year to materialise. Such policy measures could potentially include new EV subsidies in Europe, including Germany, tailwinds from the economic stimulus measures in China or some supportive measures after the US elections,” the bank continues.
Higher tariffs on Chinese electric vehicles meanwhile will not stop Chinese brands from making inroads in Europe. They will simply speed up initiatives to produce more locally.
“The higher barriers provide time and some room to manoeuvre for carmakers but won’t change the direction of travel and will likely delay the downward trend in EV prices for consumers. In 2024 around 25% of the EVs sold in the EU are built in China. This includes the majority of Western brands, such as Tesla (+7.8% tariff increase), Volvo (18.8% tariff increase) and BMW (20.7% tariff increase),” ING concludes.
Adam Smith Poland
Manufacturing hampers EU growth, US outlook improves: IMF
The IMF has revised down by 0.1% percentage points its forecast for eurozone 2024 economic growth to 0.8% amid persistent manufacturing weakness in countries such as Germany and Italy. However, the US forecast has been revised up 0.2pp to 2.8% amid stronger consumption and non-residential investment, Kallanish notes.
Global growth is projected at 3.2% in 2024, unchanged from the previous outlook.
Whereas Italy’s domestic demand is expected to benefit from the EU-financed National Recovery and Resilience Plan, Germany is experiencing strain from fiscal consolidation and a sharp decline in real estate prices, the institute says in its October World Economic Outlook update.
In 2025, eurozone growth is projected to accelerate to 1.2%, helped by stronger domestic demand. Rising real wages are expected to boost consumption, and a gradual loosening of monetary policy is expected to support investment, IMF notes.
The resilience of US consumption is largely the result of robust increases in real wages – especially among lower-income households – and wealth effects, IMF says. US growth is anticipated to slow to 2.2% in 2025 as fiscal policy is gradually tightened and a cooling labour market slows consumption.
Japan’s growth outlook for 2024 has been revised down 0.4pp to 0.3%, reflecting a temporary supply disruption in the car industry. However, the UK’s growth has been revised up 0.4pp to 1.1%, and is expected to accelerate to 1.5% in 2025 as falling inflation and interest rates stimulate domestic demand.
The IMF points out that relative to pre-pandemic trends, goods prices remain elevated compared with those for services, a lingering effect of the pandemic and its aftermath, which saw strong demand for goods alongside supply constraints. “Consequently, behind stable growth figures, a global shift from goods to services consumption is underway. This rebalancing is tending to boost activity in the services sector in advanced and emerging markets but is dampening manufacturing,” it notes.
“Manufacturing production is also increasingly shifting toward emerging market economies – in particular, China and India – as advanced economies lose competitiveness,” it concludes.
Adam Smith Poland
SSAB, Parmaco partner for fossil-free steel building
Swedish steelmaker SSAB and Parmaco have agreed to construct the world’s first concept building made of fossil-free steel in 2025, Kallanish learns.
Parmaco intends to use pilot deliveries of SSAB’s fossil-free steel, developed with Hybrit technology, throughout the entire structure, which the companies say is the first building using the material for all its steel components.
Construction is expected to start in early 2025, with completion later the same year.
“Our collaboration with Parmaco represents an exciting opportunity to showcase the potential of fossil-free steel in the construction industry,” says Olavi Huhtala, head of SSAB Europe.
“With the Hybrit technology, we remove one of the key problems with traditional steelmaking by largely eliminating fossil carbon emissions from the production process. Together with partners like Parmaco, we can reduce the climate impact from building material and show what is possible already now,” he adds.
“At Parmaco, we are committed to pushing the boundaries of sustainable construction,” says Parmaco chief executive Jukka Joutsenkoski. “We have the technology ready and soon we will have the right material. The use of SSAB’s fossil-free steel in our Fixcel technology is a natural progression in our mission to create environmentally responsible buildings that do not compromise on quality or durability.”
Parmaco’s Fixcel product is a steel cell that forms the frame of the building and has advantageous properties that support indoor air quality and low energy consumption, the firm notes.
Hybrit, developed by SSAB in partnership with LKAB and Vattenfall, replaces traditional coal with hydrogen and fossil-free electricity in the iron ore reduction process.
Carrie Bone UK
Blastr, Knauf Interfer agree low-emission steel supply
Blastr Green Steel has entered into a memorandum of understanding with European metal processing company Knauf Interfer, for the annual supply of 100,000 tonnes of ultra-low CO2 steel, Kallanish learns.
The collaboration aims to materially increase the supply of decarbonised steel products in Europe.
Blastr is to create a low-emission steel value chain with over 90% lower carbon emissions by using hydrogen and clean energy at its planned steel plant in Inkoo, Finland. It will produce 2.5 million tonnes/year of ultra-low CO2 steel, as well as green iron ore pellet at a plant in the UK to meet growing European demand for sustainable and environmentally friendly industrial solutions, it says.
“The collaboration between Blastr and Knauf Interfer is an important step towards demonstrating Blastr’s business model founded on strong industrial partnerships and our customer-centric approach to meet rapidly growing demand,” says Blastr chief executive Mark Bula. “Together, we will create a more efficient green steel value chain which delivers tangible climate change mitigation combined with a resilient regional supply chain.”
The two companies will leverage Knauf Interfer’s production and supply chain management platform, centred around its trimodal hub in Duisburg, Germany. Its location at Europe’s largest inland port will serve as an important hub with streamlined logistics, ensuring the most economical and sustainable delivery to Central European customers, the firms note.
Domenico Marino, chief operating officer of Knauf Interfer, says: “We are excited to partner with Blastr for a greener future. This collaboration is a major step towards meeting increased demand for green steel through sustainable solutions across the supply chain and reflects Knauf Interfer’s strong commitment to progressing the energy transition.”
Carrie Bone UK
Polish rebar intake surges from Germany
Poland has seen a significant increase in rebar imports this year, with supply from neighbouring Germany driving the surge, Kallanish notes.
Polish intake of rebar from Germany in January-July surged 151% on-year to 225,983 tonnes, far outpacing the 88% growth in overall rebar imports to 343,390t, according to Eurostat data. This represents a monthly average for German-origin rebar imports of 32,283t this year, versus 19,629t in full-year 2023 and 9,969t in 2022.
CMC, which owns a long steelworks in Poland, said last week that although Polish demand has improved and regional mills shown supply discipline, this has been offset by increased import flows from neighbouring countries. CMC Poland’s rebar sales dropped 35% on-year in its August fiscal quarter.
As rebar sales in Germany have deteriorated this year along with the nation’s ailing construction industry, some German mills have been increasing their sales activity in Poland, whose market has better prospects.
Although Polish construction has also been sluggish this year, EU-funded National Recovery Fund (KPO) projects are set to spur construction sector investment in Poland from 2025. However, the shortage of qualified constriction workers could hamper the progress of these investments.
Polish seven-month imports of HS 7213 code products from Germany meanwhile surged 99% on-year to 120,209t, while intake of HS 7216 products rose 46% to 113,537t.
Adam Smith Poland
Voestalpine sells Buderus Edelstahl to Mutares
Voestalpine has concluded negotiations for the sale of its German Buderus Edelstahl subsidiary to Mutares SE & Co. KGaA, a German investment company, the Austrian steelmaker tells Kallanish.
The contract was signed on Tuesday, with the transaction now awaiting approval from competition authorities. The parties have agreed not to disclose the purchase price. The transaction is expected to be concluded by year-end.
The steelmaker announced in March it planned to sell the subsidiary (see Kallanish passim).
The expected financial impact of the sale has already been communicated and is priced into voesatlpine’s earnings forecast for the ongoing 2024/2025 business year – €1.4 billion ($1.5 billion) Ebitda.
Following the sale of Buderus Edelstahl, the High Performance Metals Division of voestalpine is concentrating its product portfolio on the technologically demanding high performance materials segment. “We want simultaneously to reduce our share of standardised tool steel and high-grade engineering steel production, the price of which is coming under increasing pressure due to greater competition from outside Europe,” the steelmaker notes.
“The sale is aimed to strengthening our position in the global marketplace over the long term,” says chief executive Herbert Eibensteiner.
“With the acquisition of Buderus Edelstahl, we are further strengthening our Engineering & Technology segment in the area of steel components and securing our own steel base,” notes Mutares chief investment officer Johannes Laumann. “Buderus Edelstahl will also benefit from our existing product range and broad customer structure in the future, reducing its dependence on individual market risks and positioning itself more broadly for future growth within the Mutares Group.”
Buderus Edelstahl, a company with almost 300 years of history and part of voestalpine AG since 2007, is a leading manufacturer of high-quality standard and special steels primarily used in vehicle manufacturing, plant and mechanical engineering, and construction. In the 2023/2024 business year, the company generated revenue of €362 million and employs 1,130 staff.
Mutares acquires companies in special situations which show significant operational improvement potential and are sold again after undergoing a repositioning and stabilisation process. For the 2024 fiscal year, it forecasts consolidated revenue of €5.7-6.3 billion.
Svetoslav Abrossimov Bulgaria
European CRC, HDG prices largely stable amid limited demand
Demand for domestic cold-rolled coil and hot-dipped galvanized (HDG) coil was still sluggish in Europe, with trading largely quiet, industry sources said.
Mills in Northern Europe were heard offering CRC at €670 ($724) per tonne ex-works.
However, buyers’ estimates for the workable market level were lower, at €650-660 per tonne ex-works.
Fastmarkets’ weekly price assessment for steel cold-rolled coil domestic, exw Northern Europe was €650-670 per tonne on Wednesday, unchanged from October 16.
Import offers of CRC from India to Northern Europe were heard at $660-700 per tonne CFR.
Prices for domestic CRC in the Italian market were also largely unchanged during the assessment week, sources told Fastmarkets.
Suppliers in Italy were heard offering CRC at €660 per tonne ex-works, but according to sources, the workable level was closer to €650 per tonne ex-works.
Fastmarkets’ weekly price assessment for steel cold-rolled coil domestic, exw Southern Europe was €650-660 per tonne on Wednesday, narrowing downward by €10 per tonne from €650-670 per tonne on October 16.
Asia-origin CRC was offered to Italy at €630-650 per tonne CFR.
According to local industry sources, these offers were too close to domestic CRC prices to be workable. Furthermore, Italian buyers’ stock levels were still quite high and there was no significant need to book new material.
Domestic prices for HDG across Europe were also largely unchanged during the assessment week.
Trading in the HDG market remained slow.
In Northern Europe, offers of HDG were heard at €670-690 per tonne ex-works.
Fastmarkets’ sources estimated the workable market level at €650-660 per tonne ex-works.
Fastmarkets’ weekly price assessment for steel hot-dipped galvanized coil domestic, exw Northern Europe was €650-680 per tonne on Wednesday, down by €10 per tonne from €660-690 per tonne on October 16.
Import offers of HDG from India to Northern Europe were heard at $750 per tonne CFR.
Domestic offers of HDG in Italy were heard at €670-680 per tonne ex-works, with buyers estimating the tradeable market price at €660-680 per tonne ex-works.
Fastmarkets’ price assessment for steel hot-dipped galvanized coil domestic, exw Southern Europe was €660-680 per tonne on Wednesday, unchanged from October 16.
Offers of HDG with 1 mm thickness and Z100 coating from Vietnam to Italy were heard at €720 per tonne CFR.
Material with similar characteristics from Taiwan was on offer to Italy at €735-740 per tonne CFR.
European steel HRC prices largely stable, buyers remain cautious
Mills in Northern Europe were hoping for a price rebound in the first quarter of 2025, with their offer prices for this period at €600 ($649) per tonne ex-works, Fastmarkets understands.
Producers were pushing for higher prices to cover rising production costs. They also expected uncompetitive import offers to support the price rebound at the start of next year.
But according to Fastmarkets’ sources, some production cuts might also be necessary to balance the market.
Some mills in Northern Europe were still selling material for November/December delivery at €550-570 per tonne ex-works, Fastmarkets understands.
Buyers’ estimates of the tradeable market price were heard at €540-560 per tonne ex-works.
Fastmarkets calculated its daily steel HRC index, domestic, exw Northern Europe, at €550.00 ($594.68) per tonne on Wednesday, down by €3.75 per tonne from €553.75 per tonne the previous day.
The index was down by €5.00 per tonne week on week and by €6.00 per tonne month on month.
A buyer source told Fastmarkets that customers were still very cautious, waiting to see which direction prices would go.
“Customers do not want to commit to any particular price or volume for now,” the source said.
“There was a short pick-up in trading for a week-and-a-half, but now the market is quiet again,” a second buyer source told Fastmarkets.
In Southern Europe, Fastmarkets calculated its daily steel HRC index, domestic, exw Italy, at €548.38 per tonne on Wednesday, up by just €0.25 per tonne from €548.13 per tonne on Tuesday.
The Italian index was, however, down by €3.29 per tonne week on week and by €7.87 per tonne month on month.
Suppliers in Italy were offering December/January-delivery HRC at €580 per tonne delivered, which would net back to €570 per tonne ex-works, with possible discounts of no more than €10 per tonne, Fastmarkets understands.
But demand from end-user customers remained very weak.
“There have been very, very few transactions recently. There are almost no requests for material,” a third buyer source told Fastmarkets.
Buyer estimates of the workable market were heard at €540-550 per tonne ex-works. Some transactions were reported at €540 per tonne ex-works.
Asia-origin HRC was on offer to Italy at €560-570 per tonne CFR.
Turkey was heard offering HRC to Italy at €580-590 per tonne CFR, including anti-dumping duty.
According to buyers, however, these prices were too high. Taking into consideration the trade risks, import offers of HRC remained uncompetitive, sources told Fastmarkets.
Buyer estimates of the workable price for imported HRC were heard at €530 per tonne CFR.
But this price was far from the targeted offer prices and no deals were reported in the market.
Global steel production falls 4.7% year over year in Sep: worldsteel
Global crude steel production totaled 143.6 million mt in September, dropping 4.7% year over year and 0.7% from August, according to World Steel Association data published Oct. 22.
This brought total production for the first nine months of 2024 to 1.4 billion mt, down 1.9% year over year.
China produced 77.1 million mt in September, falling 6.1% from a year earlier and down 1.1% from August, making up 53.7% of total global crude steel output.
This brought China’s January-September volume to 768.5 million mt, down 3.6% year over year.
The world’s second-largest steel producer India saw production edge 0.2% lower year over year in September to 11.7 million mt, which was also down 4.6% month over month, the data showed.
India’s cumulative January-September output rose 5.8% to 110.3 million mt, according to worldsteel.
Japan’s September production was 6.6 million mt, down 5.8% year over year and 3.6% from August, with January-September output down 3.2% year over year at 63.3 million mt.
US output in September was 6.7 million mt, up 1.2% year over year and down 4.1% month over month, taking January-September production to 60.3 million mt, down 1.6% from the previous year.
Russia was estimated to have produced 5.6 million mt in September, down 10.3% year over year and 2.8% from August, bringing its estimated January-September output to 54 million mt, a decline of 5.5% from the previous year.
South Korea produced 5.5 million mt of crude steel in September, up 1.3% year over year and steady from August, with the nine-month volume down 4.6% from the prior year at 48.1 million mt.
Europe Jan-Sep output up 0.3%
For the European Union, crude steel production rose 0.3% year over year and 14.5% month over month to 10.5 million mt in September, the data showed.
The EU’s January-September volume was 97.8 million mt, climbing 1.5% year over year.
Germany, the largest steel producer in Europe, saw its crude steel production rise 4.3% year over year to 3 million mt, which was also 3.9% higher from August.
In January-September, Germany produced 28.4 million mt of crude steel, up 4% year over 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 Oct. 21, down 20% since the start of 2024.
Turkey produced 3.1 million mt in September, rising 6.5% year over year but falling 1.8% month over month, according to the data. Turkey’s nine-month production was up 13.8% year over year at 27.9 million mt.
Of the top 10 producers, Brazil saw the largest gains in September, with production rising 9.9% year over year to 2.8 million mt, but falling 4.1% from August. Brazil’s January-September estimated production rose 4.4% year over year to 25.2 million mt.
Iran’s estimated monthly output was 1.5 million mt, falling 41.2% year over year but rising 9.65% from the previous month. Its output for the nine-month period fell 3.1% to 21.3 million mt.
Crude steel data covers the 71 countries that report to worldsteel, accounting for about 98% of the world’s crude steel production.
September production of pig iron from 37 countries was 99.8 million mt, falling 5.7% year over year and 3.21% from August, the data showed, while direct reduced iron produced worldwide from 13 countries amounted to 10.2 million mt, down 2.4% year over year and 1.2% lower from the previous month, the data showed.
Pig iron output over January-September totaled 954.5 million mt, down 3.3% year over year, while DRI production for the period rose 4.2% year over year to 92.3 million mt.
Weak import demand supports EU HRC price stability
Domestic European hot-rolled coil prices remained largely stable Oct. 22, as ongoing safeguard investigations contributed to weak import demand and full quotas translated into higher prices on the import market.
The spread between import and domestic prices continued to narrow, making imports increasingly unattractive.
Low real demand in the European flat steel spot market was an important factor in maintaining largely stable prices in the medium term, said an Italy-based trader source. The source added that due to safeguard investigations and quotas on custom-cleared material, many market participants bought material before the first October deadline. As such, market participant restocking requirements have been low.
Platts assessed Northwest European HRC at Eur555/mt ex-works Ruhr Oct. 22, stable on the day.
Offers were reported at Eur560-580/mt ex-works Ruhr.
Platts assessed domestic HRC in Southern Europe at Eur540/mt EXW Italy, down Eur5 on the day.
Tradable values were reported Oct. 22 at Eur540/mt, delivered Italy.
A Germany-based mill source said the import market was “a bit of a question mark.” Antidumping investigations and quotas have made the import market seem a riskier option for buyers compared with the domestic European market.
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.