EU carries over Turkish merchant, HRC quota allocations
The EU has allocated additional volumes for Turkish-origin imports in the fourth quarter, carried over from the previous tariff-rate quota (TRQ) period, Kallanish notes from the EU Customs portal.
The quantities transferred from the preceding quota period include 39,848 tonnes of merchant bar, 18,257t of hot rolled coil, 7,843t of other welded pipe, 7,480t of wire, 1,853t of stainless cold rolled sheet and strip, and 1t of rebar.
As a result, other welded pipe now has 57% or 27,996t of the available Q4 TRQ remaining, compared to only 1% availability at the end of October.
Organic coated sheet, hollow sections, and large welded tube have either exhausted their quotas or are very close to the TRQ limits.
Wire rod has only 6,052t available, or 5% of the TRQ left.
| Product | Quota 01.10 – 31.12.2024 | Transferred | New total | Balance | Awaiting allocation | Available TRQ % |
| HR sheets, strips | 475,174 | 18,257 | 493,431 | 265,481 | 0 | 54 |
| Organic coated sheets | 15,889 | 0 | 0 | 0 | 0 | 0 |
| Stainless CR sheets, strips | 21,057 | 1,853 | 22,910 | 10,805 | 287 | 46 |
| Merchant bars, light sections | 107,140 | 39,848 | 146,988 | 116,483 | 1,379 | 78 |
| Rebars | 95,436 | 1 | 95,437 | 46,443 | 0 | 49 |
| Wire rod | 119,011 | 0 | 0 | 6,052 | 0 | 5 |
| Railway material | 1,574 | 0 | 0 | 1,066 | 6 | 67 |
| Gas pipes | 49,976 | 0 | 0 | 9,852 | 1,322 | 17 |
| Hollow sections | 99,462 | 0 | 0 | 0 | 0 | 0 |
| Large welded tubes | 15,096 | 0 | 0 | 109 | 0 | 1 |
| Other welded pipes | 38,497 | 7,843 | 46,340 | 27,996 | 1,480 | 57 |
| Wire | 51,946 | 7,480 | 59,426 | 36,435 | 1,209 | 59 |
Source: EU TARIC, as of 11 November. Calculated by Kallanish
Elina Virchenko UAE
European steel sector calls for action plan to safeguard industry in face of crisis
Policymakers in Europe need to follow a “steel action plan” to a avert a crisis in steelmaking, the European steel industry association Eurofer said this week.
Ahead of Commissioner-Designate Séjourné’s hearing in the European Parliament, Eurofer and European trade union IndustriAll have developed and published a set of demands for European Commission and the EU member states to consider, aimed at ensuring the EU has “an internationally competitive and climate-neutral steel [sector], with quality jobs in Europe for today and [for] years to come.”
Entitled A European Steel Action Plan, the demands cover seven topics: EU trade policy; the Carbon Border Adjustment Mechanism (CBAM); EU energy policy; green steel markets; investment in transformation; access to critical raw materials; and the EU social policy.
According to the plan: “Ever-increasing steel excess capacities in third countries and unfair trade practices threaten the viability of the European steel sector and hinder further investment in [European] green steel. [And] high energy costs and growing carbon costs have eroded Europe’s industrial competitiveness.”
With steel consumption steadily deteriorating so far in 2024 and with Eurofer downgrading its outlook for the sector several times already this year, in its latest outlook, published on October 29, Eurofer said it expects apparent demand to shrink by 1.8% year on year to 127 million tonnes in 2024 — a significant downward revision from its previous forecast at the end of July, which was for a slight recovery of 1.4%.
At the beginning of 2024, Eurofer predicted that apparent steel consumption in the EU would rise by 5.6%, to 137 million tonnes through the year. The downward revision is the third time Eurofer has downgraded its forecast, with steel prices under pressure for the most of the year.
In October, Fastmarkets’ steel hot-rolled coil index domestic, exw Northern Europe averaged €549.25 ($) per tonne ex-works, sharply down from the average of €616.63 per tonne in October 2023.
In January 2024, monthly average was €731.73 per tonne.
“All recent attempts [by] European mills to increase [HRC] prices [have] stumbled over a lack of demand,” a stockholder in Germany said.
Stronger trade policies
The plan blames the EU steel sector’s woes on “worsening global steel excess capacity” becoming an “existential threat to the sustainability of the European steel industry,” citing figures from the Organization for Economic Co-operation & Development (OECD) which put the excess at “more than 550 million tonnes – four times more than annual EU steel production.”
Sources told Fastmarkets that Europe’s nominal crude steelmaking capacity was well above 200 million tonnes, but said that actual output volumes have been lagging far behind that total in recent years.
In 2023, steel output among the EU’s 27 members fell to 126.30 million tonnes, down from 136.30 million tonnes in 2022 and down from 152.60 million tonnes in 2021, according to data from the World Steel Association (worldsteel).
“This overcapacity is undermining the viability of the EU steel sector in two ways. First, China is massively exporting steel worldwide at prices below the cost of production, which is severely depressing prices. Second, these exports are forcing other regions to divert steel to the EU market,” the Eurofer/IndustriAll plan says.
In the first two quarters of 2024, carbon steel imports to the EU amounted to 13.5 million tonnes. For the whole of 2023, steel imports were 24.8 million tonnes.
Sources said that imports account for up to 30% of EU steel consumption.
To address the issue of imports the Eurofer/IndustriAll plan suggests:
- Enforcing EU Trade Defense Instruments, such as anti-dumping, anti-subsidy and safeguards tools
- Replacing the current steel safeguards, which end in 2026, with a more robust tariffication regime
- Concluding an international agreement for sustainable steel, in line with CBAM and in full compliance with WTO rules
In October 2024, the Commission took the first steps in strengthening trade barriers by implementing registration for all imports of products under anti-dumping or anti-subsidy investigations, including ongoing investigations where provisional determinations have not yet been made.
CBAM in the spotlight
EU’s CBAM, a carbon leakage protection measure, is expected to fully come into force in 2026, but Eurofer and IndustriALL have warned against CBAM circumvention, resource shuffling and delocalization of downstream sectors.
“It is critical that the effectiveness of CBAM is properly monitored and secured within the entire-value-chain, including downstream sectors,” the plan says,
Market participants have brought up the fact that CBAM does not take into account steel exports, thereby compromising European steelmaker competitiveness in global markets.
“Export-oriented companies bear additional carbon costs, which undermines their competitiveness in global markets,” a trading source said.
European steel export volumes have been declining in the past years: from 22.6 million tonnes in 2019 to 15.2 million tonnes in 2023, according to Eurofer data.
The introduction of CBAM could also result in “lost added value” for the European manufacturing industry, sources said, and importers might start avoiding importing goods covered by CBAM and instead buy “items with higher customs classification” instead of semi-finished products.
The European Commission is investigating the potential extension of CBAM to products downstream of the goods subject to the current regulations, such as iron and steel, but a final decision has yet to be made.
Green transformation requires support
To comply with the European Union’s ambitious target to become a net zero-emitter by 2050, the steelmaking industry needs to transform quickly. but it will need support, according to the Eurofer/IndustriAll plan.
“The financial needs until 2030 are estimated today at around €30 billion for capital expenditure (Capex) and €55 billion for operating expenditures (Opex), totalling more than €85 billion,” the plan says.
In the report, Eurofer and IndustriAll stress the fact that stimulus packages at member state level and at EU level are essential to support developments in steelmaking, including creating and promoting the key markets that will drive demand for green steel made in Europe.
“The demand for Low-CO2 steel should be stimulated through public procurement and in public auctions… A well-recognized labelling system for green steel should be developed by the industry and stakeholders, to be used as a benchmark and reference,” the plan says.
Notably, the plan calls for:
- An EU labelling system for green steel
- A review of relevant EU legislation to promote green steel made in the EU in public procurement and public auctions
- The introduction of incentives to use green steel in key downstream sectors, such as automotive and construction.
That echoes the key concerns of the industry regarding the green steel transition.
Market participants said there was a lack of projects across Europe requiring green steel and that demand from the key consumer – the automotive industry – has recently been slowing, in line with the general downturn in steel sales.
“Our customers say they love green steel, but they can’t pay more because they are fighting for their survival,” a distributor in Germany said.
“We can’t reverse the decarbonization and reduced-CO2 steel is coming – it’s just the matter of time. But in a recession, it just becomes a secondary [issue] for a buyer,” the distributor added.
And a buyer in Germany said: “For infrastructure projects – publicly funded [projects] in particular – it is possible for mills to sell green steel at higher premiums. But the spot market is just not there yet. There is no willingness [among buyers] to pay a premium.”
Major flat steel suppliers are already offering their own green steel brands with lower-carbon footprints – including XCarb, Arvzero, SSAB Zero, Bluemint, Greentec — but there is currently no common standard for the industry.
“We need a coordinated approach from the entire sector – a simple approach that is applicable to all members,” a trading source in Switzerland said.
Fastmarkets’ methodology defines European green steel as “steel produced with Scope 1,2 & 3 emissions at a maximum of 0.8 tonne CO2 per tonne of steel.” And Fastmarkets’ weekly assessment of the green steel domestic, flat-rolled, differential to HRC index, exw Northern Europe was €100-200 per tonne on November 7, stable week on week.
Clean, affordable energy to power the transition
“The EU steel industry is at a competitive disadvantage to other producing regions with regard to energy costs,” the Eurofer/IndustriAll plan says.
The energy-intensive nature of steel production leads to high electricity consumption, and these costs can represent as much as 180% of steel producers’ gross value added (GVA) in the UK. With the switch to electric-arc furnaces (EAFs), it would be expected that the sector’s electricity consumption would roughly double, industry body UK Steel said.
Currently, EU steelmaking is mainly blast furnace-basic oxygen furnace (BF-BOF) production, which is less energy-intensive than using the EAF-route, and electricity costs account for less than 4% of the costs in the BF-BOF production route. For EAF mills, electricity can be around 20% of the total.
According to worldsteel, about 89% of a BF-BOF’s energy input comes from coal, 7% from electricity, 3% from natural gas and 1% from other gases and sources. In EAF steelmaking, the energy input from coal accounts for 11%, electricity 50%, natural gas 38% and 1% from other sources.
New green steel capacities in Europe will be mostly represented by EAFs and direct-reduced iron (DRI) modules, with more than 50 million tonnes of new steelmaking capacity expected to come online in 2025-2027, according to Fastmarkets estimates.
And the issue of developing green hydrogen to power new DRI modules is already a key topic of conversation among European steelmakers.
Using hydrogen with existing DRI modules in Europe is currently quite expensive, Fastmarkets understands, with hydrogen prices currently around €5-8 per kg. And it needs to be closer to “€2.5-3.0 per kg to be commercially viable for steelmaking,” a steel producer in Northern Europe said.
To produce 1 tonne of liquid metal in a DRI module, around 60 kg of hydrogen is required, according to industry estimates.
“Europe needs to build out its production of fossil-free electricity. However, the volumes needed for large-scale electrolysis to produce the green hydrogen are significant. Therefore, it makes sense to place the most energy-intensive operations close to where the electricity is available [so it] can be built out,” a steel mill source in Europe said.
And the Eurofer/IndustriAll plan says: “Hydrogen has a key role to play, and we are concerned that the policy framework governing hydrogen adopted so far will not deliver affordable hydrogen at scale [the steel] industry needs. Urgent measures are needed to reduce energy costs [if] the green transition is to become a reality.”
But, according to market participant estimates, around 140,000 tonnes of hydrogen per year would be required to fuel one 2 million tpy DRI module.
Import share of plate market in Poland was 90% in 2023
Local production fell by 52% in 2013-2023
The plate market in Poland is quite stable with an average volume over the last 10 years of 1.06 million tons, which is similar to 2023 numbers. The plate market accounts for 8% of total steel consumption in Poland.
Domestic plate production in Poland is stagnating, having fallen by 52% in 2013-2023. There are three local producers with a total capacity of 1.26 million tons. But the largest, Huta Czestochowa with a capacity of 1 million tons, is going through bankruptcy and has stopped operations in 2023.
The Polish plate market is supplied by imports. Import`s share on the market in 2023 was 90%, raising from 59% in 2013. The main suppliers of plate to Poland are Italy (16%), the Czech Republic (15%), Germany (15%), Denmark (11%), Finland (8%).
Read more about the plate market in Poland in the GMK Center article “Attempt number three or how Poland can increase the production of flats”.
UK steelmaker British Steel keeps Scunthorpe blast furnaces running into new year
British Steel will keep the blast furnaces at its Scunthorpe site in north Lincolnshire running until the new year, a company spokesperson told S&P Global Commodity Insights Nov. 13.
“As part of our commitment to securing a sustainable future for British Steel in Scunthorpe, we recently purchased raw materials that will see our operations continue to run into the new year and are working to restore production levels from our blast furnaces,” the spokesperson said. “At the same time, we remain in active discussions with Government, working together to ensure British Steel continues to play a vital role in meeting the UK’s infrastructure needs.”
The only remaining UK blast furnace steel plant in operation, it is still in talks with the government about a timeline to transition its electric arc furnace production, the spokesperson said.
Tata Steel UK, once the largest UK steelmaker, permanently ceased production on the last of its four blast furnaces at Port Talbot in Wales on Sept. 30, marking the end of more than 100 years of blast furnace steelmaking at the site.
British Steel pledged a GBP1.25 billion ($1.55 billion) decarbonization plan under which it proposes to install two EAFs — one at its headquarters in Scunthorpe and the other at its manufacturing site in Teesside.
The new furnaces at Scunthorpe are slated to become operational by late 2025, replacing the 3 million mt/year blast furnaces responsible for the vast majority of the company’s CO2 emissions. That timelime has been put into question after a media report that the project would not get the required power grid connections until 2032.
At the end of October the company started a trial using technology to capture carbon emissions from the Scunthorpe plant, installing a mobile carbon capture pilot plant developed by the University of Sheffield at the sites central power station to extract carbon from the station’s boiler flue.
Platts, part of Commodity Insights, assessed Steel Hot Rolled Coil UK at GBP520/mt DDP West Midlands, up by £5/mt week on week.
Platts assessed UK HRC at GBP520/mt basis DDP West Midlands Nov. 7, up GBP5/mt week over week.
EBRD plans Turkey steel support amid CBAM costs
The European Bank for Reconstruction and Development (EBRD) aims to support an increase in the competitiveness of Turkish industries, including steel, as they are hit by costs stemming from the EU’s Carbon Border Adjustment Mechanism (CBAM), Kallanish notes.
Turkey’s steel sector, being energy-intensive, is expected to face significant pressures from CBAM, which could result in additional costs for Turkish producers in the coming years, EBRD says.
“The projected costs of the EU’s Border Carbon Adjustment Mechanism (CBAM) for Turkey could range from €138 million in 2027 to €2.5 billion in 2032, and energy-intensive sectors such as iron, steel and cement will be particularly affected by this mechanism,” notes Elisabetta Falcetti, EBRD managing director for Turkey.
“This will likely increase the production costs of private sector companies and pose a risk to their global competitiveness. In this context, we believe that taking proactive measures will increase the competitiveness of Turkish industry in export markets, reduce dependence on costly imported fossil fuels and create new market opportunities,” she adds.
The bank has already made substantial investments in industrial decarbonisation and will continue this effort with a dedicated platform for industrial decarbonisation in Turkey, it says. “Since 2011, more than half of our investments have been directed to projects with green components. In the last 15 years of our operations in Turkey, we have allocated over €2.5 billion to renewable energy projects,” Falcetti observes. “We are already leading industrial decarbonisation efforts in key sectors including cement, steel, aluminium and fertiliser.”
The bank’s dedicated country platform focused solely on industrial decarbonisation aims to build consensus among stakeholders, paving the way for coordinated action, she adds.
By encouraging green energy initiatives, waste management, and climate governance, the EBRD believes it can boost the competitiveness of Turkish industries in international markets.
EBRD forecasts moderate growth for the Turkish economy, predicting 2.7% growth in 2024 and 3% growth in 2025. Since 2009, the bank has invested over €20.3 billion in Turkey across 455 projects, including significant contributions to Turkey’s energy transition and industrial decarbonisation efforts.
Elina Virchenko UAE
ArcelorMittal France tests low-carbon hydrogen
Hydrogen technology company Genvia and ArcelorMittal France have signed a contract to test low-carbon hydrogen in its steelmaking process, Kallanish notes.
The 200 kg/day low-carbon hydrogen electrolyser will be installed at ArcelorMittal’s Saint-Chély-d’Apcher site in northern France, with the aim to reduce the steelmaker’s carbon footprint.
The demonstrator includes a heat recovery unit, and purification and compression hydrogen unit, and will produce hydrogen via steam electrolysis, taking advantage of waste heat from ArcelorMittal’s continuous annealing process.
“This innovative project that we are leading with Genvia opens up a new opportunity to remove technological obstacles for the large-scale use of hydrogen in the steel industry,” says Bruno Ribo, chief operating officer of finishing & electrical steels at ArcelorMittal France.
“The Genvia demonstrator will participate in the decarbonisation of the electrical steel production process,” he adds.
ArcelorMittal Méditerranée previously collaborated with Genvia in 2021 on a pilot project to substitute current hydrogen use and support the decarbonisation of high-performance electric steel production required for the electric vehicle industry.
Natalia Capra France
Voestalpine sees no recovery in Germany before spring
Germany’s economy is unlikely to gain notable momentum before the end of voestalpine’s fiscal year on 31 March 2025, says its chief executive, Herbert Eibensteiner.
“The question of when Germany will recover is certainly interesting,” Eibensteiner said during a conference call on Wednesday when asked for his assessment. “In our outlook, we do not anticipate an essential improvement until the end of our business year.”
Voestalpine’s automotive-grade steels are suffering, especially from the continued weakness of German carmakers, which saw the company adjust its profit forecast one month ago. In contrast to that, voestalpine is banking on the plans of a Chinese carmaker for a plant in Hungary. “We would be the nearest supplier for steels, and we are already in talks with the manufacturer,” Kallanish heard from Eibensteiner.
Overall, Europe is the weakest market for voestalpine, while its activities in Asia and the USA are faring altogether better, executives said. They maintain expectations for positive performance at the company’s overseas plants. In terms of product segment, they expect solid further development for railway infrastructure, aerospace and warehousing.
In the high-bay warehousing sector, voestalpine is currently implementing projects for Danish retail chain JYSK and South Korean tire manufacturer Nexen Tire Corporation. For Nexen Tire, voestalpine is building a warehouse 50 metres high in the Czech Republic.
It also points to positive news from a flagship project in the railway infrastructure sector: voestalpine Railway Systems is supplying around 260 high-speed turnouts, including maintenance software, for Egypt’s first high-speed rail line, the Green Line.
Christian Koehl Germany
Green steel renewables, hydrogen requirements need transparency: LeadIT
European steelmakers need to be more transparent with their expected requirements of renewable electricity and hydrogen for planned green steel projects, so that sufficient supply is made available, according to a report by LeadIT.
Its analysis is based on data from its Green Steel Tracker of the possible renewable electricity and hydrogen demands for iron reduction and primary steel production in the EU. This is then compared with the production aspirations of the EU Renewable Energy Directive and with the renewable hydrogen targets under the REPowerEU plan.
The report says its assessment of company plans for sourcing renewable energy, green hydrogen, and/or hot-briquetted iron reveals there is insufficient transparency on how companies intend to supply these inputs, Kallanish notes.
It notes that many green steel production strategies depend on how the price of renewable energy and green hydrogen develops. More transparency would enable companies and policymakers to assess the feasibility of projects, to ensure realistic timelines. They could also assess whether sufficient supply infrastructure will be in place to meet demand at competitive prices.
“Most of these projects are planned to be online by 2030 – just five years away from today. Evaluating and planning the renewable electricity demand for the iron and steel sector with all stakeholders is essential to minimise delay,” says Per Andersson, head of secretariat of LeadIT.
According to the announced projects, which represent a third of current EU steel production, companies are planning to produce approximately 33 million tonnes/year of green iron and 42m t/y of green primary steel in the EU by 2030. By 2045, this would rise to approximately 35mt of green iron and 48mt of green primary steel.
If no scrap is used under scenario one, demand for green hydrogen could reach 1.7m t/y by 2030 and 1.9m t/y by 2045. This would account for 19% of the envisioned locally produced hydrogen.
The RePowerEU plan aims for a supply of 20m t/y of renewable hydrogen by 2030, with half produced within the EU and half imported.
With scenario two, which assumes 50% scrap usage alongside reduced iron for steelmaking, the renewable hydrogen demand decreases to around 1.05m t/y by 2045 and renewable energy demand to 84 TWh.
Renewable electricity demand for green iron and steel projects is likely to reach up to 135 terawatt hours per year for local renewable hydrogen production, GH-DRI iron reduction, and steelmaking via EAF.
The report also notes it would be much less energy intensive to use imported HBI than producing renewable hydrogen for the reduction of iron ore within Europe, requiring only a quarter of the energy.
The significant differences in energy needs across scenarios suggest that transparent planning by the EU, its member states and steel producers is essential to meet renewable electricity demand across sectors.
Carrie Bone UK