Revista InfoAcero Octubre 2024
En el siguiente enlace pueden acceder a la edición de Octubre de UAHE revista INFOACERO
Destacamos a continuación algunos de sus contenidos:
- Opinión – D. Enrique Gimeno- Junta Directiva UAHE
- Siderurgia: El Sector del Acero en España – SOLUNION
- Resumen 20 Fórum de Productos Siderúrgicos, 15 y 16 Octubre
- WorldSteel: Previsión a corto plazo sobre Consumo de Acero- Octubre 24
- Próximos Eventos: Eurometal Steel trade Day, Construtec y Metal Madrid.
EU steel tube output to drop 2% in 2024
Following a milder-than-projected output decline of 1.5% in 2023, the EU steel tube sector is expected to face a more significant drop of 2% on-year in 2024. This will be followed by moderate growth of 0.8% in 2025, according to Eurofer.
The downturn in the tubes and pipes segment reflects a widespread recession affecting all major EU steel-using industries, including construction, mechanical engineering, domestic appliances, metalware, and automotive, Kallanish notes.
In the second quarter, EU steel tube output fell for the second consecutive period, decreasing by 1.6%, after a 4.4% decline in the previous quarter. This downturn has been exacerbated by war-related disruptions and ongoing supply chain issues that began in the second half of 2022. Additionally, the energy crisis that emerged in 2022 and persisted into 2023 has severely impacted investment in the sector, particularly pipeline project developments in the EU.
In the long term, demand for large welded tubes from the oil and gas sector is not expected to improve significantly as the EU shifts toward LNG shipping, reducing reliance on pipeline gas. Global oil demand is unlikely to drive new pipeline projects in the short term due to geopolitical uncertainty and a weak economic outlook, with oil demand in the EU projected to decline throughout 2024. Demand from the construction sector will also ease, contributing modestly to growth, while demand from the automotive and engineering sectors is expected to remain relatively strong, Eurofer says.
EU steel-using sectors faced a notable decline in Q2 output, which fell 2.1% after declining 2.4% in Q1. This has broken a period of resilience seen until the end of 2023, when growth was recorded at 0.9%.
Elina Virchenko UAE
Acciaierie d’Italia enters collaboration to build Taranto DRI facility
Acciaierie d’Italia (ADI) and state company DRI d’Italia have signed a memorandum of understanding that kickstarts a collaboration to build a direct reduced iron plant at the Taranto steelworks, Kallanish learns from the company.
This is regarded as a significant advancement in the steelworks’ decarbonisation.
Whatever company acquires up-for-sale ADI is expected by the special administration managing the steelmaker to complete the DRI project as the sales process progresses. In order to ensure that Taranto has the capacity to provide the requisite infrastructure for the storage and transportation of iron ore and other materials, both ADI and DRI d’Italia have conducted feasibility studies.
The 2.5 million tonne/year plant will be constructed by DRI d’Italia using state funds, while ADI will evaluate the necessary equipment modifications to accommodate the facility, such as enhancing the iron ore storage areas.
“The DRI technique has long been indicated for reducing CO2 emissions in steel production, with less use of coal. This is the reason for the which public financial resources available are huge, around €1 billion [$1.08 billion] for the project, through cohesion funds,” ADI says in a note.
Blast furnace No.1 was restarted in Taranto on 15 October to enable adequate output to ensure the financial resources necessary for the survival of the plant.
ADI aims to register 1.9-2.2 million tonnes of steel output in 2024. Sources, however, believe the steelmaker’s production will fall short of that.
In the first quarter of 2025, BF No.2 is scheduled to be restarted. By the first quarter of 2026, the firm plans to run BFs 1, 2 and 4. The plant is eyeing production of 4.5-5mt in 2025.
Until 15 October, Taranto was operating only BF No.4, while BF No.5 has been inactive for a number of years. BFs 1 and 2 idled production a few months ago (see Kallanish passim).
Natalia Capra France
NLMK Verona to build new EAF by 2027
According to several market sources familiar with the matter, the new equipment will have capacity for 400,000 to 500,000 tonnes per year. It will first of all provide the asset with green steel semi-finished products, which is a crucial consideration because of the carbon-reduction policies of the EU.
The cost of the project was said to be as much as €600 million ($648 million).
A second factor behind the project was that it would help the company to replace import slab volumes, a large portion of which currently comes from the Russian parent company. The EU quota for Russian slab imports, set in response to Russia’s invasion of Ukraine in 2022, will expire in September 2028.
The company did not respond by the time of publication to Fastmarkets’ request for an official comment regarding the details of the project.
NLMK Verona currently has capacity to produce 450,000 tpy of various steel products, among which are forged and rolled plate, forged blocks and ingots.
According to a source close to the company, around 70% of the slab needs at NLMK Verona come from the parent company in Russia. NLMK Verona itself has a furnace able to produce 50,000 tpy of slab, which is used for ingot production. The remaining volume is supplied from Asia and Europe.
The Verona facility is part of the NLMK Europe plate division together with NLMK Clabecq in Belgium and Denmark’s NLMK DanSteel. The company also has NLMK Europe strip units at La Louviere in Belgium and Strasbourg in France.
The key Russian asset in Lipetsk has capacity for 13 million tpy of crude steel and supplies slab for its own use, as well as for other group assets and third parties.
Background
Italian heavy plate production currently relies heavily on imported semi-finished steel products, mainly from Russia and Asia.
In January-July 2024, total slab imports into Italy amounted to 1.07 million tonnes, according to Global Trade Tracker (GTT). Of that amount, deliveries from Russia comprised 416,265 tonnes, 39%. Deliveries from China in the same period amounted to 240,493 tonnes, and from Vietnam 158,768 tonnes.
Starting in 2026, however, when the European Carbon Border Adjustment Mechanism (CBAM) comes into effect, European steel buyers will need to prioritize bookings of steel products with a lower carbon footprint, to cut costs.
The price of CBAM certificates will be calculated by the European Commission on a weekly basis, based on the average price of the closing EU Emissions Trading Scheme (ETS) carbon dioxide (CO2) allowances for each week.
The price of a carbon emissions permit in the EU was €60-67 ($65-72) per tonne in October 2024. And the EU envisages that the free allocation of such permits will be fully eliminated by 2034.
Market participants told Fastmarkets that CO2 allowance prices will jump to €200-250 per tonne when the free allocations are halved in 2030, and that there will be a surge above €400 per tonne by 2034, when free allocations are fully phased out.
Other Italian re-rollers were also looking for opportunities to invest in green steel production. For example, earlier this year, Italy-based re-roller Marcegaglia was cleared to acquire insolvent France-based steelmaker Ascometal, and announced plans to transform the asset into a green steel hub.
European mills push for substantially higher HRC offers for Q1 2025 despite subdued demand
Despite subdued consumption, all major European suppliers were looking to achieve higher prices for January and February, Fastmarkets heard.
“Imports are expensive and too risky to book, considering anti-dumping probes and safeguards. If mills [in Europe] adjust production volumes in November and December, they might get a chance to increase [HRC] prices,” a buyer in Germany said.
Northern European producers were offering January-delivery coil at €600-620 ($648-670) per tonne ex-works and even at €640 per tonne ex-works in some cases, sources said. But these prices have not been accepted in deals so far.
Producers continued to offer discounts only for HRC with delivery in the fourth quarter of 2024, Fastmarkets heard. Notably, transactions for December-delivery HRC were reported at €550-560 per tonne ex-works, while offers for such material were around €570-580 per tonne ex-works.
Fastmarkets calculated its daily steel HRC index, domestic, exw Northern Europe at €555.42 per tonne on Tuesday, up by €5.13 per tonne from €550.29 per tonne on Monday.
The index was down by €1.67 per tonne week on week, but up by €10.21 per tonne month on month.
Sources said that European suppliers were also trying to push spot prices higher ahead of negotiations of long-term contracts with end users for next year.
“Mills are trying to strengthen their position… ahead of signing long-term contracts with automakers,” a buyer source said.
Original equipment manufacturers (OEMs) were asking for discounts of up to €200 per tonne, which is “unacceptable” from suppliers’ point of view.
Long-term contracts with OEMs in the automotive industry for the second half of 2024 were closed at €730-750 per tonne – and even at €700 per tonne in some cases, compared with €800 per tonne in the first half of the year.
In Southern Europe, Fastmarkets calculated its daily steel HRC index, domestic, exw Italy at €548.63 per tonne on Tuesday, up by €1.63 per tonne from €547.00 per tonne on Monday.
The Italian index was up by €0.50 per tonne week on week and up by €6.96 per tonne month on month.
Suppliers in Italy were offering December-delivery HRC at €570-580 per tonne delivered, which would net back to €560-570 per tonne ex-works, Fastmarkets heard.
But for such material, buyer estimates for the tradable market level were still reported at no higher than €540-550 per tonne ex-works.
“Negotiations [for December HRC sales] are still underway; mills’ asking prices are too high,” a buyer in Italy said.
Import prices, meanwhile, remain uncompetitive and no fresh business was completed on Tuesday, sources told Fastmarkets.
In Italy, November-shipment HRC from Turkey was on offer at €580-590 per tonne CFR to Italy, including the anti-dumping duty, while Asian material was on offer at €550-570 per tonne CFR.
Last week, the European Commission started registering all HRC imports from Egypt, India, Japan and Vietnam, paving the way for the potential retroactive application of anti-dumping duties, Fastmarkets reported.
Eurofer gives up on expectations for demand recovery in 2024
According to Eurofer’s latest report, demand is expected to shrink by 1.8% to 127 million tonnes in 2024. This is a downward revision from the previous forecast from end-July of a slight recovery by 1.4%.
At the beginning of the year, Eurofer predicted a recovery of apparent steel consumption in the EU by 5.6%, rising to 137 million tonnes in 2024. Since then, this has been the third time Eurofer has downgraded its forecasts.
“In 2024, due to poor developments in the industrial outlook and decreasing demand from steel-using sectors, particularly construction and automotive, apparent steel consumption is projected to experience another recession, albeit moderate,” Eurofer said, adding that a modest recovery is foreseen in 2025.
According to the association, apparent steel consumption in the EU in 2025 will increase by 3.8% to 132 million tonnes, still below the pre-pandemic volume of 145 million tonnes in 2019.
After a short-lived rebound of apparent steel demand in January-February 2024 related to restocking, activity in the European flat steel market has been deteriorating, with prices under pressure.
For example, in February, Fastmarkets’ steel hot-rolled coil index domestic, exw Northern Europe averaged €738.28 ($797.86) per tonne ex-works.
Since then, the average monthly HRC price has been decreasing gradually, and for September, it reached €567.22 per tonne. Similar levels were last recorded in November 2020, when the index averaged €530.72.
At the beginning of October, European mills tried to push prices up by increasing their offers.
But demand remained weak, and deals continued to be concluded at lower levels.
“Mills’ attempts for price increases were unsuccessful, but at least the HRC prices stopped dropping further,” a buyer source told Fastmarkets.
Industry sources commented that any hopes for a price rebound would be postponed to the first half of 2025. A potential positive impact on the domestic HRC price could be uncompetitive import offers combined with some output cuts in the local market, Fastmarkets understands.
End-user outlook
Automotive
Eurofer said that automotive output in the EU27 had previously increased by 8.3% overall in 2023, despite the overall subdued investment outlook.
“However, output levels have remained low in historical terms, far below the levels seen in 2018 and 2019,” Eurofer added.
The sector was expected to decline by 6.5% in 2024 (revised downward from a 3% decline in a previous outlook) and to increase by just 1.9% in 2025 (revised downward from a 2.3% growth).
According to Eurofer, the reasons for the negative trend were related to the protracted weakness of the manufacturing sector, overall EV standards uncertainty and lackluster consumer confidence.
“Demand is projected to remain weak until the macroeconomic picture and consumer disposable income substantially improve, given the rather unpredictable economic outlook and uncertain economic growth perspectives”, Eurofer said.
But according to the association, demand has shown some resilience against all the uncertainties around the implementation of EVs and preparing the ground for the ban of petrol cars by 2035.
Negotiations between steel mills and original equipment manufacturers (OEMs) in the automotive industry for HRC contracts for the first half of 2025 were still underway, and OEMs would likely seek substantially lower prices for the next year contracts, sources reported.
Notably, several sources told Fastmarkets that for the first half of 2025 contracts, OEMs were asking for discounts up to €200 per tonne, which were “unacceptable” from suppliers’ point of view.
For the second half of 2024, long-term contracts with automotive OEMs were closed at €730-750 per tonne — and even at €700 per tonne in some cases — in contrast with €800 per tonne in the first half of the year.
Construction
The largest steel-using sector — representing 35% of total steel consumption — construction consumption fell by 0.8% in 2023.
For 2024, Eurofer expected that construction activity would continue to decrease, falling by 1.3% rather than the previous prediction of a 1.4% decline.
The sector is expected to grow by 1.3% in 2025 (revised downward from 1.8%).
According to Eurofer, construction output has been under pressure since the third quarter of 2022.
“This is due to several factors, including rising construction material prices, labor shortages in some EU countries and increasing economic uncertainty. Most notably, higher interest rates in 2022 and 2023, driven by monetary policy tightening, have also played a key role,” Eurofer said.
All these factors impacted the sector negatively, especially the private non-residential sub-sector.
Fastmarkets’ price assessment for steel reinforcing bar (rebar), domestic, delivered Northern Europe averaged €635.63 per tonne at the midpoint in September, up slightly by €8.13 per tonne from a monthly average of €627.50 per tonne at the midpoint in August. But the assessment was sharply down from a monthly average of €589.38 per tonne at the midpoint in September 2023.