EU HRC market remains stable on low market activity
Domestic European hot-rolled coil prices were stable on Dec. 3, due to slow trading activity and low levels of weak demand in the domestic flat steel market.
“Competition between mills and distributors is intense in the spot market, as service centers are destocking at year-end,” a Germany-based distributor said. The source reported that some mills in southern Europe were undercutting current market prices, although it did not impact prices on the wider spot market.
“The market remains cautious, with limited demand recovery expected in the short term,” the source added.
Market sentiment indicated that a demand recovery after Christmas was necessary to support prices, as well as a reduction in capacity. Supply-side factors are expected to play an important role in supporting prices by decreasing the availability of material in the market.
Platts assessed Northwest European HRC at Eur550/mt ex-works Ruhr on Dec. 3, stable on the day.
An offer was heard at Eur550-570/mt EXW Ruhr.
Platts assessed domestic HRC in Southern Europe at Eur545/mt EXW Italy, stable on the day.
“Imports remain limited due to pricing issues, the Euro/USD exchange rate, and EU safeguards,” according to sources. A reduction in demand for imports helped support demand for material from domestic European mills.
Platts assessed imported HRC in Northwest Europe at Eur530/mt CIF Antwerp, stable on the day.
Platts assessed imported HRC in Southern Europe at Eur525/mt CIF Italy, stable on the day.
Platts is part of S&P Global Commodity Insights.
Pilot phase of Turkey’s ETS on track for 2025 launch: official
Turkey’s plans to launch its domestic compliance carbon market are on track, with a pilot phase set to start in early 2025, a senior official from the country’s Directorate of Climate Change said Dec. 3.
Speaking at S&P Global Commodity Insight’s Global Carbon Markets Conference in Barcelona, Huseyin Ayaz, who specializes in carbon pricing for the Turkish government, said the establishment of the country’s emissions trading system is moving in the right direction.
“We have completed all the preparation of the drafting process of the ETS, and we are waiting for its assent by the parliament,” said Ayaz, adding that some elements still need to be clarified and updated.
The pilot phase is scheduled to start at the beginning of next year, while the first implementation phase is set to run from 2027 to 2034.
Turkey’s ETS is expected to be similar to the EU Emissions Trading System — where CO2 emissions from regulated sectors have fallen by almost 40% since 2005, when the EU ETS was launched — while also raising billions of euros in revenue from government auctions of carbon allowances.
Turkey’s industrial sectors — refining, metals, chemicals and cement — can be very carbon intensive, and analysts expect the Turkish ETS to have a similar effect as the EU’s carbon market, boosting the uptake of renewable energy and reducing demand for coal and oil-fired electricity generation, while encouraging cleaner technologies across emitting industries.
Currently, the draft ETS regulation mentions that allocated allowances will be distributed to obligated operators within the scope of the ETS through an auction method. These allocations can then be traded in the secondary market, which will be overseen by Turkey’s largest energy exchange EPIAS.
Reality of CBAM
Ayaz also acknowledged that the impact of EU’s carbon border adjustment mechanism on the Turkey’s industrial sector will be felt, and having a domestic carbon market will help it manage this risk.
“We know that CBAM is reality for us. We are a candidate country for CBAM as our companies have a huge amount of trade with the EU,” he added.
With the EU’s CBAM set to come into its definitive phase from 2026, Turkish exporters face higher costs, as nearly half of all exports go to the EU.
The EU mechanism imposes a carbon tariff on emission-intensive commodities imported by the EU, including aluminum, cement, electricity, fertilizers, hydrogen, iron and steel. The aim is to level the playing field for EU companies, as most exporting countries do not have a carbon price as high as EU ETS, or do not have a price on emissions at all.
Carbon-pricing programs like the EU ETS are considered an effective and economic way to reduce greenhouse gas emissions. As of mid-2024, there were 75 carbon taxes or emissions trading systems in operation, according to the World Bank.
Carbon prices currently vary significantly on a country-to-country basis as there is no global carbon price. Carbon permits under the EU ETS are around five times more expensive than compliance prices in China, the industrial powerhouse of the world.
Platts, part of S&P Global Commodity Insights, assessed EU Allowances for December 2024 at Eur68.73/mtCO2e ($72.35/mtCO2e) Dec. 2. This compared with China’s compliance emissions price, which was valued at Yuan 102.38 mtCO2e ($14.24/mtCO2e) on Nov. 29, according to the Shanghai Environment and Energy Exchange.
Spot market for HRC in Europe remains quiet; trend for Q1 unclear
European steel hot-rolled coil prices were broadly steady on Tuesday December 3, with the market awaiting the outcome of long-term contract negotiations between mills and end users, sources told Fastmarkets.
In Northern Europe, official offers for January-February delivery HRC were still being reported at €600-620 ($630-651) per tonne ex-works, but no transactions have been reported at such prices so far.
Market participants said local suppliers were accepting between €560 and €580 per tonne ex-works on firm bids.
One buyer estimated the workable price even lower, at €540-550 per tonne ex-works, but this was not widely supported by others.
One re-roller in the region was hoping to achieve €590 per tonne ex-works for first-quarter-delivery HRC, Fastmarkets understands, but sales were heard at no higher than €550-560 per tonne ex-works.
Fastmarkets calculated its daily steel hot-rolled coil index, domestic, exw Northern Europe, at €561.25 ($589.75) per tonne on Tuesday, up by €1.25 per tonne from €560.00 per tonne on Monday.
The index was down by €2.92 per tonne week on week, but was up by €3.75 per tonne month on month.
Slow demand and oversupply were the main obstacles to achieving higher prices, sources said.
Downstream competition between steel service centers (SSCs) and distributors has been fierce, sources said.
“High inventories and cashflow needs result in SSCs fighting for every tonne,” a trader source in Germany said.
Other market participants said that some integrated mills were selling material at lower rates through their SSCs.
“The mills are hungry for volumes, but they don’t want to lower their official offer prices due to pending negotiations with automotive [original equipment manufacturers],” a second buyer said.
In the weeks ahead, the outcome of long-term contract negotiations between automotive OEMs and steelmakers should be clearer, which will then set the tone for spot sales, sources told Fastmarkets.
“Not only the price [in long-term contracts] but also the volumes the automotive sector [takes will be] important to understanding how the spot market will evolve,” a distributor in the region said.
Buyers were hoping to achieve a discount of around €100 per tonne for first-half and full-year 2025 contracts, while mills were hoping for a more minor reduction of some €50 per tonne, or even a price rollover in some cases, sources said.
“Negotiations [with the automotive industry] are continuing, and are expected to close in about 15 days,” a mill source told Fastmarkets on December 3.
In Southern Europe, Fastmarkets calculated its daily steel hot-rolled coil index, domestic, exw Italy at €560.00 per tonne on Tuesday, unchanged day on day.
The Italian index was up by €1.50 per tonne week on week and by €2.50 per tonne month on month.
The market in Italy was also mostly quiet, however, with prices broadly flat amid subdued trading.
One integrated mill in Italy was hoping to achieve €600 per tonne delivered (€590 per tonne ex-works) for first-quarter-delivery HRC, with bids for such material coming in at €570-580 per tonne delivered (€560-570 per tonne ex-works).
“[The mill] is trying to get €600 [per tonne delivered], but there has been a weak response so far,” a buyer in Italy said.
“Nothing has been closed at €600 [per tonne delivered],” a second buyer said.
Another supplier was heard accepting around €550 per tonne ex-works for material with lead times of about 5-6 weeks.
The import market in Italy, meanwhile, has been mostly quiet recently due to trade defense measures, as well as uncompetitive prices, sources said.
Offers of HRC for February shipment from Taiwan and South Korea to Italy were heard at €580 per tonne CFR, down from €600 per tonne CFR in late November, but failed to spark interest among European buyers.
“Shipment in February means arrival in April, which makes no sense,” a third buyer source said, “[but] the domestic sector can still deliver in January.”
Sources reported the sale of some Turkish HRC to Italy at €560 per tonne CFR, but no further details were available – although one source said the deal had been done through a trader.
Japanese suppliers were not offering HRC to Europe due to a looming anti-dumping probe, but limited tonnages of HRC from Indonesia were on offer to Italy at €550-555 per tonne CFR.
Published by: Julia Bolotova
Darina Kahramanova in Sofia contributed to this report.
Trump reiterates intention to block USS/Nippon merger
US President-elect Donald Trump is reinforcing his campaign promise to block the acquistion of US Steel by Japan’s Nippon Steel, Kallanish reports.
“I am totally against the once great and powerful US Steel being bought by a foreign company, in this case Nippon Steel of Japan,” Trump proclaims in a message on social media platform Truth Social.
On Monday, Trump reiterated his objections to the deal and offered insight into how he imagines US Steel will thrive in an alternative scenario.
“Through a series of Tax Incentives and Tariffs, we will make U.S. Steel Strong and Great Again, and it will happen FAST!” wrote Trump.
The United Steelworkers (USW) labour union applauds Trump’s position.
“The USW welcomes President Trump’s continued opposition to Nippon Steel’s acquisition of US Steel, a deal with serious long-term implications for US economic and national security. Our union thanks him for his continuing commitment to American manufacturing and agrees with him that with proper attention, US Steel will flourish well into the future as a domestically owned and operated company,” the USW says in a statement after the latest Trump social media post.
The president-elect adds: “As President, I will block this deal from happening. Buyer Beware!!!”
David Burritt, chief executive of US Steel, has said the 123-year-old company would move out of its move out of its Pittsburgh, Pennsylvania, headquarters if the acquisition is not allowed to proceed. The USW later called that statement a “bullying” tactic, which caught the attention of legislators who accused Burritt of being financially motivated if the deal succeeds.
Currently, the Committee on Foreign Investment in the US (CFIUS) is auditing the deal to assess potential national security risks to the US. The CFIUS initially had penned a letter to USS/Nippon noting its concerns that the acquisition would jeopardise America’s best interests. US President Joe Biden agreed to allow Nippon to refile essential paperwork and postpone the decision to allow CFIUS more time for consideration. The committee is expected to reach its decision this month and Biden would then be able to exert action for or against the deal.
Japanese Prime Minister Shigeru Ishiba sent Biden a letter requesting that the US government approve the transaction. Biden has been vehemently opposed to the deal, vowing to oppose it.
Kristen DiLandro USA
German fabricator production continues to trend lower
The production volume of Germany’s steel and metals working industries from January through September was 7.2% lower than in the first nine months of 2023, according to industry federation WSM.
Order intake in the first seven months was down 12.8% y-on-y, amid the ongoing economic dip, WSM notes, while utilisation of production facilities was 76.3% in July, Kallanish notes.
September reported a 6.7% year-on-year decrease, a less sharp fall than July’s 10.8% y-o-y decrease.
In August a poll by economic research firm ifo Institute reported 43% of companies in the sector predicted a decline over the next six months from an already modest level of business activity. Half of the respondents expected business to remain flat.
By June, the industry workforce had reduced by 8,700 y-on-y, which is around 2.4% of the former workforce, Kallanish understands.
In early October, WSM reported that 41% of its members would have to lay off further staff.
The federation’s managing director, Christian Vietmeyer continues to call on policymakers to take action against a further industrial deterioration, with a focus on tackling uncompetitive power prices in Germany.
He conceded that the ongoing political situation was also more challenging, after collapse of the current government, with new elections projected for early 2025.
Christian Koehl Germany
Ruukki opens new roof profile production
Ruukki Construction, part of SSAB, has opened the new roof profile production line in Vimpeli, Finland, Kallanish notes.
Recent years have seen Ruukki spend a total of €8 million ($8.4m) on the Vimpeli plant as part of a multi-year investment programme. In Vimpeli, the company has further improved product properties, streamlined material flows, increased production capacity and the degree of automation, upgraded production lines, and improved social and civil defence shelter facilities, SSAB notes.
The almost 100-metre profiling line in Vimpeli will double the production capacity of the plant’s snap lock roofing. It is dedicated to making Ruukki Classic, Ruukki Classic LowCarbon and Ruukki Trendic profiles, and is the largest single machine investment in the project, which was announced in December 2021.
The improvements will result in new, better and more sustainable roofing products, more efficient for installation partners as well as for house builders and renovators, SSAB says.
Christian Koehl Germany