HRC prices stable in Europe; buyers question Q1 rebound
Trading was limited and, despite producer sources reporting more inquiries for first-quarter delivery material, negotiating deals remained challenging.
“There is a fight for every order,” a mill source in Northern Europe said.
The target offer for first-quarter delivery coil was €600-620 ($633-654) per tonne ex-works for January, with some mill aiming for €640 per tonne for March-delivery material.
“For January [delivery] we are targeting €600 [per tonne ex-works] minimum,” a second mill source said.
In contrast, November-December delivery HRC was being sold in Northern Europe between €540-560 per tonne ex-works.
December-delivery HRC was said to be largely sold out at first-tier suppliers.
Bids for January delivery coils were reported at €560-570 per tonne ex-works on Friday.
“Bullish sentiment has cooled a bit — mills announced €620 [per tonne ex-works at EuroBlech Fair [October 22-25] but it hasn’t been traded. There are mixed feelings about January trend,” a German trader said.
One buyer source reported a deal at €550-560 per tonne ex-works in Germany, but details were not specified before the publication deadline.
As a result, Fastmarkets calculated its daily steel hot-rolled coil index domestic, exw Northern Europe at €562.50 ($593.01) per tonne on Friday, up by €0.21 per tonne from €562.29 per tonne on Thursday November 14.
The index was also up by €3.75 per tonne week on week and by €8.12 per tonne month on month.
Hopes for a first-quarter price rebound were based on expected restocking as well as reduced imports in the market due to trade restrictions and stronger reliance on European material as a result.
However, persistently weak real demand from major steel-using sectors put any potential rebound into question.
“There is no [real] demand, so no chance for an increase [for HRC prices],” a second trading source said.
“The lack of imports will start to be visible in the market closer to the end of the first quarter of 2025, because there is still a lot of steel in the pipeline – it will take a few more months to clear this up,” a third trader said.
Sources said they do not expect to see any major changes in the market over the next few weeks.
“In Germany, we will have very short December – many trading companies, steel service centers and original equipment manufacturers will close for Christmas [in the week starting December 16] for at least three weeks,” a German distributor said.
In Southern Europe, meanwhile, Fastmarkets calculated its daily steel hot-rolled coil index domestic, exw Italy at €556.00 per tonne on Friday, down by €0.20 per tonne from €556.20 per tonne on the previous day.
The Italian index was also up by €3.50 per tonne week on week and by €7.25 per tonne month on month.
For the HRC with lead times in the first quarter of 2025, offers were heard at €600 per tonne delivered (€590 per tonne ex-works), compared with €570-580 per tonne delivered (€560-570 per tonne ex-works) for December lead times.
But buyer estimates of the tradable value were no higher than €550-570 per tonne ex-works.
The import HRC market remained quiet in the week to Friday, with offers from Asian mills heard in the range of €550-570 per tonne CFR, and €600-620 per tonne CFR from Turkey.
These prices failed to spur any buying interest at European buyers.
“Import prices are getting higher and therefore less interesting. Most likely and mainly because of the stronger US dollar versus the Euro,” a buyer source in Europe said.
Published by: Julia Bolotova
Polish rebar prices inch lower on decreased activity in construction, currency fluctuations
Fastmarkets’ weekly price assessment for steel reinforcing bar (rebar) domestic, cpt Poland was 2,500-2,530 zloty ($608-615) per tonne on Friday, decreasing by 20 zloty per tonne, from 2,520-2,550 zloty per tonne on November 8.
One Polish mill was heard offering rebar at 2,600 zloty per tonne CPT, but this was considered unrealistically high by market participants.
“They sold good volumes a few weeks ago and now they are busy to complete old orders. That is why they can allow their offers to be kept at higher levels,” a distributor source told Fastmarkets, adding that no one was buying at this price.
Other Polish mills offered rebar at 2,500-2,530 zloty per tonne CPT, with these price levels available even for small volumes of one or two trucks, Fastmarkets understands.
Fastmarkets’ sources estimated the workable market level at 2,500-2,530 zloty per tonne CPT.
But demand for rebar in Poland remained low due to seasonal factors and continuing economic headwinds, Fastmarkets understands.
“The construction season is behind us. The weather is colder with more rain. The construction sites still work, of course, but they are buying smaller volumes than before,” the distributor source told Fastmarkets.
“Demand is weaker – it can be seen especially in the cut-and-bend sector. Projects, which were planned for this year, started a few months ago, but now there are no new projects on the horizon,” a second distributor source said.
A weaker zloty has also contributed to the price decline because it has made rebar imports more expensive, with local mills keeping their offers slightly lower to maintain their competitive advantage, Fastmarkets heard.
“In the last few weeks, the Polish currency is weaker against the euro. This makes imports more expensive,” the first distributor source told Fastmarkets. “Polish mills see this and keep the rebar price at slightly lower levels.”
On November 15, the exchange rate was 4.33 zloty to €1, according to Oanda.com. This compares with 4.35 zloty to €1 at the start of the month, on November 1.
On October 1, €1 was exchanged for 4.28 Polish zloty.
On imports, Italy and Germany have not been actively offering rebar in the Polish market recently, industry sources told Fastmarkets.
The freight cost from Italy to Poland was at least €60 ($63) per tonne, and in light of the weaker Polish zloty, all these factors made imports from Italy uncompetitive.
The latest deals for imported rebar from Germany to Poland were heard at €590 per tonne CPT, industry sources told Fastmarkets. These transactions took place at the end of October.
This price level would be uncompetitive now compared with domestic prices because converted to the local currency it would be 2,556 zloty per tonne CPT.
Swiss Steel cuts 800 jobs
Swiss Steel Group says it is adjusting headcount, in reaction to the current economic conditions and persistently weak demand. This will result in the loss of around 800 full-time positions in Switzerland and abroad, the company informs Kallanish.
Weak demand in the European manufacturing industry, low production levels, and the modest growth outlook among Swiss Steel’s key customers necessitate further adjustments, it says in a statement.
The “capacity” reduction, as the firm terms it, is already in the final stages of planning and primarily impacts the European production sites as well as the entire sales organisation. Through this programme, the group will further reduce 530 jobs and adjust an additional 270 full-time positions in a cost-equivalent manner by reducing weekly working hours, it says.
It does not specify what tonnage will be affected.
For additional capacity adjustment, weekly contractual working hours at Deutsche Edelstahlwerke in Germany will be reduced by approximately 15%. These steps will be implemented promptly to take full effect in 2025, Swiss Steel says. As a result, the maker of special bar quality products will reduce its workforce to under 7,000 employees by the first half of 2025.
In Switzerland, 130 of the current 750 jobs at the Emmenbrücke plant are planned to be reduced. The positions to be eliminated will affect both production and administrative areas. It is anticipated that natural attrition alone will not suffice, making it necessary to terminate approximately 80 employees. These planned measures are currently subject to ongoing consultation, the firm notes.
Swiss Steel emphasises that the measures are aimed at ensuring the long-term optimisation and security of its production sites in Switzerland, Germany, and France. They complement the ongoing SSG 2025 strategy and restructuring programme, which has already achieved significant cost reductions, the company concludes.
Christian Koehl Germany
UK considers CRC tariff quota revocation
The UK Trade Remedies Authority (TRA) is reviewing whether the tariff-rate quota measure on category 2 steel – cold rolled coil – imports should be revoked, following an application made by Tata Steel UK. The authority’s preliminary view is the change in UK market conditions warrants the revocation.
The product in question falls under HS codes 72091500, 72091690, 72091790, 72091891, 72092500, 72092690, 72092790, 72092890, 72099020, 72099080, 72112320, 72112330, 72112380, 72112900, 72119020, 72119080, 72255020, 72255080, 72262000 and 72269200.
The current safeguard measure is due to expire on 30 June 2026.
The application suggests that as a result of a lasting change of circumstances, UK producers would cease to suffer serious injury if the safeguarding remedy were revoked.
Tata Steel ceased ironmaking in the UK in September and plans to resume crude steelmaking via the electric arc furnace route only in late 2027 (see Kallanish passim).
The period of investigation is set as 1 January 2024 to 21 October 2024. The quota measure was extended on 1 July 2024, but the relevant period of investigation for that extension review ended on 31 March 2023. Interested parties must submit comments by 24 November.
“Based on the application received from TSUK, and the evidence provided by them, it is the TRA’s preliminary view that the conditions in Regulation 35A(4) apply and that a recommendation should be made to the Secretary of State to revoke the definitive safeguarding measure of Category 2 steel products,” TRA concludes.
Separately, the Secretary of State for Business and Trade has accepted the TRA’s recommendation to maintain the 60.4% anti-dumping duty on imports of steel ropes and cables from China, protecting the UK’s £36 million ($45.6m) industry. The measure was among those inherited from the EU. The TRA conducted a transition review to establish whether it was still suitable for the UK’s needs.
In its final recommendation, the TRA recommended the anti-dumping measure be maintained for a further five years until 21 April 2028. The 60.4% duty also applies to some South Korean and Moroccan producers; however, the remainder from these jurisdictions are levied with zero duty.
Adam Smith Poland
Old scrap uptake challenges EU steel sector: Assofermet
The European steel sector should allocate resources towards innovation and technology to enhance the utilisation of old scrap, Italian steel trade association Assofermet president Cinzia Vezzosi tells Kallanish.
Anticipated trends indicate that old scrap from demolition grades will constitute the predominant portion of metal waste in the coming years. This shift is largely attributed to the manufacturing and steel sectors’ forecast of a decline in metal waste, driven by advancements in technological innovation that enable companies to minimise their waste output.
The European steel industry is characterised by ageing mills and EAFs. High-quality scrap can be obtained from the scrap sector, but the procurement and processing of certain scrap qualities, such as the high E40 shredded automotive grade represents a significant cost for merchants.
The purchase of car bodies entails substantial expense, alongside the investment in equipment and skilled personnel required to process material and effectively refine it into high-quality scrap. But there is reluctance from steelmakers to pay a premium for this material.
The utilisation of lower-quality demolition scrap is contingent on steelmakers’ investment in innovation and the adoption of new EAFs.
Steelmakers are instead allocating resources towards the acquisition of new shredders to enhance vertical integration and reduce reliance on external suppliers.
Direct reduced iron exhibits similar characteristics. New DRI capacity is being introduced in Europe and substantial investment will facilitate the establishment of new facilities. The challenge of sourcing high-quality DRI is anticipated to become significant, given the limited availability of high-grade iron ore.
Steelmakers should allocate resources towards innovation to effectively utilise lower iron content DRI, Vezzosi believes.
The Italian scrap sector is poised to allocate capital towards enhancing equipment capabilities. The availability of scrap is projected to decline in the upcoming years while old scrap is expected to significantly increase as new EAFs in Europe are set to replace the traditional blast furnace method.
“It is crucial for steelmakers to accelerate the revamping of their steelmaking processes in order to adapt to a more effective and lower quality scrap usage,” Vezzosi comments.
“Countries like Turkey and the US have made significant investments in advanced EAFs and latest generation equipment designed to utilise older and lower quality scrap, while maintaining the integrity of the finished product. We should follow their example,” she adds.
Natalia Capra France
CRC keeps lagging behind in northwest Europe
As coil prices consolidate in northwestern Europe, cold rolled coil activity stands out as being particularly slow.
One French trader bemoans the worrying silence on the CRC market. “When we send offers to our customers, we do not get any feedback whether they are interested at all. Normally, they give you at least some reply so that you know what’s going on,” he tells Kallanish. “But then, silence is an answer in itself, isn’t it?”
He believes his customers are also lacking feedback from their buyers. He sees prices for imports of CRC at around €690/tonne ($727) cfr Antwerp, following the recent uptick. This is not competitive with European offers that keep sitting at around €650/t ex-works, still defying the hike announcement of €40/t that came in early October.
One German buyer points out that CRC has, over time, become very much the domain of importers, while EU mills have lost interest in it. “They have built up so much galvanizing capacity here that they prefer going for the zinc version right away, no matter if with hot-rolled or cold-rolled base material,” he says.
A German analyst, too, notes that domestic prices for CRC have picked up minimally, but by less than he had expected, while hot rolled coil has risen by 2% since the beginning of the month to over €560/t. Looking ahead, however, he predicts an increase for both products by 7% until December, and possibly by a bit more for galv.
Christian Koehl Germany
Spanish HRC market weakness persists on lower demand
The Spanish hot rolled coil market continues to experience persistent weakness, driven by lower demand and a stagnant industrial environment as it moves into the third week of November. Most market participants anticipate challenging conditions for the rest of the year, Kallanish understands from local service centre sources.
“Demand from major consuming sectors has consistently fallen short of expectations throughout the year,” one supplier notes. “Activity remains far below the usual ‘normal’ level, and the industry has been in a complicated situation since the summer. The outlook for the rest of the year is not optimistic.”
A key factor contributing to the slump is reduced consumption in the automotive sector, which is weighing on the HRC market. The solar energy sector, meanwhile, is also experiencing uncertainty, with many primarily private projects remaining on hold.
“HRC sales in Spain remain weak. Major service centres are resisting offers below €590-600/tonne, but with pressure from international markets, they are likely to adjust their prices in the coming weeks,” another market source comments.
Spanish mills are currently quoting S235JR grade HRC at around €570-580/t ($602-612) ex-works, with some producers already preparing to reduce offers by €10/t. Meanwhile, HRC import prices have remained stable for nearly a month at €580-590/t cfr, which has limited their appeal to Spanish buyers.
Todor Kirkov Bulgaria
European Commission Economic Forecast: a gradual rebound in an adverse environment
After a prolonged period of stagnation, the EU economy is returning to modest growth, while the disinflation process continues.
The European Commission’s Autumn Forecast projects GDP growth in 2024 at 0.9% in the EU and 0.8% in the euro area. Economic activity is forecast to accelerate to 1.5% in the EU and to 1.3% in the euro area in 2025, and to 1.8% in the EU and 1.6% in the euro area in 2026.
Headline inflation in the euro area is set to more than halve in 2024, from 5.4% in 2023 to 2.4%, before easing more gradually to 2.1% in 2025 and 1.9% in 2026. In the EU, the disinflation process is projected to be even sharper in 2024, with headline inflation falling to 2.6%, from 6.4% in 2023, and to continue easing to 2.4% in 2025 and 2.0% in 2026.
The 🍁 Autumn 2024 #ECForecast projects GDP growth in 2024 at 0.9% in the 🇪🇺EU and 0.8% in the 💶euro area.
In 2025, growth in the EU is expected to pick up to 1.5%, as consumption picks up and investment is set to rebound.
ℹ️ Full forecast: https://t.co/IjdBlJEjyb pic.twitter.com/S07pnzFf3h
— EU Economy & Finance (@ecfin) November 15, 2024
Growth to accelerate as consumption picks up and investment rebounds
After resuming growth in the first quarter of 2024, the EU economy continued to expand throughout the second and third quarters at a steady, albeit subdued, pace.
Employment growth and recovery in real wages continued to support disposable incomes, but household consumption was restrained. A still high cost of living and increased uncertainty following the repeated exposure to extreme shocks, compounded with financial incentives to save in a context of high interest rates, led households to save an increasing share of their income. At the same time, investment disappointed, with a deep and broad-based contraction across most Member States and asset categories in the first half of 2024.
The restraint to consumption appears to be loosening. As the purchasing power of wages gradually recovers and interest rates decline, consumption is set to expand further. Investment is expected to rebound on the back of strong corporate balance sheets, recovering profits, and improving credit conditions. The impulse of the Recovery and Resilience Facility and other EU funds will also drive an increase in public investment over the forecast horizon.
Overall, domestic demand is projected to drive economic growth going forward. In 2025 and 2026, exports and imports are expected to grow at broadly the same pace, implying a neutral contribution to growth by net trade.
The disinflationary process continues
The disinflationary process that started towards end-2022 continues despite a slight pick-up in inflation in October, largely driven by energy prices.
Price pressures in services remain high, but are projected to moderate as from early 2025, driven by slowing wage growth and an expected pick-up in productivity, and supported by negative base effects. This sets the stage for inflation to fall towards target in late 2025 in the euro area and in 2026 in the EU.
Labour market remains strong, with record-low unemployment
The EU labour market held up well in the first half of 2024 and is expected to remain strong. Employment growth in the EU is set to continue, although at a slower pace, from 0.8% in 2024 (0.9% in the euro area) to 0.5% in 2026 (0.6% in the euro area).
In October, the EU unemployment rate reached a new historical low of 5.9%. In 2024 as a whole it is projected to stand at 6.1% (6.5% in the euro area) and to edge further down thereafter, reaching 5.9% in 2025 and 2026 (6.3% in the euro area).
Declining deficits on the back of fiscal consolidation
As many Member States work to lower their debt ratios, the EU general government deficit is set to decline in 2024 by around 0.4 pps., to 3.1% of GDP, and to 3.0% in 2025. In 2026, the positive economic momentum is projected to reduce the deficit further to 2.9%. In the euro area, the deficit is forecast to decrease from 3.0% in 2024 to 2.9% in 2025 and 2.8% in 2026.
The aggregate debt-to-GDP ratio of the EU is, however, projected to edge up, from 82.1% in 2023 to 83.4% in 2026. This follows an almost 10 pps. decrease between 2020 and 2023, and reflects the effect of still elevated primary deficits and rising interest expenditure, that are no longer offset by high nominal GDP growth as inflation eases. In the euro area, government debt is forecast to rise from 88.9% of GDP in 2023 to 90% in 2026.
Uncertainty and risks increase
Uncertainty and downside risks to the outlook have increased. Russia’s protracted war of aggression against Ukraine and the intensified conflict in the Middle East fuel geopolitical risks and risks to energy security. A further increase in protectionist measures by trading partners could upend global trade, weighing on the EU’s highly open economy.
On the domestic front, policy uncertainty and structural challenges in the manufacturing sector could entail further losses of competitiveness and weigh on growth and the labour market. Moreover, delays in the implementation of the RRF or a stronger than expected impact from fiscal consolidation could further dampen the resumption of growth. Finally, the recent floods in Spain illustrate the dramatic consequences that the increasing frequency and scope of natural hazards can have not only for the environment and the people affected, but also for the economy.
Background
This forecast is based on a set of technical assumptions concerning exchange rates, interest rates and commodity prices with a cut-off date of 31 October. For all other incoming data, including assumptions about government policies, this forecast takes into consideration information up until, and including, 25 October. Unless new policies are announced and specified in adequate detail, the projections assume no policy changes.
The European Commission publishes two comprehensive forecasts (spring and autumn) each year, covering a broad range of macroeconomic and fiscal variables for all EU Member States, candidate countries, EFTA countries and other major advanced and emerging market economies.
Source: ec.europa.eu
Nippon Steel Trading strengthens European presence with new London office
Nippon Steel Trading Corporation announces the establishment of a new London office, operating under Nippon Steel Trading Austria GmbH. The office officially opened its doors in November 2024.
This strategic move positions Nippon Steel Trading closer to key customers in Western and Northern Europe. London’s status as a major European hub allows for efficient and rapid service across the region.
The London office will play a vital role in bolstering sales within promising sectors like renewable energy, hydrogen, and other decarbonization technologies. Additionally, they will focus on high-performance materials for the aviation industry.
The London office will be led by Hayato Tsuchiya, who also serves as President of Nippon Steel Trading Austria. Kohtaroh Morioka will assume the role of Office Representative.
Source: nst.nipponsteel.com