Vallourec sells former German plant property
Vallourec has entered into an agreement to sell the majority of its Düsseldorf Rath property to CTP, Europe’s largest publicly-listed industrial property developer, Kallanish learns from the French pipemaker.
This will involve the sale of the approximately 900,000 square meter property for €155 million ($126.6m). The site was home to Vallourec’s primary tube production operations in Germany, which closed at the end of 2023 as part of the New Vallourec plan.
The transaction is expected to close around year-end, subject to customary closing conditions, including CTP’s receipt of the waiver of the city’s pre-emption right, the pipemaker notes.
“This transaction marks a major milestone for Vallourec, as we have now finalised the closures and sales of all of the major European assets targeted by the New Vallourec plan in less than three years,” says Vallourec chief executive Philippe Guillemot. “As a reminder, 80-100% of cash flows generated in the second half of 2024, including the proceeds from the sale of this facility, will be eligible for return to shareholders.”
Earlier, Vallourec announced it is divesting a logistics hub in Indonesia as part of its initiative to concentrate on its main operations (see Kallanish passim). The pipe manufacturer plans to divest its interests in PT CPPI and PT SCN, referred to as the Logistics Group, to CKB Logistics, a subsidiary of ABM Investama Tbk, for an estimated €20m.
Vallourec is also partnering with Advanced Supply Management Operations (Asmo), a joint venture between DHL and Saudi Aramco formed earlier this year, with a view to increasing its Middle East and North Africa market share.
Svetoslav Abrossimov Bulgaria
Erste: European automotive suffers loses, Chinese industry booms
European automotive producers are losing out on the Chinese market, which is still crucial for their sales, according to Erste Group research.
In the past five years, the share of German brands in the Chinese market has decreased by 6 percentage points. “Earlier, for example, Volkswagen sold about a third of its global car production in China in 2023. Over the last ten years, passenger car production in Asia has increased by 33%, and in China even by 68%. By contrast, it has fallen by 11% in Europe and by 24% in Germany,” Erste notes in a report.
Moreover, Europe’s share of global passenger car production has fallen from 28% to 23%, while Asia’s has risen from 56% to 68% during 2012-2023, the document shows.
“The share of European passenger car production in total world production is falling, but European countries are still among the world’s major car manufacturers: Seven of the top-15 passenger car manufacturers are from Europe,” Erste Group notes. “Fortunately, Chinese companies have not yet established themselves in Europe. The most difficult situation today is in the German car industry. The point is that, in Germany, the unit labour costs in the automotive industry are two times higher than in Italy or Spain and three times higher than in the Czech Republic and other CEE countries.”
The most delicate situation is at Volkswagen, whose management plans to close up to three –of 10 – German factories, cut VW employee wages by 10% and conduct layoffs. The unions, on the other hand, want the carmaker to give pay rises, Kallanish notes.
According to the bank, one option is to move production to a cheaper foreign country. “This is already happening, as German production of passenger cars reached a peak before Covid-19 in 2016. It has been declining ever since. On the other hand, in countries like the Czech Republic and Slovakia, passenger car production has been rising,” the report observes.
Global motor vehicle production reached its all-time high in 2017, with 97 million motor vehicles produced worldwide, 70% of which were passenger cars, Erste Group says. Then came the pandemic and production fell by a quarter by 2020.
Production reached 93m units last year and was only 4% below the 2017 record.
Svetoslav Abrossimov Bulgaria
Tony Harris appointed new head of SSAB Europe
Tony Harris has been appointed new head of SSAB Europe effective 1 February 2025, Kallanish hears from the Swedish company. He transitions into this role from his current position as head of sales and business development at SSAB Europe.
Harris has a commercial background at both small and medium-sized enterprises and multinational corporations, SSAB notes. His expertise covers not only sales and business development but also operations and general management, the company adds.
Since joining SSAB in 2014, following the merger with Rautaruukki, Harris has served as a key member of SSAB’s European management. Upon assuming his new role, he will also join SSAB’s executive committee. He will succeed Olavi Huhtala, who has announced his retirement.
“Tony has played a crucial role in driving SSAB Europe’s progress, demonstrating a deep understanding of our company’s operations and culture,” says SSAB chief executive Johnny Sjöström.
Christian Koehl Germany
Italian plate market enters quiet period with cautious hopes for price recovery in Q1
In Italy, trading picked up slightly in the past week, with buyers finalizing their bookings for the first quarter ahead of the year-end.
But trading was slow in general, and producer sources said they were getting 20-40% fewer orders in November-December compared with the same period last year.
As Fastmarkets reported earlier, Italian plate producers were trying to increase prices for new rolling and were targeting offers of €650 ($682) per tonne ex-works for the first quarter.
Some suppliers said they have had limited success, managing to seal higher prices in bookings with some clients.
But another supplier said that higher prices could have been sealed mainly for project business, while the spot market remained weak.
“For small- and medium-sized businesses, there is a struggle; there is fierce competition downstream. We will see if distributors and steel service centers manage to [increase] prices downstream in the new year,” a supplier source said.
Most buyer sources estimated tradeable prices at no higher than €630 per tonne ex-works in the week to Wednesday, claiming that some suppliers were still accepting lower prices to fill gaps in order books, particularly for commodity grades.
Deals were reported at €630-640 per tonne ex-works during the assessment week.
As a result. Fastmarkets’ weekly price assessment for steel domestic plate, 8-40mm, exw Southern Europe was €630-640 per tonne on Wednesday, narrowing upward by €10 per tonne from €620-640 per tonne on December 11.
Domestic suppliers were taking prolonged production stoppages in December and January, and industry sources expressed hopes that the move might help to balance the market so the Italian rerollers would be able to achieve higher prices in new-year trades.
The recent news about the safeguards review, announced by the European Commission on Tuesday December 17, also sparked some cautious optimism among sellers.
No details have been revealed yet about the potential changes to steel safeguard measures, but sources familiar with the matter said that quarterly quotas for some origins will likely be reduced and/or new individual quotas might be imposed.
Sources suggested that the Commission’s move will further limit appetite for overseas bookings and therefore support a rebound in European prices in the medium to long run.
“We are heading into [an] era of global trade wars and growing protectionism. Looks like reliance on domestic mills will only increase in 2025,” a buyer in Italy said.
Sources said that interest in overseas plate has already been somewhat cooled by talks about a potential anti-dumping investigation, and the recent safeguard news announcement might result in stronger reliance on European plate.
Some suppliers — notably South Korea, Indonesia and India — have significantly increased heavy plate shipments to the EU in 2023-2024.
Notably, in January-October 2024, total quarto plate deliveries from South Korea to the EU amounted to 640,513 tonnes, compared with 618,070 for the entire year of 2023, Global Trader Tracker (GTT) data showed. In 2022, South Korea shipped only 357,504 tonnes of plate to the bloc.
In the first ten months of 2024, India supplied 439,415 tonnes of quarto plate to the bloc, compared with 349,901 tonnes for the entire year of 2023.
In January-October 2024, quarto plate deliveries from Indonesia to the EU stood at 302,109 tonnes, compared with 328,894 for the entire year of 2023.
Offers of February-shipment plate to Italy from South Korea and Indonesia were heard at €570-580 per tonne CFR.
