EU HRC market looks towards bearish downturn
“Mills want more money but can’t get it, and even if our customers’ stocks are on a lower level, they can still buy on short notice in the market,” said a German service center source. The same source also cited that due to the shorter-term nature of customer procurement in the current market, contracts for the second half of the year remained murky, with July too far out for discussions.
Discussing carbon-accounted steel, the same source said, “Nobody is willing to pay for it, but it is hard to ask for Eur200/mt of additional costs [for a certificate] when we are already negotiating over every Eur5/mt for the underlying steel price. It is too competitive between mills and service centres.”
A distributor source referred to quieter spot conditions, noting that “offers have disappeared, and buyers have stepped back. Our sales are at 20% of last year. There are no talks on prices, just quantities.”
The same source pointed toward rumors of reductions in offer levels from both domestic and Turkish mills, adding further downward pressure to the market, and that any potential support from high power prices or the new German Government would not be felt for some weeks.
However, despite the bearish pricing talks in the market, one mill source remained steadfast that prices and consumption were not rapidly falling, though they did concede that they had dropped prices slightly.
“There is no panic, and volumes for us are still there, but we are hoping for more market demand … The smaller parties are being squeezed out,” the source said.
Similarly, a southern European trader offered sideways expectations for prices, referring to supply-side pressure as lending support to domestic prices.
“We are not sure why people expect prices to drop; service centers aren’t buying imports, the exchange rate is going down, and key blast furnaces are out. We see no adjustments on prices,” the trader said.
Platts assessed HRC ex-works Italy at Eur620/mt stable day over day and HRC CIF Southern Europe at Eur525/mt, down Eur5 day over day.
Platts assessed HRC in Northwest Europe at Eur640/mt EXW Ruhr and Eur540/mt CIF Antwerp, both stable day over day.
Buyers’, sellers’ expectations vary in European steel HRC market
Sell-side sources reported offers from key suppliers varying within the range of €660-680 ($738-760) per tonne in Northern Europe, and estimated workable prices within the range of €640-660 per tonne ex-works.
At least two key mills were said to have their order books well-filled and therefore had no reason to reduce prices.
Nevertheless, the highest booking price heard on Tuesday was €650 per tonne ex-works.
At the same time, customers were less optimistic about the market trend, adding that trade was now hand-to-mouth, both from mills to distributors and from distributors to final customers.
A buy-side source reported a deal at $640 per tonne ex-works from a re-roller in Northern Europe.
Fastmarkets’ calculation of the daily steel hot-rolled coil index, domestic, exw Northern Europe, was €648.00 ($724.13) per tonne on Tuesday, up by €1.25 from €646.75 per tonne on May 12.
In Italy, HRC offer prices varied within the range of €600-620 per tonne ex-works, unchanged day on day, while trading activity was said to be weak.
As a result, Fastmarkets’ daily steel hot-rolled coil index, domestic, exw Italy, was unchanged on Tuesday at €610 per tonne.
Indonesia-origin HRC was heard to be available at €520 per tonne CFR, slightly up from €510-520 per tonne earlier in May, which was due to the US dollar strengthening versus the euro, according to market sources.
Turkish HRC was offered at €550-570 per tonne CFR, depending on supplier, while Indian offers were heard at €570-575 per tonne, with some lower figures possible for a firm bid.
In Northern Europe, Vietnamese material was heard available at €540-545 per tonne CFR.
Turkish coil from an integrated producer was offered at €585 per tonne CFR. And Chinese material, including anti-dumping duty, was available at €550-560 per tonne CFR.
Published by: Vlada Novokreshchenova
German-Australian project tests green iron potential
A project launched by German materials research institute BAM intends to enable large-scale production of green iron based on various fine ores.
As an alternative to the established direct reduction-based steelmaking route, the project will test hydrogen-based reduction in a rotary furnace near the mining site, Kallanish understands. This would also avoid pelletising and drying at the steelmaking site.
To carry out the project, named SuSteelAG, BAM has forged a partnership with Australian miner Fortescue. It will refine ores with low iron content of 55-70%, which have so far not been utilised feasibly, for industrial use by German mills.
The iron, reduced and pelletised in Australia, would be shipped to the steelmakers, which avoids conversion of energies upon arrival, and would bring down demand for renewable energy in the steelmaking countries, BAM explains. This then will lead to intelligent energy and raw materials trading between Australia and Germany, resulting in green steel production in Germany, the institute notes.
The project will run until the end of 2027.
Christian Koehl Germany
Political focus turns to idled Scottish steel plants
Following the recent UK government intervention to avert the collapse of British Steel, the political focus has now turned to Scotland, where the Dalzell plate mill remains idled, Kallanish learns.
Writing in The Sunday Times, Prime Minister Keir Starmer said that he was “horrified” by Dalzell being idle, while the Scottish National Party has no “industrial strategy to bring work to those mills.”
Starmer called on John Swinney, First Minister of Scotland, to bring the steelworks back online. The articles notes that the workforce at Dalzell has been furloughed on 80% pay, despite a 2016 deal brokered by the Scottish government which saw the Dalzell and Clydebridge steelworks transferred from Tata Steel to Liberty, backed by a £7 million ($9.2m) loan.
Amid the runup to the Holyrood election in 2026, Starmer, as leader of the Labour party, is seeking to oust the SNP.
The debate over support of the Scottish plants has gone on for some time and now intensified following the recent take-over of the Scunthorpe site. Over £100m of taxpayer money has been spent supporting day to day running and raw material purchases for Scunthorpe.
In 2024, amid the then ongoing talks with Tata Steel regarding Port Talbot, Lib Dem MSP Willie Rennie wrote to the Secretary of State for Business and Trade, Jonathan Reynolds, urging the UK government to step in, warning the Dalzell plant was “teetering on the edge”.
The Companies House listing for Liberty Steel Dalzell Ltd shows it has not filed full accounts since 2019.
Earlier this year, the Community union published a report calling for investment in Dalzell which would allow it to meet growing demand from the offshore wind sector.
In response to Starmer’s criticism, Community assistant general secretary Alasdair McDiarmid said: “We welcome the Prime Minister’s intervention and his call on the Scottish Government to take action to secure the long-term future of Dalzell plate mill. This is a site of huge strategic importance and potential, and should be at the heart of an industrial strategy for Scotland.”
“As we highlighted in our recent Steel Reforged report, with the right investment and upgrades, Dalzell could help meet the burgeoning steel plate demands of the offshore wind industry and the UK defence sector. It is unacceptable that Dalzell remains idle, and the SNP government in Holyrood cannot continue to sit on their hands and do nothing,” he added.
Carrie Bone UK
Proposed TRQ changes ‘fall short’, says UK Steel
The proposed changes to tariff rate quotas following the review by the Trade Remedies Authority (TRA) “fall short” of what is required, says industry association UK Steel.
The TRA has recommended that country-specific caps be imposed on certain steel product categories (see separate story).
The association says the amendments “go some way to address the fears raised” but fall short of what is required given the scale of the challenge the UK industry is faced with.
It adds that this increases the urgency for the UK government to develop and implement a robust trade defence mechanism to replace steel safeguards which expire in June 2026. It cites that global excess capacity remains the most critical trade issue, at a time when steel demand continues to weaken.
Global overcapacity forecasts have risen to a potential 721 million tonnes in 2027, it notes.
“The outcome of the TRA’s safeguard quota review does little to effectively defend the UK steel industry from the vast amounts of surplus steel looking to be offloaded onto our shores,” UK Steel director general Gareth Stace says in a statement seen by Kallanish.
“The TRA went as far as it could go within the confines of the unnecessarily restrictive UK regulation. Time and time again we find ourselves hamstrung because UK rules are more restrictive than both the EU’s and what is required by the WTO.”
Stace adds that the UK is increasingly an outlier in adhering to outdated trade rules that are at the expense of the national interest.
“It is now time for Government to step up and swiftly replace ineffective steel safeguards with a robust trade defence mechanism of quotas designed to suit the reality of the market and the world today. There is no need to wait until June 2026. Strong defence must be a core component of the upcoming Steel Strategy to ensure the market stability and certainty that are essential for investment,” he concludes.
Carrie Bone UK
UK’s TRA recommends caps on some steel quotas
The UK’s Trade Remedies Authority (TRA) has recommended that country-specific caps be imposed on certain categories of steel following its safeguard tariff-rate quota (TRQ) review, Kallanish learns from a UK government press release.
Following the review launched in March, the TRA has now published its statement of intended final determination.
This proposes that country-specific caps should be imposed on the residual quota in the following categories:
- Category 4 (metallic coated sheet): 40%
- Category 7 (non-alloy and other alloy quarto plate): 40%
- Category 13 (rebar): 40%
In Category 4, imports in the residual quota come almost exclusively from Vietnam and Republic of Korea, accounting for 62% and 38% respectively. It notes that although Korea’s import share in Category 7 in the period of investigation (POI) was 80%, only 52% of the overall residual quota was utilised. In Category 13, imports in the residual quota come almost exclusively from Algeria and Egypt at 86% and 14% respectively.
It recommends these caps because there is a risk of other countries being crowded out and not being able to access the residual quota in these categories, the TRA says.
It does not propose country-specific caps for category 5, 16 and 21.
The caps will come into effect from 1 October to allow steel importers time to adjust.
However, where residual quotas have been exhausted in the POI, they will now benefit from the planned 3% increase from 1 July.
It also does not intend to recommend a reduction in the TRQs, a reduction in the liberalisation rate, or a further increase in the quotas for individual categories.
The TRA has also proposed further changes to the allocation of the TRQs; this includes the removal of the carry-over facility, where unused quotas are made available in the following quarter. This was because in the vast majority of quota allocations, utilisation rates were considerably under 100%, quarter by quarter. While countries with a country-specific quota should no longer have access to the residual quota in the final quarter.
Carrie Bone UK
Assofermet: steel demand-boosting measures needed in EU amid declining demand
Italian distributor and service center association Assofermet called May 13 for action to stimulate steel consumption across the European Union, as demand declines due to intense global competition and the urgent need for the industry to transition towards decarbonization.
“The EU steel Industry … is certainly experiencing one of the most significant historical moments due to the continuous growth of new generation sites in third countries capable of producing steel at lower cost … and is facing epochal challenges of transformation towards decarbonization that, not only should be recognized, but should be supported and backed by the European Commission with effective, rapid and concrete measures,” Assofermet said in a statement.
European manufacturers are finding it increasingly difficult to maintain their market position and produce steel at competitive prices, in particular with new generation steel production sites emerging in third countries. The decline not only threatens the steel industry itself but also jeopardizes the entire supply chain, including key sectors such as automotive, construction and infrastructure.
While the organization welcomed the EC’s Steel and Metals Action Plan as a necessary and important document signaling that Europe is ready to act to protect strategically important industries, it proposed several targeted measures aimed at boosting demand, including tax credits, non-repayable loans, and reduced VAT rates for steel products.
Echoing steel producers Assofermet advocated for the extension of the Carbon Border Adjustment Mechanism to cover certain steel-intensive finished products, which would help level the playing field for EU manufacturers against cheaper imports as well as introducing an obligation to favor the use of machinery, vehicles and products with high steel content produced in the EU in the bloc’s public procurement tenders.
Assofermet underlined the crucial role of end-users, as stimulating demand in sectors that rely heavily on steel would not only support Europe’s manufacturing base but also foster its economic growth.
In its proposal, the trade body outlined the need for a robust domestic supply chain, especially highlighted during crises like the COVID-19 pandemic, when the EU relied on imports to meet demand.
Platts assessed the southern European domestic hot-rolled coil price at Eur620/mt ($690/mt) EXW Italy on May 12, stable over the day.
EU steel consumption was expected to decline by 2.3% year on year in 2024 to 127 million mt due to the recession in the two major steel-consuming sectors, namely construction and automotive, European steel association Eurofer said in its latest report published in February.
OECD: Latin American steel industry in critical state due to growing global overcapacity
Speaking at the “Unfair Trade and its Impact on Latin America” event organized by the Latin American Steel Association (Alacero) and the National Chamber of the Iron and Steel Industry of Mexico (Canacero) held last week in Monterrey, Mexico, Anthony de Carvalho, head of the steel unit at the Organization for Economic Co-operation and Development (OECD), stated that the Latin American steel industry is in a critical state due to growing global overcapacity and market distortions both generated by subsidies from China, which are 10 times higher than in OECD member countries, and subsidies from other Southeast Asian economies.
Projecting that global overcapacity will reach 721 million mt in 2027, Carvalho said, “It could wipe out small and medium-sized steel industries in every country.” Despite that, there plans to continue adding production capacity, mainly in China, India and Southeast Asia, he noted.
The OECD official went on to state that unfair competition from China, where domestic steel demand has declined, leading the country to increase exports, not only affects the steel industry but also impacts key sectors such as automotive and household appliances. He pointed out that in 2024 China exported more than 110 million mt of finished and semi-finished steel, 14.2 million mt of which were destined for Latin America.
“Steel industries with market-based practices are suffering from the lack of a level playing field. We are experiencing overcapacity around the world. This is reflected in plant closures, thousands of layoffs, and economic disruptions. We are facing an existential crisis for the steel industry, and we must take action to preserve the viability and sustainability of the business,” Carvalho concluded.
