Nordwest lifts steel revenue in first quarter
Nordwest Handel, one of two big purchasing cooperatives for steel, hardware and household technology in Germany, lifted steel segment revenue in the first quarter by 8% on-year to €393 million ($447m).
The organisation attributes the strong increase to higher prices in comparison with Q1 2024, but also to a higher tonnage sold, which it does not specify. Nordwest handles roughly 1 million tonnes/year of steel.
Despite weak construction activity, it lifted import volumes and forged new partnerships with suppliers, Kallanish understands. Nordwest is a partner in the pan-European purchasing cooperative Astedis. It however maintains that 2025 will remain a difficult year for steel distribution, on account of the critical construction sector weakness.
The Q1 increase was foreshadowed by sales growth of 4.4% in the second half of 2024. However, full-year 2024 remained below the preceding year by a considerable 11%, with sales of €1.509 billion, due to a drop in demand and prices, Nordwest says.
Christian Koehl Germany
Fives installs combustion system at Megasa’s SN Maia
Technology supplier Fives tells Kallanish it has completed the upgrade of the combustion system at Megasa’s SN Maia Siderurgia Nacional Maia plant in Portugal.
The oxygen enrichment project, carried out on an existing billet reheating furnace, included new technology aimed at reducing natural gas consumption. The upgrade also involved the potential for on-site oxygen production, lowering operational costs.
The so-called PREMIX equipment injects additional oxygen into the combustion air duct upstream of the burners. This process increases oxygen levels to 25%, resulting in around 6% fuel savings.
The technology was entrusted to Fives’ Spanish unit, which had previously modified the combustion system of the same furnace.
“By introducing additional oxygen, we are improving combustion, which allows for higher temperatures without increasing fuel usage. This contributes to cost savings and lower CO₂ emissions,” explains Fives Spain’s research & development manager, Oiane Gerrikagoitia.
The technology was designed to be easily integrated and have minimal impact on production.
“We were able to perform the majority of the installation while the furnace was still running, ensuring that production continued smoothly and without significant delays,” adds Koldobika Tafalla González, technical director at Fives.
SN Maia is the largest rebar production plant operated by the Megasa Group.
Todor Kirkov Bulgaria
UK Steel welcomes linking with EU carbon markets
Industry association UK Steel has welcomed the agreement by the EU and UK to work towards formally linking their Emissions Trading Systems (ETS), as well as to improve the EU quota for UK sections, Kallanish notes.
It says this will enable better access to the UK’s biggest export market, with 75% of UK steel shipments going to the EU, worth nearly £3 billion ($4 billion) annually. It points out it has advocated the linking of the carbon markets since 2019, noting the UK’s minimal size and illiquidity.
The move will exempt UK steel exports to the EU from Carbon Border Adjustment Mechanism (CBAM) costs and administrative burdens.
“We understand that the improved EU steel quotas will relate to arrangements in relation to the EU’s steel safeguards, which will ease export restrictions for steel angles and heavy sections,” its statement notes.
The European Commission says the EU and the UK agreed to safeguard historic tariff-free trade in steel products under category 17. The EU will thus make a legislative proposal for a country-specific quota for UK steel in category 17 – angles and sections – under the current safeguard.
Without linkage or the improved market access in place, UK producers faced the prospect of increased trade friction, UK Steel notes. EU importers would have had to pay CBAM levies and face tight safeguard quotas on UK steel products – costs that would likely be passed back to UK exporters or result in lost market share.
Gareth Stace, director general at UK Steel, says: “UK Steel welcomes the formalised plan to link the UK and EU Emissions Trading Schemes and new, improved market access. This will be a significant step in reducing trade frictions in steel with the EU, our biggest export market, by ensuring equivalent carbon costs and easier exports. It also eliminates the risk of costs from the EU Carbon Border Adjustment Mechanism, where the burden particularly falls on SMEs.”
“Crucially, linking the schemes lowers costs for the sector and provides long-term security, particularly if UK ETS prices were to exceed those in the EU in the years ahead, making linkage all the more important for competitiveness,” he concludes.
Carrie Bone UK
Overcapacity weighs on Italian stainless flats
May has seen a continued decline in demand in the Italian stainless flat steel market, participants tell Kallanish.
The performance of the coil, tube and sheet markets indicates a persistent state of low sales volumes and pricing pressure. Organisations are indicating reduced order volumes, quicker lead times, and a generally pessimistic forecast. Downstream companies are experiencing significant financial difficulties.
“It is quite challenging to avoid operating in the negative [margins],” states a service centre representative.
Northern European service centres share this view. Prices are falling faster in Italy than in northern Europe, making the situation graver. In comparison to northern European coil and sheet, Italian pricing is approximately €30-50/tonne ($33-56/t) lower.
“Today, we cannot cover costs as we’re receiving cold rolled coils at €2,400/t and over,” the Italian service centre source comments.
A local stainless steel processor notes the substantial supply across the value chain in contrast to the notably weak demand for flat products. The influx of Asian coil being received in the upcoming weeks is likely to exert additional pressure on stock levels and reduce buying of domestic coil.
CRC prices in Italy are at an average of €2,300/t delivered. Steel processors are currently receiving CRC previously bought at a price of €2,400/t delivered and are selling sheet within the range of €2,500-2,550/t.
Hot rolled coil with rough edges is currently set at €2,100/t delivered.
“The market is compromised until August,” the steel processor believes.
Meanwhile, a European mill source also expresses a negative outlook but anticipates that in the latter half of 2025, the market may see fewer imports, due to the start of CBAM on 1 January 2026.
He sees higher stock levels, particularly in Italy. Declining profitability and decreasing prices are hindering processors’ ability to protect the value of their inventory. The Italian processors and mill source note that prices are stable in China and agree that Europe should see some improvement by September or October.
According to Italian steel trade association Assofermet’s latest market note, the oversupply is hindering the anticipated recovery in price levels.
“The limited lead times observed among European producers indicate a lack of depth in their order books. The first-quarter financial results from the main continental producers indicate negative results, which further restricts the potential for price reductions, even in light of the market’s current weakness,” it states.
Mills in Europe are decreasing their prices for June and July delivery. From the high point of the range recorded recently, EU stainless coil values have experienced a decline of over €100/t, while order books continue to face significant pressure (see Kallanish 20 May).
Natalia Capra France
UK and EU reach new deal to set out post-Brexit relations
The Prime Minister’s Office of the UK has announced that the UK and the EU have reached a new deal aimed at setting out post-Brexit relations following extensive negotiations over the last six months. The deal will support UK businesses and jobs, the Prime Minister’s Office said.
In addition, the UK’s steel exports will be protected from the new EU rules and restrictive tariffs, through a bespoke arrangement for the UK, resulting in £25 million savings per year for UK steel exporters. Around 75 percent of UK steel exports go to the EU, a market worth nearly £3 billion.
Meanwhile, closer co-operation on emissions through linking the respective UK and the EU Emissions Trading Systems will improve the UK’s energy security and prevent businesses being hit by the EU’s carbon tax due to come in next year.
“It’s time to look forward. To move on from the stale old debates and political fights to find common sense, practical solutions which get the best for the British people,” Keir Starmer, the UK prime minister, commented.
Gareth Stace, director general of the UK-based trade association UK Steel, said, “UK Steel welcomes the formalized plan to link the UK and EU Emissions Trading Schemes and new, improved market access. This will be a significant step in reducing trade frictions in steel with the EU, our biggest export market, by ensuring equivalent carbon costs and easier exports. It also eliminates the risk of costs from the EU Carbon Border Adjustment Mechanism, where the burden particularly falls on SMEs. Crucially, linking the schemes lowers costs for the sector and provides long-term security, particularly if UK ETS prices were to exceed those in the EU in the years ahead, making linkage all the more important for competitiveness.”
Cleveland-Cliffs CEO tells automakers to shop for steel at home
Gonçalves stood before 1,500 delegates at the Great Designs in Steel Conference on Wednesday May 21 in Novi, Michigan, and chided some automakers for sourcing material – particularly steel – from overseas and for allowing light vehicle import penetration to creep above 50%.
“You created the issue – time to fix it,” he said.
Gonçalves praised domestic steelmakers’ ability to meet demand domestically. Cleveland-Cliffs, in particular, has underutilized capacity, “and we have the ability to grow fast.”
“We have the capacity to supply the steels,” he said. “Engineers, your bosses haven’t been good to you when they move production outside of your country.”
Global supply chains for basic materials like steel might have had a cost advantage at one point, but efforts by the second administration of US President Donald Trump are necessarily chipping away at those in favor of domestic production, Gonçalves said.
“The steel industry and the auto industry, it’s our job to…understand what kind of self-inflicted wounds we are creating for ourselves if we don’t accept this basic truth.”
