European HRC prices inch upward on limited imports, improved interest among buyers
Fastmarkets calculated its daily steel hot-rolled coil index domestic, exw Northern Europe at €588.75 ($614.17) per tonne on Wednesday, up by €0.31 per tonne from €588.44 per tonne on Tuesday January 28.
The index was up by €9.25 per tonne week on week and by €23.75 per tonne month on month.
Mills in Northern Europe were almost fully booked for the first quarter of the year, and only limited volumes were available for March-delivery material, Fastmarkets understands.
HRC offers for April/May delivery were heard at €620-630 per tonne ex-works, with some rumors in the market that mills could try to achieve even higher levels.
On Wednesday, no major deals were heard in the Northern European market.
Fastmarkets’ sources estimated the workable market level at €580-600 per tonne ex-works.
A distributor source based in Germany told Fastmarkets that two to three weeks ago, it looked impossible for the market to reach such levels, but now prices were moving up slightly.
Trading has also improved slightly, according to sources.
Fastmarkets calculated its corresponding daily steel hot-rolled coil index domestic, exw Italy at €587.50 per tonne on Wednesday, up by €5.00 per tonne from €582.50 per tonne on Tuesday.
The index was up by €9.17 per tonne week on week and by €25.00 per tonne month on month.
Local sources described the Italian market as less active.
According to a buyer source based in Italy, very few transactions were heard recently.
“Stocks are currently high. Most players are waiting to see how the market would develop, especially after the new steel safeguard review is over,” the buyer said.
The source added that real consumption in Italy was expected to remain low in the next months, and only apparent steel consumption could increase on some restocking if additional safeguard measures were imposed.
An integrated mill in Italy was heard offering end-March delivery material at €610-620 per tonne delivered, which would net back to €600-610 per tonne ex-works.
According to a second buyer source, the producer has started to offer HRC at €620 per tonne ex-works.
“There is almost zero appetite for import bookings. Thus, little by little, whoever needs to buy HRC buys domestically and pays €590-600 per tonne ex-works in the most recent deals,” the second buyer said.
Fastmarkets’ sources estimated the workable market level for domestic HRC to be €580-590 per tonne ex-works.
In terms of imports, Turkey was heard offering HRC to Italy at €560-590 per tonne CFR, including the anti-dumping duty, Fastmarkets understands.
However, according to industry sources, large volumes of around 30,000 tonnes could be negotiated at lower levels. Bids for such tonnages were heard at €540-550 per tonne CFR Italy.
Asian suppliers were heard offering HRC at €560-570 per tonne CFR Italy, but interest among buyers remained limited due to the trade risks.
EU records first production growth in 3 years
The EU recorded in 2024 its first annual crude steel produciton growth since 2021, but output still remained below the Covid-stricken year of 2020 as financial difficulties hit certain steelmakers.
EU crude steel produciton increased 2.6% on-year in 2024 to 129.49 million tonnes, Kallanish notes from worldsteel data.
Largest regional producer Germany saw production rebound 5.2% on-year in 2024 to 37.2mt, although this came from a multi-year low base in 2023. Output remained below pre-Covid tonnages; however, it surpassed 2020 and was the highest since 2019, with the exception of the post-Covid rebound year, 2021.
Second-largest producer Italy fared much worse, seeing crude steel output drop 5% in 2024 – from an already-low base – to 20.01mt, amid continuing production difficulties at the Taranto steelworks, one of Europe’s largest. This was the lowest production figure since 2009.
France saw 2024 output rise 7.6% to 10.76mt, but from a multi-year-low base, with 2023 seeing a blast furnace fire take capacity offline. Spanish output rose 3.3% to 11.82mt, the highest since 2019 except for 2021.
EU output last year was also boosted by the return to operation of the blast furnace at Ijmuiden, which boosted Netherlands output 36% to 6.37mt, the highest since 2019 except for 2021. Belgian output rose an estimated 21% to 7.1mt, also the highest since 2019 except for 2021. Polish output grew an estimated 10% to 7.08mt but from a multi-year-low base.
Amid production stoppages at various Liberty Steel plants, crude steel production fell in Czech Republic, Romania and Hungary. In the first of these countries, output plunged 25% to 2.55mt, as activity at its largest steelworks, Ostrava, ground to a halt and the plant was put up for sale.
In Romania, output dropped an estimated 16% to 1.36mt – Galati is Liberty’s only remaining operational plant in Central and Eastern Europe. Hungarian output fell to an estimated 240,000t, down 50% versus 2023 and versus 1.5mt in 2020.
European steelmakers’ association Eurofer has been lobbying relentlessly for tighter EU steel import restrictions and an EU steel and industrial policy amid increased costs and declining competitiveness in the bloc. The new European Commission, which started its term in December, is currently working on both issues.
EU Competitiveness Compass eyes cheaper energy, greater coordination
The European Commission presented its Competitiveness Compass initiative on Wednesday, which foresees a tailor-made action plan for the steel sector, as well as plans to bring down energy prices and introduce European preference in public procurement.
The initiative aims to make the EU market competitive based on recommendations issued by the much-lauded Draghi Report published last September, Kallanish notes.
Over the last two decades, Europe has not kept pace with other major economies due to a persistent gap in productivity growth, the Commission notes. It must act urgently to tackle longstanding barriers and structural weaknesses that hold it back, it adds.
The Commission wants to drive development and industrial adoption of AI in key sectors; promote advanced materials, robotics and space technologies; and remove red tape and risk that is preventing new companies from emerging and scaling up. Companies will benefit from one single set of rules wherever they invest and operate in the Single Market, the Commission says.
The Clean Industrial Deal will aim to make the EU a competitive manufacturing location while simultaneously promoting decarbonisation. An Affordable Energy Action Plan will help bring down energy prices and costs, while an Industrial Decarbonisation Accelerator Act will extend accelerated permitting to sectors in transition.
The Compass refers to a new range of Clean Trade and Investment Partnerships to help secure supply of raw materials from across the globe. Within the internal market, the review of the Public Procurement rules will allow for the introduction of a European preference in public procurement for critical sectors and technologies.
Amid the enablers identified by the Commission, a Horizontal Single Market Strategy will modernise the governance framework, removing intra-EU barriers and preventing the creation of new ones. The Commission will also introduce a Competitiveness Coordination Tool, which will work with Member States to ensure implementation at EU and national level of shared EU policy objectives.
Adam Smith Poland
EUROMETAL survey: Europe sentiment improves, inventories foreseen declining
Global sentiment in European distributors’ association EUROMETAL’s latest, January survey indicates a slight improvement in current activity, although future activity, stock level and pricing expectations remain largely unchanged.
Although the three customer segments indicated stable current activity, the global sentiment indicator also includes the perspectives of steel experts that are not accounted for in the individual customer sector categories. This contributed to the sentiment improvement, EUROMETAL tells Kallanish.
Notably, the flat steel service centres distribution segment expects slight decreases in both activity and stock levels in the next three months.
By responder activity, those serving the automotive sector see slightly improved current activity and expect a slight decline in stock over the next three months. Survey respondents serving the construction, energy, manufacturing, packaging and tube sectors also see a slight improvement in current activity. Except for construction and energy, these segments also expect a slight decline in stock.
In terms of geography, respondents in France, the Nordics and Visegrad countries see slightly improved current activity, with the latter two also expecting a slight decline in stock over the next three months. The UK+Ireland see a slight deterioration in current activity, while Turkey expects higher stock levels and activity in the next three months. Pricing is seen remaining stable all round.
EUROMETAL divides the survey replies into three sets – “customer sector”, meaning association member type; “customer region”; and “responder activity”, referring to the end-use sector served.
Adam Smith Poland