German engineering sentiment improves but remains shaky
The mood in Germany’s mechanical and plant engineering sector improved somewhat at the start of 2025 but remains very mixed, according to the latest survey by association VDMA conducted in late March.
Just over a quarter (27%) of the total of 940 companies now rate the current situation as very good or good, compared with 22% in January, Kallanish hears. By contrast, 30% rate the situation as poor or very poor. The outlook has also brightened somewhat: almost one in three companies expect the situation to improve in the next six months, versus only 22% in January.
However, “this may only be a snapshot”, cautions VDMA chief economist Ralph Wiechers. The survey was completed before 3 April, so the latest tariff announcements by the USA and the reaction of the countries affected are not yet reflected in the results.
As a positive factor, the drop in interest rates should also have a favourable impact on the industry. In addition, the industry will also be able to benefit from Germany’s €500 billion special fund for infrastructure investments – if bureaucracy and long approval procedures do not slow down the investment climate.
North America, as the most important overseas market, has lost ground. In January, 42% of companies rated sales opportunities in North America as good or very good. But, with a view to the next six months, North America received only 29% of responses in March.
Germany, on the other hand, was able to catch up considerably. Almost one third of companies expect a positive domestic business trend, versus only 13% in January.
South European HRC price dips, liquidity slows ahead of Easter
Domestic European hot rolled coil prices inched lower in South Europe April 16, amid quieter market conditions ahead of the Easter break.
Market participants pointed to ongoing uncertainty among buyers across the value chain, sharing expectations for near-term stability around the Easter break.
“There are a lot of options for commodity grade HRC but there is no demand as all the big customers are so uncertain,” a South European trader said.
“There are a lot of traders being aggressive making it difficult to make sales, but nobody is looking for larger volumes anyway,” the trader added.
A distributor pointed to similar levels of hesitancy for larger inquiries from buyers.
“Buyers remain cautious due to uncertain quota availability, ongoing market volatility and weak demand discourages bookings,” the distributor said.
“Domestic mills offer shorter lead times than imports, but some exporters are offering additional discounts from Indonesia. [However,] we see no major import offers at the Port of Antwerp,” the source added.
In addition, outlooks across Europe remained largely mixed, with sources across the market continuing to cite the ongoing trend of supply-side-driven price increases, rather than any notable change in demand-side fundamentals.
Platts assessed HRC in Northwest Europe stable at Eur650/mt EXW Ruhr on April 16, and in Southern Europe at Eur625/mt EXW Italy, down Eur5/mt day over day.
Platts assessed imported HRC in Northern Europe at Eur545/mt CIF Antwerp, stable day over day, and in Southern Europe at Eur535/mt CIF Italy.
Automotive sector woes threaten French car components producers
The French automotive sector is facing significant pressure from stringent EU environmental regulations, ambitious energy transition targets, declining competitiveness, and the US imposition of a 25% tariff on car imports.
These factors are prompting car manufacturers to explore the option of sourcing more affordable components from outside the EU, threatening domestic manufacturing.
French passenger car and light commercial vehicles (LCV) combined production decreased by 10% last year compared to 2023, says French carmakers’ association Organisation Internationale Des Constructeurs Automobiles (OICA).
The country’s automakers produced 910,243 passenger cars in 2024, reflecting a decrease of 11%. LCV output in 2024 declined 7% to 447, 458 units. Overall production stood at 1,357,701 vehicles, down from 1,505,079 in 2023.
According to local automotive component makers association FIEV, the situation in Europe and France is concerning. National production falling to 1.3 million vehicles in 2024 reflects a collapse of 63% since 2002 and 38% since 2020, FIEV president Jean-Louis Pech warned during a senate hearing last week.
More than 70% of FIEV members believe their production in France and Europe is in danger. 55% have already recognised the possibility that French and European automakers may start sourcing components from lower-cost competitors outside of Europe, according to a survey conducted in March.
In 2024, employment in the car component manufacturing sector in France decreased to approximately 56,000 jobs, reflecting a 17% decline relative to 2019 levels.
Since January 2024, approximately 7,300 jobs have been eliminated or are at risk due to restructuring initiatives or site closures. At the European level, 42% of suppliers anticipate operating at a loss in 2025, FIEV says in a document obtained by Kallanish.
The period of high inflation from 2022 to 2024 significantly widened the competitive disparity between European and Asian suppliers. Besides the US 25% car import duty, European equipment manufacturers are suffering from a general decline in vehicle production and slow offtake of electric vehicles in Europe.
The association is calling for the implementation of a baseline requirement of 75-80% of “made in Europe” content in vehicles. It is also seeking solid European measures to enhance the competitiveness of the automotive sector, especially amid the shift towards electric vehicles.
This can be achieved by executing a European investment strategy modelled after the American IRA. This includes measures such as lowering energy costs, decreasing mandatory salary deductions and production taxes in France, and simplifying access to financing, particularly for small and medium-sized enterprises.
German rebar prices climb further
Germany’s rebar mills have given their prices another push in April, which appears to have been accepted in the market, Kallanish notes.
Attempts to bring up base prices over recent months received limited success, not reaching the €400/tonne ($455) target until March. That mark has now been passed, owing probably to the prolonged shutdown of the liquid phase at Riva Hennigsdorf.
The mill near Berlin stopped steel production at the end of December and introduced short working hours for its staff. Production was not restarted at the end of March as originally planned, with the suspension continuing until further notice.
Buyers currently see the base price at €420/t. Adding the fixed size extra of €265, the delivered price would be at €685/t.
“With Henningsdorf out, two of the other producers were able to assert higher prices, and I believe prices are trending up further,” one manager tells Kallanish. Paradoxically, the trend could also be stopped by Riva’s German subsidiary as soon as it decides to rejoin the improved market and restart production, the manager adds.
Virgin steel is out of date. It’s the quality of steel that matters
Civil society organisation SteelWatch has called the ongoing argument over the UK’s need to produce “virgin steel” via blast furnaces outdated, with investment in fact needed in electric arc furnaces to produce competitive low-emission steel, Kallanish learns.
It says that following the recent government intervention in British Steel, the UK needs to “invest forward, not backward for competitive low-emissions steel”.
“This argument about ‘virgin steel’ is out of date. It’s the quality of steel that matters. In the future industry, electric arc furnaces powered with renewable electricity will provide a full spectrum of steel products, with a mix of recycled scrap and some low-emissions iron that can be bought in briquette form,” says Caroline Ashley, executive director at Steelwatch.
The organisation calls for an industrial strategy that protects jobs, cuts CO2 emissions and modernises the sector to ensure a renewable-powered and therefore competitive economy.
“Blast furnaces have been around for 300 years and a decent transition can’t happen in a matter of days. But what really matters is to use this reprieve to plan transformation of UK steelmaking to a competitive and low-emissions future. That will mean investing in electric arc furnaces and getting past the myths that preserving the UK’s steelmaking capacity is the same thing as preserving its blast furnaces – it’s not,” she adds.
SteelWatch highlights the UK’s ample scrap resources for EAF-based production, with green iron available from “long-standing trading partners like Sweden, Canada and Australia”. It also notes the US uses EAFs for 70% of its steelmaking, with 90% of new steelmaking capacity announced also being EAFs.
It disagrees with the notion that BFs are needed for quality steel, highlighting Volvo and Mercedes procuring EAF-based steel, while Sheffield Forgemasters supplies the defence industry with steel produced via this route. In France, railway operator SNCF has already entered into contracts for greener steel, made in an EAF.
To remain competitive, the UK must modernise its production infrastructure, it adds.
Ashley adds: “Emotions in the UK are high and there is a lot of confusion that, for the UK to ‘make its own steel’ it must ‘keep its own coal-based blast furnaces … UK-based electric arc furnace is just as much ‘UK steel’ as any other.”
“The economies and industries of the future, including steelmaking, will be powered by renewable energy. If Britain wants to lead, it must invest in the future, not double down on a fossil-fuels based past. A shift to green steel is not about giving up on British Steel, but upgrading it, taking workers along every step of the way,” she notes.
The organisation also notes the decline in domestic steel production started before the Paris Agreement and net zero targets were introduced.
Tenova and Coolbrook join forces to drive carbon-free steel production
Italy-based Tenova, a Techint Group company specialized in innovative solutions for the metals and mining industries, has announced that it has signed a strategic partnership agreement with Finland-based transformational engineering and technology company Coolbrook to develop joint solutions that integrate both companies’ technologies to drive carbon-free production of iron, steel and other metals.
Initially, the companies aim to develop Coolbrook’s proprietary RotoDynamic Heater™ (RDH) technology, resulting in the replacement of the burning of fossil fuels with clean electricity in high-temperature heating processes in the iron, steel and broader metals industries. Once completed, Tenova and Coolbrook plan to expand the collaboration to other applications across the metals industry.
Coolbrook’s RDH™ Technology could reduce carbon emissions by over 2.4 billion metric tons annually. Coolbrook aims to establish the RDH™ technology as an industry standard by 2030.
Oman, Netherlands pave way for large-scale green hydrogen deliveries from MENA to Europe
The Joint Development Agreement (JDA) was signed by eleven parties in total, including Hydrom, Oman’s national green hydrogen orchestrator; OQ, Oman’s global integrated energy group; leading Dutch steelmaker Tata Steel Nederland; German logistics and transportation company Hamburger Hafen und Logistik AG; and hydrogen transport network Hynetwork.
The agreement paves the way for the large-scale import of liquid hydrogen into Europe. It was signed during the state visit of the Sultan of Oman to the Netherlands. Major industrial participants, including Tata Steel Nederland, the Port of Amsterdam and Ecolog are key enablers of this new trade corridor.
The agreement outlines several critical elements essential to the corridor’s development, including:
- plans to establish a centralized facility for liquefaction, storage and export at the Port of Duqm — one of the key hubs for green hydrogen production in Oman.
- pricing and delivery arrangements for liquid hydrogen to offtakers in the greater Amsterdam region, as well as in other parts of the Netherlands and Germany, with EnBW serving as the aggregator.
- coordinated development of dedicated infrastructure along the corridor: This includes export and import terminals at the ports of Duqm, Amsterdam and Duisburg (Germany), along with multiple hydrogen distribution channels — both gaseous and liquid — such as gas pipeline networks, rail links and barge transport utilizing the Netherlands’ extensive canal system.
The first large-scale deliveries of green hydrogen to Europe are scheduled to commence “by 2029,” according to a release by Tata Steel Nederland on April 16.
“This agreement represents a landmark moment in our commitment to clean energy,” Sophie Hermans, the Dutch Minister for Climate and Green Growth, said in the release. “By linking Omani green hydrogen with Europe’s energy needs, we are advancing our shared climate goals and creating a sustainable energy pathway.”
Clean, affordable energy at the core of EU’s green transition
The energy-intensive nature of steel production leads to high electricity consumption. With the switch to electric-arc furnaces (EAFs), it would be expected that the sector’s electricity consumption would only increase.
Currently, EU steelmaking is mainly based around blast furnace-basic oxygen furnace (BF-BOF) production, which is less energy-intensive than the EAF-route — electricity costs account for less than 4% of the costs in the BF-BOF production route. For EAF mills, electricity can be around 20% of the total.
But the new green steel capacities in Europe will be mostly represented by EAFs and direct-reduced iron (DRI) modules, with more than 50 million tonnes of new steelmaking capacity expected to come online in 2026-2027, according to Fastmarkets estimates.
Direct and indirect electrification methods, such as hydrogen produced from electrolysis, would be the most efficient pathway toward decarbonization, but this would also increase the energy costs for the steel industry.
Green hydrogen — hydrogen that is produced with renewable energy — is a vital element required if the DRI-EAF route is to become a net-zero emitter.
But producing green hydrogen requires significant investment and massive increases in renewable energy. Steelmakers said they would require governmental support to ease the burden of the capital expenditure necessary for such projects.
Sources in the European steel market familiar with the matter agreed that using hydrogen to feed DRI plants is currently too expensive to be competitive. Hydrogen prices in Europe are currently reported by sources around €5-8 per kg.
The price of hydrogen needs to be “around €2.50-3.00 per kg to make it commercially viable for steelmaking,” a steel producer in Northern Europe told Fastmarkets.
The Middle East and North Africa (MENA) region has the potential to produce and export hydrogen at competitive prices due to low energy costs and access to ports.
“The price of hydrogen in the EU is about $7-8 per tonne, while in the Middle East it can be around $2 per tonne, or even less” a trading source in the MENA region told Fastmarkets.
The MENA region has an announced capacity of 242 GW of green hydrogen, according to the Institute of Energy Economic and Financial Analysis (IEEFA).
These green hydrogen projects are progressing slowly and are mainly export-focused, but significant opportunities exist to redirect them toward domestic use, according to IEEFA.
Tata Steel to benefit from the agreement
According to Fastmarkets’ data, Tata Steel currently has the capacitgy to produce 7.5 million tonnes per year of crude steel at its IJmuiden site in the Netherlands, and it produces hot-rolled, cold-rolled, hot-dipped galvanized and pre-painted coil, along with tin-plated products.
By 2030, the company plans to replace its largest blast furnace, BF7, with a DRI furnace and an EAF. The company’s BF6 and its other coke-making plants will be closed, resulting in an 80% reduction in CO2 emissions from 2030 to 2045, by which time the company will be “CO2 neutral.”
Tata Steel Nederland is planning to adopt a hydrogen route for its steelworks in IJmuiden, so access to green hydrogen deliveries from Oman will be beneficial for the producer.
“In our role as a large potential buyer, we can contribute to the development of a sustainable economy based on green hydrogen in our region. In this way, we not only make our own production process more sustainable, but we also help to build a new ecosystem together with other companies,” Hans van den Berg, Tata Steel Nederland’s chief executive officer, said in the April 16 release.
Steel heavy plate prices remain flat across Europe on poor demand
Trading activity in the Italian market was dull, with mainly hand-to-mouth bookings reported in the past week.
Achievable prices for commodity-grade steel heavy plate in Italy were estimated by buyers at €630-650 ($716-739) per tonne ex-works, against offers at €660-670 per tonne for April-May rolling.
Deals were reported at €640-650 per tonne ex-works.
Some mills were mulling higher prices for May-June rolling, around €680-700 per tonne ex-works, but buyers said that such prices were only possible for project business and were “totally unachievable” in spot sales.
The price of slab feedstock for plate production was stable around $500-520 per tonne CIF, with no grounds to raise plate prices, and unsupportive demand, a buyers source said.
As a result, Fastmarkets’ weekly price assessment for steel domestic plate, 8-40mm, exw Southern Europe, on Wednesday was €640-650 per tonne, unchanged since mid-February.
June-shipment heavy plate from Asia was offered to Italy at €580-590 per tonne CFR.
An offer of s355 heavy plate from India was available at $680 per tonne FCA at Antwerp. This price was, however, deemed too high by European buyers.
Market sources also said that there were fewer offers of commodity grade heavy plate offers from South Korea, after new safeguards were announced. South Korean suppliers were heard to be focusing on premium plate deliveries for use in making wind-towers.
Northern Europe
In Northern Europe, the situation was similar, with traded volumes in the spot market being low, market sources said.
One German producer, which traditionally focuses on project business, was offering heavy steel plate with lead times around six weeks at €750-790 per tonne ex-works. But this price was not considered workable for the spot market.
Another German supplier maintained its offer price for steel plate at €690-720 per tonne ex-works from one location, and at €680-700 from another.
Buyer sources estimated achievable prices for commodity grade heavy plate, such as s235 and s275, in the range of €680-690 per tonne, even from suppliers which normally sought higher prices.
As a result, Fastmarkets’ weekly price assessment for steel domestic plate, 8-40mm, exw Northern Europe, was €680-700 per tonne on Wednesday, stable week on week.
Steel raises the roof for Manchester United Football Club’s proposed new stadium
Old Trafford is reaching the end of its 115-year life and Manchester United Football Club has announced plans to build a new stadium adjacent to it, with steel being one of its core components.
Manchester United co-owner, Sir Jim Ratcliffe, set the British architect Foster + Partners the brief to create the finest football stadium in the world. That means putting the fans first and providing clear sightlines to the pitch and brilliant acoustics.
To achieve this, Foster + Partners plans to build a huge canopy made of glass and steel and held up by three masts standing at 200m tall, making it the tallest structure in Manchester.
These masts will be fixed around the main stadium to enable the canopy to cover the stadium and a public plaza around it, twice the size of London’s Trafalgar Square. This vast glass and steel canopy will shield fans from the sun and rain, harvest rainwater and generate solar energy. Once complete the new stadium should hold 100,000 seats, making it the largest stadium in the UK and the second largest stadium in Europe, after Barcelona’s Camp Nou.
No start date has been given for the scheme, but the plan is to get it built in five years, halving the typical 10-year timeline for a UK stadium construction, this is because the design uses modular construction. Many of its 160 prefabricated components will arrive via water on the nearby Manchester Shipping Canal.
Foster + Partners has also been charged with redeveloping the whole of the Old Trafford Stadium District, which covers the land the club owns around the existing stadium. This could lead to the construction of up to 17,000 homes. Lord Foster, Founder and Executive Chairman of Foster + Partners, said: “As a proud Mancunian, I am passionate about the chance to rebuild on Manchester’s great industrial heritage, creating a vibrant new mixed-use community, served by highly sustainable and improved transport links, providing homes and jobs for the local community, all catalysed by a world-class stadium for the world’s most famous football team – Manchester United.”
There are still a lot of questions to be answered surrounding planning and paying for the scheme, but one thing is for certain, steel will be at the core of Manchester United FC’s ‘New Trafford.’
