Huta Czestochowa commences recommissioning
Polish plate mill Huta Czestochowa commenced cold recommissioning on Friday under its new lessee, state-owned coal exporter and steel re-roller Weglokoks, a company spokesperson confirms to Kallanish.
After over a year of being idle, the plant’s equipment was not in the best shape, but workers managed to start commissioning on schedule, new Huta Czestochowa chief executive Adrian Sienicki tells Wirtualny Nowy Przemysl (WNP). The technological problems nevertheless allow Weglokoks to evaluate the condition of the plant and its investment requirements.
Weglokoks already operates plate re-roller Walcownia Blach Batory (WBB), which supplies plate to Polish arms manufacturer Polska Grupa Zbrojeniowa (PGZ). The relaunch and potential acquisition of Huta Czestochowa, which can produce armour plate, could strengthen Weglokoks’ position in this market, Sienicki notes.
The plant enables a quicker supply chain, which is important in the current uncertain geopolitical climate, he adds. Weglokoks is already in talks with Poland’s defence ministry and PGZ about supplying plate from Czestochowa.
The firm is not concerned that Czestochowa could cannibalise WBB’s market share, as it is looking into converting production at the latter to smaller volumes of specialist, high-margin products.
Although Weglokoks shelved plans for its electric arc furnaced-based hot strip mill project in Ruda Slaska, Huta Czestochowa will eventually need additional slab supply. Its EAF has a 700,000 tonnes/year crude steel capacity, while the plate mill is 1.2m t/y. Currently, however, Czestochowa can be used to supply slab to Weglokoks’ other rolling mills, Sienicki notes.
“In the case of Huta Czestochowa, we see some opportunities for modernisation, but it is too early to talk about this. We believe the potential acquisition of this steelworks would be an excellent investment, which would complement the assets we have in the Weglokoks group,” he tells WNP.
Adam Smith Poland
Study finds German steel industry at crossroads
A German study has underlined the importance of steel for the country’s industrial networks, its economic resilience and the strength of its small and medium-sized enterprises (SMEs). It also unearthed concern over the progress of the low-emission technological transition being carried out by mills.
The study, published earlier this month, was assigned by steel federation WV Stahl to consultancy Oliver Wyman and economic research institute IW Consult. A poll among 192 steel users showed that Germany as a steelmaking location is at a crossroads. Companies are increasingly expressing doubt over whether the technological transition will be successful. Failure, however, would have profound repercussions on investments and jobs for steel-using industries, Kallanish reads in the study.
“A regional steel industry is essential for the competitiveness of subsequent industries – as an incentive for innovation, higher sustainability standards, or in facilitating quality advantages,” says Hanno Kempermann, managing director of IW Consult. “If the steel industry relocates, many of the subsequent industries will reduce their production sites in Germany.”
In figures, the study states that 23% of the production value of the entire German manufacturing industry is generated by steelmakers, their suppliers, and their customers. This equals a value of €1,818 billion ($1,890 billion). SMEs, especially, are major players in the chain. Roughly half of the value generated by SMEs is connected to the “Value Chain Steel Network,” as the authors call it.
Over 60% of companies emphasise that the dense network of the country’s steel value chain provides a platform for targeted research & development activities. Only 14% believe the transition can be carried out as scheduled by 2035. One major hurdle for the transition is high energy prices, said 81% of participants.
Christian Koehl Germany
ArcelorMittal Bytom service centre eyes renewables self sufficiency
ArcelorMittal is installing a 1 MW solar power plant at its Bytom service centre in Poland that will power the site’s processing lines, administrative building and other equipment in its entirety.
The firm forecasts that in the summer, around 90% of the solar energy generated will go to captive use. The new plant should be commissioned in mid-2025.
“It must be remembered that renewable energy is necessary for decarbonisation, while steel is an important construction material necessary for the production of renewable energy infrastructure,” ArcelorMittal SSC Poland chief executive Rafal Nawrat says in a note sent to Kallanish. “For example, 80-90% of the mass of a wind turbine material is steel and iron, similarly in the case of photovoltaic [PV] panels and transmission networks.”
In constructing the solar plant, supplier Quanta Energy will use ArcelorMittal “Magnelis” coated sheet, which is ideal for PV installations, Nawrat adds. This will be processed at the Bytom site before use.
“The construction of a photovoltaic farm for the leader of the steel industry is proof that renewable energy sources are not only a response to environmental challenges, but also a key element in building long-term competitiveness,” says Quanta Energy ceo Piotr Grzybczak. “We are proud that our solar and wind solutions … not only reduce the operating costs of our customers, but also strengthen their position as responsible leaders setting directions for sustainable development in their industries.”
Adam Smith Poland
Catastrophic weather impacts Spain´s car industry in November
Spain’s car industry experienced a downturn in November. The decline was largely attributed to the severe flash floods, hail and tornadoes that struck the country, Kallanish notes.
The Valencia region was particularly affected, experiencing what has been described as Europe’s most catastrophic flood-related event since 1967, resulting in at least 227 casualties. The devastation significantly disrupted production and supply chains in the automotive sector.
According to the country’s automotive association, Asociación Nacional de Fabricantes de Automóviles y Camiones (Anfac), output in November was 214,764 units, compared with 227,850 vehicles in October. This volume was also 18.1% less than in the same month in 2023. Of the total, 74.1% were gasoline and diesel-powered automobiles.
Production in the first 11 months of the year amounted to 2.23 million units, a decrease of 3.1% versus January-November last year.
“Despite November being impacted by the DANA weather phenomenon or the comparison with an atypical month in 2023, production reflects a reality: If there is not enough demand, manufacturing suffers,” says Anfac general director José López-Tafall.
Spanish vehicle exports weakened in November. Shipments were 189,064 units, down from 200,363 units in the previous month and 19.9% less than a year ago.
European markets had a 94.3% share in Spanish deliveries in November, 0.3 percentage points more on-month and 3.4 percentage points higher on-year. Eleven-month exports slipped 4.4% during the same period in 2023 to 1.98m vehicles, Anfac data show.
Todor Kirkov Bulgaria
VW scraps plans to close plants in Germany, opts for massive cuts in output, jobs instead
“The [steel] market sentiment is pessimistic, especially in Germany, where many companies are sizing down [operations] and announcing layoffs,” a trading source in Germany told Fastmarkets on Monday December 23.
Following several strikes and over 70 hours of collective bargaining, VW and trade union IG Metall have finally reached the agreement “Zukunft Volkswagen,” which shapes the company’s future until 2030, VW said in a statement published late on Friday December 20.
VW’s board of management was initially pushing for the closure of three car-making plants, which was averted, but massive layoffs and production cuts have been announced.
Notably, a reduction in capacity of 734,000 units across German plants is planned before 2030, and the workforce will be reduced by more than 35,000 people across VW’s German locations by 2030.
IG Metall said they were satisfied with the results, though.
“That is correct, [there will be job cuts]. But you have to consider that the ‘job cuts’ will be socially responsible, meaning there will be solutions through part-time retirement etc.,” IG Metall’s spokesperson told Fastmarkets on Monday.
IG Metall said in a statement seen by Fastmarkets, “Although there are concessions under the collective agreement beyond the monthly income [i.e., changes in bonuses and holiday pay], these are offset by the solidarity-based safeguarding of all sites, including future prospects [and] a new job protection until the end of 2030.”
The jointly declared goal announced for the Volkswagen Passenger Cars brand, the core of Volkswagen AG, is to become the technologically leading volume manufacturer globally by 2030.
“The comprehensive capacity reduction across the German plants and significant and sustainable decrease in labor costs of €1.5 billion ($1.56 billion) per year as part of the ‘Zukunft Volkswagen’ agreement have now created the financial conditions for this goal,” VW said in a statement on Friday.
Altogether, VW aims to save over €15 billion per year in the midterm.
Restructuring of manufacturing sites
The electric cars ID.3 and Cupra Born will be built in VW’s Wolfsburg plant. Golf and Golf Estate production will shift from Wolfsburg to Mexico in 2027, but an electric Golf and an electric vehicle (EV) based on the modular car platform Scalable Systems Platform (SSP) will be made in Germany around 2030.
As a result, production will be focused on two assembly lines instead of the current four.
The Emden plant will continue to build the EV models ID.4 and ID.7.
The Osnabrück factory will stop production of the T-Roc Cabrio in mid-2027. “Options for a different use of the site are currently being explored,” VW said.
Zwickau will focus on one production line as of 2027, building the Audi Q4 e-tron and the Q4 e-tron Sportback.
The Dresden plant, known as the Transparent Factory, will halt production before the end of 2024. It currently builds the ID.3 model; VW said they’re working on alternative options for the plant.
The Volkswagen Group Components sites in Kassel, Braunschweig, Salzgitter, Hannover, Wolfsburg and Chemnitz will be retained, but these locations will have new working time models to make production capacities more flexible.
European automotive sector in decline
Output from the EU’s automotive sector is expected to decline in 2024, according to the European Steel Association’s (Eurofer) latest quarterly report, published at the end of October.
The sector is 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), the association said.
New car sales fell by 1.9% in Europe this November, dragged down by a 9.5% drop in overall EV sales, including a 21.8% slump in German EV sales, according to data from the European Automobile Manufacturers Association (ACEA), published on Thursday December 19.
VW said in September that annual European car demand should level off around 14 million vehicles, down from 16 million before the Covid pandemic.
Steel sector under pressure
The automotive industry is the second-largest steel-consuming industry after construction, according to Eurofer, so the steel sector “feels” the decline in consumption.
“We had around 20% fewer orders from the automotive sector year on year [in October-December],” a steel service center source in Germany told Fastmarkets.
A German buyer said, “The missing investments create no demand; therefore, all flat steel producers in the EU have obtained, for months, only minimal orders from the automotive industry.”
And the trading source in Germany said, “On top of that, Germany is effectively without [a] government. A newly elected government can’t be in power until around April 2025, at best. Such a long waiting time is poison for any investor who needs security for their planned projects.”
Negotiations between steel mills and original equipment manufacturers (OEMs) in the automotive industry for hot-rolled coil contracts for the first half of 2025 and the full year were still under way.
In the week to Friday, several sources reported some closures of half-year contracts between steel mills and automotive OEMs for the first half of 2025, with a discount of €80 per tonne compared with the second half of 2024.
Some contracts were heard done at €650-670 per tonne, compared with €730-750 per tonne in the second half of 2024, sources told Fastmarkets.
Initially, automakers were asking for a more substantial discount of €100-150 per tonne, Fastmarkets heard.
But in the spot market, European mills have been trying to push for higher prices recently.
“Mills are trying to increase spot prices in an attempt to bring down the gap with long-term contracts that they are currently negotiating with the automotive industry,” a second buyer source said.
Fastmarkets calculated its daily steel hot-rolled coil index domestic, exw Northern Europe at €565.00 per tonne on Friday, up by €2.50 per tonne week on week and by €3.33 per tonne month on month.
CBAM: Turkish industry could face scope 3 challenges
Turkey’s electric arc furnace-dominated steel industry is well-positioned to benefit from reduced emissions requirements under the EU’s Carbon Border Adjustment Mechanism (CBAM), says Çolakoğlu chief executive Uğur Dalbeler. However, Scope 3 emissions, tied to the transportation of raw materials and finished products, remain a challenge.
“Turkey is in a stronger position, not only because 75% of its steel production is EAF-based but also due to its over 15 million tonnes of HRC production capacity from EAF, with very low emissions and good experience and good [quality steel production] expertise, Dalbeler tells Kallanish.
The Turkish government has eased regulations for manufacturers to establish renewable energy capacities, aligning Turkey’s renewable energy ratio with that of Germany and Italy. This progress positions Turkey to achieve climate neutrality in Scope 2 emissions.
Although Scope 3 emissions remain a challenge, Turkey still holds a competitive advantage over countries like China, Japan, and Korea.
The primary hurdle to decarbonising the steel industry is securing funding for net-zero projects, Dalbeler says. Experts argue that while funding exists, the projects themselves are often not compelling enough. Wood Mackenzie estimates that achieving the 1.5-degree temperature reduction scenario globally will require $78 trillion, with 90% of energy derived from renewables – a target that seems improbable.
Furthermore, unresolved issues around clean hydrogen availability, storage, and CCUS utilisation persist. The IEA has downgraded CCUS’s role in achieving net-zero from 53% to 37% by 2050, though reaching the target remains feasible for the steel industry.
Dalbeler advocates a more pragmatic approach, emphasising efficiency improvements in production and processing to reduce CO2 intensity. “If we can increase yield in every step, we can significantly lower the CO2 intensity of the final product,” he explains.
He highlights the need to focus on the BF/BOF production route, as creating new EAF capacities is not a comprehensive solution due to limited scrap availability and the scarcity of high-quality ore for direct reduction.
“We need to concentrate on [decarbonising] the BF/BOF route of steel because creating new EAF capacities will not solve the problem. Availability of scrap is limited and the majority is only good for long products. High quality ore for direct reduction is also limited; therefore, we need to reduce BF/BOF emissions, especially as this type of steel production grows in India and Southeast Asia,” he notes.
Setting global CO2 emission limits per tonne of steel, akin to emissions standards for cars, could address both excess capacity and emissions issues. “There’s a significant difference between old and new-generation BFs. We need a global consensus on permissible CO2 emissions per tonne of steel. Anything exceeding this limit should not be produced or traded,” he emphasises.
Dalbeler also stresses the importance of global standards for measuring and standardising greenhouse gas emissions.
Rather than investing in new steelmaking capacities, he suggests prioritising the optimisation of existing facilities. This would enable funds allocated for new EAF projects to be redirected to more impactful areas.
Elina Virchenko UAE
Greece’s Sovel contracts Danieli for bar mill upgrade
Greek steelmaker Sovel has awarded Danieli Automation the order to modernise the entire electrical and automation system of its bar mill in Almyros, Magnissia, Kallanish notes.
The aim of the project is to increase production safety, stability and reliability, so the unit will be ready for the future, by replacing obsolete hardware equipment with new and modern Danieli Automation devices and advanced process controls, the supplier claims.
The unit is a single-strand bar rolling mill with slitting in a single line for medium bar diameters, and a double line with fast-finishing blocks, quenching, tail breakers and double twin channels for high-speed production of smaller sizes.
The project, complying with the European Machine Directive, will be implemented by August 2025.
Sovel is an electric arc furnace steel plant. It began operating as part of the Sidenor Group in 2001. In 2007, it commissioned a new direct scrap-feeding system, Consteel, which reduces energy used for pre-heating scrap. In 2022, Sidenor disclosed plans to install a 6 MW photovoltaic array at the Sovel plant.
Sovel produces concrete reinforcing grades in bars and spooled coils, wire rod, rebar merchant bar, and several other products for construction projects, for various industrial applications. It has a capacity of 1.2 million tonnes/year.
Greece produced 130,000 tonnes of crude steel in November, according to worldsteel data. January-November volumes amounted to 1.27mt compared to 1.09mt in the same period last year.
Svetoslav Abrossimov Bulgaria
Metinvest focuses on Finland, Sweden as new markets
Metinvest restructured its exports following the Russian invasion of Ukraine and has found new markets with the reopening of seaports, says chief operating officer Oleksandr Myronenko.
“First, we exported through Poland to the north, to the ports of Gdansk, Swinoujscie and others,” he told Ukrainian-based business magazine The Page. “There was also a logistics chain to the south, reaching the Romanian port of Constanta.”
“We primarily export iron ore to China and both iron ore and metal to Europe. Now we are even dealing to markets in northern Europe where we have never exported before – to Finland and a little bit to Sweden,” Myronenko said.
“They [Nordic customers] have posed a challenge as customers there are quite demanding and require very high-quality products. We have thus also started production of new types of products with increased iron content,” he added.
According to him, 2024 has been quite challenging since Metinvest did not anticipate such a drop in prices, which are currently 30-40% lower than forecast.
“In terms of steelmaking, the group managed to keep five blast furnaces operational – three at Zaporizhstal and two at Kametstal – along with the full range of rolled products. These plants have reached approximately 75% of their capacity compared with the pre-invasion situation. Considering the destruction of plants in Mariupol, Metinvest’s steel production now stands at around 35-40% of pre-war levels,” Myronenko noted.
Ukraine’s steelmakers are sustaining these production volumes thanks to the reopening of seaborne exports, Kallanish notes.
“We started the year with rather modest production expectations of around 1 million tonnes/month of iron ore,” Myronenko said. “However, the consistent operation of the ports ensured steady demand from Ukraine’s steelmakers, and by the end of the year we had reached 1.6-1.7m t/m. This represents 40-50% of capacity compared with 2021. Three of the group’s mining and processing plants are currently operating.”
The company was forced to suspend operations at Inghulets Iron Ore due to high tariffs for imported electricity during power outages. Given the specifics of the production chain and high energy costs, maintaining operations became inefficient, Myronenko continued.
“Central Iron Ore and Northern Iron Ore are operating quite well. Southern Iron Ore is severely impacted by power restrictions caused by missile attacks on Ukraine, forcing us to balance consumption,” he said. “We have simply suspended some of the equipment there.”
Svetoslav Abrossimov Bulgaria
China, Germany lift November global steel output
Global crude steel production rose 0.8% on-year in November to 146.83 million tonnes, supported by another rise in Chinese and German output, Kallanish notes from worldsteel data.
Chinese production grew 2.5% in November to 78.4mt, while Indian production rose 4.5% to 12.38mt. However, Japanese and South Korean output fell 3.1% and 3.6% respectively to 6.89mt and 5.19mt.
EU27 production rose 3.9% to 10.69mt, with German production growing 8.6% to 2.9mt. However, Italian and Spanish production dropped 4.4% and 2.5% respectively to 1.8mt and 1.02mt. French production grew 1% to 963,000t. The Netherlands saw output surge over 91% to 639,000t following Tata Steel’s Ijmuiden blast furnace revamp completion.
Turkish production inched up 0.7% in November to 3.01mt.
US output fell 2.8% on-year to 6.38mt but Brazilian production grew 1.9% to 2.77mt.
Russian production was estimated down 9.2% in November to 5.45mt and Ukrainian production was confirmed down 0.9% to 541,000t.
Crude steel output in the 71 countries monitored by worldsteel was thus down 1.4% on-year in January-November to 1.69 billion tonnes. Growth in India, the EU, Turkey and Brazil was insufficient to offset falling output in China, Japan, the US and Russia.
Adam Smith Poland
European HRC prices flat on seasonal slowdown
Trading was almost non-existent, with buyers and sellers holding back from making new deals, Fastmarkets understands.
Mills in Europe entered winter holiday breaks, and many market participants took leave starting on Monday December 23 and are planning to return after January 6.
Fastmarkets’ sources continued sharing mixed sentiment about the market development in the first quarter of 2025.
Some sources hoped for a price rebound in the first months of the next year mainly due to the limited import availability and the stronger reliance of buyers on domestic HRC, Fastmarkets understands.
This trend is expected to be supported by the new steel safeguard review, announced by the European Commission, which would additionally decrease the incentives to buy material from imports.
“I do not expect any significant change in the market in January, but in February and March, we will probably see some price increase based on restocking,” a buyer source told Fastmarkets.
However, many industry sources were skeptical regarding potential positive market development, with low demand remaining the main concern.
“A few years ago, when demand was better, domestic prices were going up despite the significant imports. But now, there is just no demand,” a second buyer source told Fastmarkets.
Recent news from the European automotive industry also indicated decreased demand for flat steel products.
German carmaker Volkswagen (VW) announced massive production cuts and staff redundancies in Germany by 2030, Fastmarkets reported.
Notably, a reduction in capacity of 734,000 units across German plants is planned before 2030, and the workforce will be reduced by more than 35,000 people across VW’s German locations by 2030.
Fastmarkets calculated its daily steel hot-rolled coil index domestic, exw Northern Europe at €565.00 ($588.37) per tonne on Tuesday, unchanged from the previous day.
The index was up by €3.87 per tonne week on week and by €2.50 per tonne month on month.
The latest official offers for February/March-delivery HRC from first-tier Northern European mills were heard at €600-630 per tonne ex-works or delivered, industry sources told Fastmarkets.
However, the price increases achieved in deals last week were minor, Fastmarkets understands.
Tradable values were reported within the range of €560-580 per tonne ex-works.
In Southern Europe, Fastmarkets calculated its daily steel hot-rolled coil index domestic, exw Italy at €562.50 per tonne on Tuesday, also unchanged from the previous day.
The Italian index was up by €2.50 per tonne week on week and by €2.92 per tonne month on month.
The Italian market was also quiet ahead of the Christmas holiday period.
Local suppliers were heard offering HRC for delivery in February and March at €580-620 per tonne delivered, which would net back to €570-610 per tonne ex-works.
Buyers’ estimations of the workable market level for such material were heard at €570-580 per tonne delivered, which equals €560-570 per tonne ex-works.
The imported HRC market was also quiet ahead of the holidays.