French, Benelux scrap prices increase

French and Benelux scrap prices are increasing this month, as expected, by €15-30/tonne ($16-32) depending on each mill’s different needs. Values are supported by strong international price levels and good export of containerised scrap towards India and Northern Africa at high prices. This is also supporting German values, sources tell Kallanish.

The European market and the current increases are said to be contradictory, however, and not in line with declining consumption and low sales of the finished long and flat products.

This month in the French and Benelux area, prices are mostly in line across the market with some mild fluctuations. E40 has reached €350-355/t delivered and E8 is at €350-360/t but €330/t for those mills that bought small tonnages of this grade. Demolition E3 is at €330-340/t while the lower E1C quality is fetching between €305-310/t delivered, sources suggest.

Natalia Capra France

Skoda Auto halts production amid components shortage

Czech carmaker Skoda Auto will suspend production at its plant in Kvasiny for at least a week, starting from 11 September, the company tells Kallanish. This is due to disruption in supply from a key parts maker in Slovenia, whose production was hit by recent flooding.

“Skoda Auto can confirm that the flooding in Slovenia has affected a subcontractor that supplies components for combustion engines (ICEs) of Skoda models as well as other brands within the group,” a Skoda spokesperson says. “Efforts are underway to fully restore production at this plant. At the moment, the subcontractor can only supply in limited quantities. The Volkswagen Group is deploying specialised staff to support the cleanup efforts on-site.”

According to the spokesperson, due to the disruption in the provision of components across the Volkswagen Group’s supply chain, shortages will also have a short-term impact on Skoda Auto. “However, production at the Mlada Boleslav plant is currently running without alterations,” she adds.

“Our teams are working diligently to minimise any potential impact and deliver as many cars as possible to our customers,” the spokesperson observes. “We are discussing all steps with our social partner, the KOVO trade union. We cannot comment on the implications for our plants or specific models and numbers due to the dynamic nature of the situation.”

The news of Skoda’s production stoppage comes about two weeks after Toyota’s Kolin plant was also forced to halt production. The company is short of parts from supplier Novares CZ Zebrak, whose warehouses suffered a severe fire. The shutdown at the Kolin plant will last until at least 15 September.

Czech passenger car production grew 14% on-year in June to 142,874 units, taking six-month output up 22% on-year to 738,454 units (see Kallanish passim).

Largest carmaker Skoda saw first-half output rise 32% to 464,353 cars, while Hyundai’s production grew 6% to 177,100 units and Toyota reported a 9% increase to 97,001 cars.

Svetoslav Abrossimov Bulgaria

Galv, CRC imports rise into Europe

Imports are playing a growing role in northwest Europe, especially for cold rolled and galvanized coil, with the region’s mills troubled by low domestic demand and increased energy costs.

According to statistics provided by a mill manager, imports have more than doubled over ten years. Imports of CRC in 2012 accounted for merely 15% of the EU’s CRC market. By 2022, the share had grown to 30%. For galv, the picture is similar, with a low share of 5-7% still in 2012, and more than 13% in 2021, with a rising trend. “The import share of CRC is now higher than that of plain hot rolled coil, which is at 25%,” he notes.

With a basic price of around €650/tonne ($696) for HRC, which may tick up slightly going forward, domestic mills are trying to keep prices for CRC towards €750, and for galv somewhat above. But this is becoming tougher against increasing imports at low prices, meaning lower offers will be found frequently.

The manager tells of imports of CRC currently available for €700/t cfr Antwerp. This is in line with Kallanish’s earlier findings of Indian mills claiming to sell CRC at $750-760/t cfr Antwerp. Small tonnages of 0.58mm Z140 galvanized coil were sold at $840-845/t cfr Antwerp, he adds.

“India currently has a domestic demand low, too, and they are trying to solve that problem here,” the manager says.

Christian Koehl Germany

French rebar market fails to bounce in September

No change is reported for the French rebar market since it resumed activity after the August holiday break. Sales continue to be sluggish and visibility poor, Kallanish hears from market participants.

Prices remain stable compared to last month, and large buyers remain on the fence.

Scrap prices in the country are on the verge of increasing, potentially helping to keep the price of rebar and other long products stable this month. However, rebar volumes are scant, and buyers lack commitment and confidence. Last month some orders came from infrastructure projects throughout the country. The private residential construction sector’s activity remains slow.

At the market reopening, both producers and distributors have low order books even though stocks at distributors and their clients continue to be thin. Like in July before the sector shut down for holiday, construction companies continue to buy only to cover immediate needs each day and there is no visibility for the month.

One distributor says that July was “an OK month” and August sales were slow both on the domestic and on the export market. Nearby European countries such as Germany were on holiday and very slow.

Natalia Capra France

Galv, CRC come under pressure in northwest Europe

Although some European coil mills have started trying to bring prices up from the low reached in summer, this may be harder to assert for cold rolled and galvanized than for hot rolled coil.

Apart from the obvious reservation on the demand side, domestic integrated mills are under pressure also from imports and from high energy costs. The price of HRC, despite efforts by northwest European mills to charge more, is basically sitting at around €650/tonne ($696). Traditionally, a premium of €80/t used to be common for CRC, and of around €100/t for HDG

A mill manager points out the structural problem of high energy prices in many European countries, which make additional processes more costly than before. He tells Kallanish that the traditional €80/100 premium is actually not sufficient to cover those extra costs. “We try at least to keep that premium up,” he says, but suggests the surcharge would actually have to shrink to attract buyers. “We’d be better off selling plain HRC,” he opines. Competition is especially hard against imports from countries with lower energy costs, he adds.

For a while in June/July, downstream, “there was no [premium] relation at all, people just tried to get their material sold”, a buyer at a distributor states. He says this is still the case, especially for service centres, “which are still selling off material at their intake price, sometimes less”. While this may be temporary, it does not help to stabilise prices in the medium term, he warns.

Christian Koehl Germany

ArcelorMittal accelerates investment in Mardyck

ArcelorMittal France has ordered a reversible 6-high cold rolling mill for processing high-grade non-oriented silicon steel strip (NGO) for electric motors. The equipment supplied by Austria’s Andritz will be part of the steelmaker’s new electrical steel facility in Mardyck, northern France.

Mardyck will see five new lines started in 2024 for the production of electrical steel for use in manufacturing engines for battery electric vehicles (BEVs) and hybrid vehicles. This involves a €300 million ($321m) investment (see Kallanish passim). The steelmaker is grouping all its electrical steel production at the Mardyck complex and at the plant in Saint Chély.

The new mill will roll up to 1,450mm wide strip to a minimum finished material gauge of 0.2mm, providing high roll force, roll torque, and bending forces at a relatively small work roll diameter, Andritz says.

“Along with the extensive process instrumentation and an exceptionally flexible cooling and strip-drying strategy, ArcelorMittal will receive the perfect solution to meet the challenging quality demands on the end product at a high production level,” the technology supplier says in a note. The equipment will be assembled and tested at its facility in Hemer, Germany.

Natalia Capra France

Blastr launches environmental impact assessment

Blastr Green Steel has seen the launch of the environmental impact assessment (EIA) procedure for its plant in Inkoo, Finland, Kallanish hears from the Norway-based greenfield venture.

The EIA programme is currently on public display for comments until 19 September. Until then, authorities as well as local residents, associations and other interested stakeholders can participate in the procedure by providing formal feedback to the coordinating authority, the Uusimaa Regional Development Centre.

“The preparation of the EIA programme has been a huge task, involving a wide range of experts from different fields. We have discussed the content extensively with various authorities, local organisations and other stakeholders, and taken their feedback into account in it,” says Antti Kaikkonen, managing director of Blastr.

The EIA programme forms the basis for the actual impact assessment, which is due to be completed in spring 2024. “Engineering is going forward, and the pre-feasibility studies are nearing completion. We aim to select next-phase engineering partners and suppliers for the steel plant and the hydrogen facility during the next months,” Kaikkonen continues.

Meanwhile, a spokesman for the company informs Kallanish that the mill will eventually need 7-10 TWh of CO2-free power to produce hydrogen and make ultra-low-carbon steel. Natural gas, or later possibly biogas, is used to add carbon content to steel (1-2%) and for drying in certain process phases, he notes.

Christian Koehl Germany

Celsa’s creditors make plans for takeover

The group of investment funds that could soon take over control of Spanish steelmaker Celsa have started attending meetings with authorities and trade unions to plan the future of the company.

This week they met with USOC, one of the largest trade unions in the area of Barcelona. During the meeting they stressed that a swift takeover was envisaged. They also said the person in charge of this transition will be Rafael Vilaseca, chosen by the funds as future president of the board of Celsa. Vilaseca is an executive with long-standing experience in the gas, energy and steel sector.

The Spanish press has also noted that the Rubiralta family, the current owners of Celsa, is still evaluating possible moves to appeal the latest court decision, but the options are very limited.

The next stage would be for the investment funds to present the request to take over the company to the Spanish government. The move needs to be approved by the authorities following a recent law regarding takeovers of strategic national company assets by foreign entities, Kallanish notes.

Emanuele Norsa Italy

H2 Green Steel raises €1.5 billion in equity

H2 Green Steel has raised €1.5 billion ($1.6 billion) in equity from an investor group led by Altor, GIC, Hy24 and Just Climate. The Swedish venture claims this is the largest private placement in Europe this year.

The private placement is co-led by new investor Hy24, together with existing investors Altor, GIC and Just Climate, Kallanish learns. The transaction involves new investors Andra AP-fonden and Temasek, plus a group of existing investors that include AMF, Cristina Stenbeck, Hitachi Energy, IMAS Foundation, Kinnevik, Schaeffler, Vargas and Wallenberg Investments holding company FAM.

The proceeds will finance the construction and development of H2GS’s greenfield steel plant in Boden, Sweden, where groundworks have been ongoing since summer 2022.
“The calibre of investors that are backing us is impressive. Some of the most professional institutions, investors and industrial companies globally are part of this round … and it proves the market demand for green steel,” says Henrik Henriksson, chief executive of H2GS.

Since launching in 2021, H2GS has raised more than €1.8 billion of equity in three financing rounds. The company closed its series A equity round of €86 million in May 2021 and announced the close of its series B1 round of €260m in October 2022.

Christian Koehl Germany

Northern European rod prices increase after quiet summer

Northern European wire rod prices have increased this week after a sluggish market throughout summer, sources say. Most participants eventually expect new hikes amid a rebound in demand and restocking this month.

“Most customers did not purchase new volumes during the summer, because there was no activity in the market, but now there are some signs that the situation is changing,” one trader from the Netherlands tells Kallanish.

Prices have increased between €15-20/tonne ($16-21).

Domestic transaction prices for drawing-quality wire rod are at €600/t ($641/t) ex-works and mesh-grade wire rod is at €620/t, sources say.

Producers are asking for €620/t ex-works, on average, for mesh-quality rod.

“The mills in Europe are trying to ramp up wire rod prices and we will see if there will be some new demand from customers,” another participant in the market notes. “Maybe there will also be some movement due to the traditional autumn restocking in September, after the summer break.”

Offers are heard from outside the EU at €570-580/t cfr Rotterdam, with small tonnages booked, he adds.

At the same time, European scrap values continued to decrease in August amid low demand. This is influencing the wire rod market, another participant notes.

German scrap prices decreased last month amid low demand. Old thick scrap sort 3 was at €300/t, while new scrap sort 2/8 was at €305/t. E40 shredded scrap was at €310/t. In Austria, prices for old thick scrap sort 3 were down to €310/t and new scrap sort 2/8 was at €320/t.

Italian drawing-quality wire rod remained at €560-580/t delivered at the beginning of September.

Svetoslav Abrossimov Bulgaria