Buyers in wait-and-see mode in EU steel hollow sections market after steel plants resume operations

Steel hollow sections prices in Europe fell in the week to Wednesday September 6, with buyers staying on the sidelines despite steel mills pushing for higher prices after their summer shutdowns.

Fastmarkets’ weekly price assessment for steel sections (medium) domestic, delivered Northern Europe was €770-800 ($859- 892) per tonne on Wednesday, down by €20 per tonne from €790-820 per tonne.

Similarly, Fastmarkets’ weekly price assessment for steel sections (medium) domestic, delivered Southern Europe was €770-800 per tonne on Wednesday, down by €20 per tonne from €790-820 per tonne on August 30.

Despite mills targeting price rises, demand and sentiment remain weak, sources said.

But raw materials costs are expected to rise and that could stimulate trading activity, sources said.

“We expect prices to go up in the coming days, based on higher input costs. Prices are unworkably low at the moment,” a buyer source said.

But other buyers were skeptical that any upward price movements would be achievable given the weak end-user demand.

Fastmarkets’ calculation of its daily index for steel scrap HMS 1&2 (80:20 mix) North Europe origin, cfr Turkey, was $369.01 per tonne on Wednesday, stable week-on-week.

Published by: India-Inés Levy

European steel HRC market quiet as mills fail in push for price rises

Prices for steel hot-rolled coil in Europe were broadly stable on Thursday September 7, with sentiment turning pessimistic because of subdued demand and an expected influx of imports starting in October, industry sources told Fastmarkets.

The recent attempts by European steel mills to push for higher prices were broadly unsuccessful because there was no support from end-user demand.

In general, tradeable prices for HRC in northern Europe, reported by buyer sources, remained within the range of €630-650 ($676-697) per tonne ex-works, in line with what was seen in the market before the summer stoppages.

This was some way below official offers that were pushing toward €700 per tonne ex-works.

Mills in the region were offering October-November delivery coil, sources said. But buyers were postponing purchases, booking only “what’s strictly necessary” and were assessing the market situation.

Sources said that the wait-and-see stance taken by the market could be partially explained by expectations of large tonnages of cheaper imports, waiting at European ports to be customs-cleared, ready to flood the European market from October 1, when the new EU import safeguard quota period begins.

“According to our estimate, more than half-a-million tonnes [of HRC] is sitting in ports and awaiting the new allocation,” a trading source in Germany told Fastmarkets. “Those volumes were bought at very cheap prices, way below €600 per tonne CFR, so when this material enters the market, domestic prices [for HRC] will be under heavy pressure.”

Fastmarkets calculated its daily steel hot-rolled coil index, domestic, exw Northern Europe, at €648.75 per tonne on September 7, up by €0.15 per tonne from €648.60 per tonne on September 6.

The index was down by €1.25 per tonne week on week but up by €2.92 per tonne month on month.

And Fastmarkets’ calculation of its corresponding daily steel hot-rolled coil index, domestic, exw Italy, was €634.17 per tonne on September 7, down by €0.83 per tonne from €635.00 per tonne on September 6.

The Italian index was also down by €0.83 per tonne week on week and by €2.08 per tonne month on month.

Buyers’ estimates of achievable prices were reported at €640-650 per tonne delivered, which would net back to about €625-635 per tonne ex-works.

Mills were pushing offers closer to €700 per tonne delivered (€685 per tonne ex-works), but such prices were not achieved in deals.

Trading in Italy’s market was also quite dull, and buyers believed that there was no room for a substantial price increase in September.

“There were hopes for restocking, but buyers are postponing purchases to late September-early October. Everyone wants to see the situation with imports – it will be a deal-breaker for the market,” a trader in Italy said.

New import offers from an Indian supplier for December-arrival HRC were heard around €600 per tonne CFR to Italy.

Taiwan-origin material with October-November shipment was on offer to the country at a similar price of €600-610 per tonne CFR.

South Korea-origin HRC for October-November shipment was offered at €620-625 per tonne CFR to Italy.

And finally, several sources said that Ukraine-origin HRC was on offer to Italy at €600 per tonne CFR, for late October-early November shipment.

Published by: Julia Bolotova

Bearish sentiment inhibits trading in Southern European long steel market

Most market participants returned to Southern Europe’s rebar and wire rod markets in the week to Wednesday September 6, at the end of the summer holiday slowdown, but trading remained subdued due to mixed sentiment and weak demand, sources told Fastmarkets.

But while some were bearish and forecast a short-term decline in prices, others said demand, and therefore prices, would rise steadily through September as restocking activity picks up.

Fastmarkets price assessment for steel reinforcing bar (rebar) domestic, exw Italy was €645 – 655 ($692-703) per tonne on Wednesday, narrowing downwards by €15 per tonne from €645-670 last week.

If demand does not rise, steel mills could intensify output cuts, Fastmarkets understands.

“During the coming week, and the next one, rebar prices may continue to decrease because the market is flat, and exports are very low,” a buyer source said.

And a producer source told Fastmarkets little would be happening in the short term:

“The market is still asleep from the summer holidays,” the source said.

While market conditions may not support immediate price rises, producers remain reluctant to reduce prices further.

“[Prices] cannot move down further,” a second producer source said. “Prices are already heavily below production costs [and] any further decreases would unavoidably push mills to stop production [to avoid further] losses because they are already too big.”

Fastmarkets’ price assessment for steel reinforcing bar (rebar), domestic, delivered, Spain was €640-650 per tonne stable week on week.

In the Southern European wire rod market, meanwhile, prices were also unchanged amid subdued trading activity, sources said.

And Fastmarkets’ weekly price assessment for steel wire rod (mesh quality), domestic, delivered Southern Europe, stayed at €580-600 per tonne on Wednesday.

Published by: India-Inés Levy

HRC buyers in Europe postpone restocking amid lack of clarity on price trend, slow consumption

Hot-rolled coil buyers in Europe have postponed restocking amid mixed views on the future direction of prices and insufficient end-user demand, sources told Fastmarkets on Tuesday September 5.

A lack of support from end-user demand remained the main obstacle to the HRC price increases announced by some producers at the end of August, sources said.

European mills are aiming for €700 ($755) per tonne ex-works or delivered, depending on the region, for October-delivery HRC.

At the same time, some producers have continued selling HRC at €650-660 per tonne ex-works, sources said, with transactions at this level reported in Germany this week.

Buyer sources indicated that the tradable level in Northern Europe was €640-660 per tonne ex-works.

But trading sources reported HRC offers from Italy to Germany at around €680 per tonne delivered.

Buying activity remained sluggish on September 5, however, with buyers postponing purchases, citing uncertainty over the direction of prices, Fastmarkets understands.

“For a sustainable HRC price rebound we need stronger consumption. Even [the steel] mills are not convinced they are going to see an increase in [the number of] deals. Buyers are very hesitant and are not rushing into bookings,” a trading source in Germany said.

“Basically, the current prices in the [HRC] spot market are practically the same as before the summer closures; maybe we managed to get around €10 higher in some deals, but not more. The market is static despite some bullish attempts [by the EU mills],” a mill source said.

Fastmarkets calculated its daily steel hot-rolled coil index domestic, exw Northern Europe at €655.33 per tonne on September 5, down by €3.84 per tonne from €659.17 per tonne on September 4.

The index was, however, up by €4.94 per tonne week on week and up by €9.50 per tonne month on month.

At the same time, Fastmarkets’ calculation of its corresponding daily steel hot-rolled coil index domestic, exw Italy, was €635.42 per tonne on September 5, down by €2.91 per tonne from €638.33 per tonne on September 4.

The Italian index was stable week on week but down €0.83 per tonne month on month.

Italian buyers were also in no hurry to make any bookings, with several sources suggesting that restocking activity would not start until closer to the end of September.

“Buyers are testing the market. Obviously, the increases some mills are aiming for are unrealistic,” a buyer source said.

An integrated mill in Italy was said to be offering October-delivery HRC at €700 per tonne delivered (€680-685 per tonne ex-works), but no trades were reported at that level.

Buyers said the achievable level was around €625-640 per tonne ex-works.

Import offers from India and South Korea for October-November shipment were reported at €610-630 per tonne CFR to Italy, but those prices levels were not considered competitive by European buyers, especially given the long lead times and high safeguard-related risks for some origins.

Published by: Julia Bolotova

Poland breaks ground on offshore wind tower factory

Poland’s Industrial Development Agency (ARP) has broken ground together with its partners, Spain’s GRI Renewable Industries and Poland-based Baltic Towers, on a new offshore wind tower factory in Gdansk, northern Poland.

The plant will annually produce over 150 towers designed for the largest planned wind turbines with a 15MW capacity and is likely to consume substantial steel tonnages. Its commissioning is scheduled for mid-2025.

“Offshore wind is currently one of the fastest growing energy sectors. The dynamic growth driven by European energy policy, the energy transformation processes being implemented in Poland, and the adopted act on the promotion of electricity generation by offshore wind farms all aim to significantly increase the share of renewable energy in energy generation,” ARP says in note seen by Kallanish. “Such conditions justify the investment decisions, which not only meet market demand, but also contribute to increasing energy security in Poland and Europe.”

Poland’s Supreme Audit Office said last year Polish authorities have taken insufficient action on developing Poland’s offshore wind power sector (see Kallanish passim). Offshore wind power is a new sector in Poland that is touted to see significant investment in the coming years and eventually supply power to the national grid. Construction of the required infrastructure will consume substantial steel tonnages.

A year prior, Polish steelmakers identified onshore wind power as the only viable power source for steelmaking, amid spiralling traditional energy costs. This will also likely extend to offshore power once it is developed.

Wood Mackenzie said last year growth in the offshore wind market is set to explode, with wind tower tonnage getting heavier, meaning more demand for steel. Almost $1 trillion is predicted to flow into the market over the next decade. By 2031, the average tower will be nearly three times heavier in comparison to a decade before. Offshore wind towers will need nearly 500% more steel in 2031 compared to 2022 demand levels.

Adam Smith Poland

New PPGI manufacturer emerges in Ukraine

Polysteel, a newly established pre-painted steel manufacturer based in Bila Tserkva, in the Kyiv region of Ukraine, began production in August, after the company was relocated from Kharkiv due to the Russian invasion, Kallanish learns from the firm.

“We were on the verge of commencing production [in Kharkiv] within a few weeks when the full-scale invasion began [on 24 February 2022]. As a result, we had to swiftly relocate under the relocation programme,” a company representative says.

The colour coating line, supplied by Australia’s Bronx Group, has an annual capacity of 100,000 tonnes.

Currently, the company is targeting a monthly production of 5,000t and aims to reach full capacity by the end of next year.

Polysteel primarily sells its pre-painted galvanized coil (PPGI) to domestic markets but also has plans to expand export sales to Europe.

The Ukrainian firm intends to use Turkish-origin galvanized coil as its feedstock. The company points out that despite Russia’s blockade of major ports in Ukraine, the inflow of steel from Turkey has continued uninterrupted.

Elina Virchenko UAE

EU coil price hike attempts falter

Northwest European coil mills’ latest price hike announcements are neither in line with each other, nor very convincing, according to regional buyers.

“We do hear of hikes being announced but they do not play a role in direct negotiations,” a manager at a German distributor tells Kallanish. He says the first signals came from Italian mills, then from a pan-European producer, and then Nordic mills followed up. “I hear that [another player in western Europe] is pondering [a hike],” he adds. “But, indeed, only pondering, not more.” He says the hike attempts were of between €20/tonne and €30/tonne ($21.50-31.25).

A manager at a Benelux fabricator tells of a more ambitious announcement from a big mill group, a €50/t increase, which he calls “bewildering, in view of the obvious meagre activity on the market”.

According to the German manager, the lowest point was reached at around €630/t ($677) for hot rolled coil from northwestern mills, or €20 less for HRC from Italy or eastern Europe. Most buyers still see current HRC prices at around €650/t, give or take €20.

A buyer at a German processor says he hears of “modest upward adjustments, with prices of €650-680, and trending towards €700.” But those figures are making their way mostly indirectly by word of mouth. “I have not heard official announcements from the northwestern European mills so far,” he adds.

Another buyer at a service centre has also not heard of official announcements and dismisses all hearsay. “There are always rumours, but, effectively, there is no move,” he observes.

Christian Koehl Germany

ArcelorMittal reattempts European longs offers hike

Market sources confirm to Kallanish that ArcelorMittal is announcing higher target prices for long products across Europe, in a bid to recover some of the margin loss prompted by increased scrap and energy prices over the summer.

New offer levels are reported to be at €40/tonne above the latest available quotes for all commodity grades, as well as for new monthly and quarterly contracts.

Demand for longs in Europe remains relatively slow, though steelmakers believe that stock levels in the supply chain are depleted and are therefore optimistic that a rebound could be seen soon. “Confidence should come back to the market as we have seen several consecutive quarters characterised by a low demand scenario, something we have not seen since the 2008-2009 crisis,” one source says.

Northern European and Italian rebar prices have remained more or less stable since the beginning of June, according to Kallanish. In late June, ArcelorMittal raised its offers, but this increase was not accepted by the market.

Emanuele Norsa Italy

Turkish steel producers call for govt help to combat massive growth in imports

The Turkish Steel Producers’ Association (TÇÜD) has called for government intervention to help the country’s steel industry after a significant increase in imports overshadowed an uptick in domestic crude steel production.

Steel production in Turkey was up in July for the first time in 14 months, but the share of steel imports also pushed up significantly, the association said.

Turkish crude steel output increased by 7.70% month on month in July, to 2.9 million tonnes, according to TÇÜD data, but over the first seven months of 2023 output was down 13.3% year on year to 18.8 million tonnes.

And Turkey’s wire rod imports increased by 93.30% in the first seven months of the year, TÇÜD said.

Turkey imported 464,862 tonnes of wire rod in January-July under HS code 7213, 87.39% more than the 248,068 tonnes imported in the same period of 2022, according to the Turkish Statistical Institute (TÜIK).

TÇÜD said steel imports from China were up by 84% over the first seven months of the year and said help was need to combat the rise in imports. Hot-rolled flat steel imports under HS code 7208 alone increased by 203.83% to 1,270,983 tonnes in January-July 2023, compared with 418,324 tonnes imported in the same period of 2022, according to TÜIK.

TÇÜD general secretary Veysel Yayan told a local newspaper in Turkey that that steel investments in the Persian Gulf — especially in Saudi Arabia and Iran — would give producers there an energy cost advantage over Turkish steelmakers.

Consequently, he added, the Turkish steel sector needs more competitive energy prices, along with protective measures to limit the amount of cheap imports coming into the country.

Energy costs for steelmakers in Turkey are higher than for steel producers in the Gulf and those in Europe, Yayan said.

The Saudi Arabian steel industry appears to be consolidating under government ownership, with Saudi Basic Industries Corp (SABIC) recently announcing the sale of its steel subsidiary Hadeed SABIC to the country’s Public Investment Fund, which is also purchasing 100% shareholding in AlRajhi Steel Industries from Mohammed Abdulaziz AlRajhi & Sons Investment Company (Rajhi Invest).

Demand for steel in Saudi Arabia is expected to grow significantly due to the country’s Saudi Vision 2030 mega projects.

Published by: Serife Durmus

Slow demand drags on European HRC prices; rebound seen unlikely

The European market for steel hot-rolled coil remained quiet on Wednesday September 6, with mills making an unsuccessful push for higher prices, sources told Fastmarkets.

Although buyers have gradually come back to the market after their summer holidays and have started to inquire for tonnages, traded volumes of HRC remained low.

“We have an impression that most [steel service centers] are trying to reduce their stocks because there is strong competition between them. So there is not much restocking going on in the market now,” a trader from the Benelux area told Fastmarkets.

Leading European steelmakers kept their official offers for October-delivery HRC at €700 ($752) per tonne ex-works, but this figure was “unachievable,” according to buyer sources.

“It is not possible to consolidate higher prices [for processed HRC] in downstream sales, so €700 [per tonne ex-works for HRC] looks far away from reality,” a source from a steel service center in Germany said.

Buyer sources indicated that the tradable price in Northern Europe was €640-660 per tonne ex-works. One mill from the Benelux area was reported selling small tonnages of HRC at €650 per tonne ex-works.

Most market sources said that slow consumption was the major obstacle to a sustainable HRC price rebound. In general, they put their hopes on price stabilization in the near term.

Fastmarkets calculated its daily steel hot-rolled coil index domestic, exw Northern Europe at €648.60 per tonne on September 6, down by €6.73 per tonne from €655.33 per tonne on September 5.

The index was also down by €1.61 per tonne week on week but up by €2.77 per tonne month on month.

And Fastmarkets’ calculation of its corresponding daily steel hot-rolled coil index domestic, exw Italy was €635.00 per tonne on September 6, down by €0.42 per tonne from €635.42 per tonne on September 5.

The Italian index was down by €0.83 per tonne week on week and by €1.25 per tonne month on month.

Buyers’ estimates of achievable levels were around €625-650 per tonne ex-works.

A mill in Italy was hoping for €700 per tonne delivered (€680-685 per tonne ex-works), but slow consumption and low downstream prices made such prices unrealistic.

Meanwhile, buying interest for imported coil in Europe was low due to long lead times and safeguard-related risks.

“There are significant tonnages of import HRC waiting to be customs-cleared for the fourth quarter, sitting in European ports. The risk of having to pay the 25% import rate, due to [a complete take-up of EU import] quotas, makes buyers hesitate to buy,” a trading source in Europe said.

Import offers from India, South Korea, Japan and Taiwan for October-November shipments were reported at €610-630 per tonne CFR to Italy.

Published by: Julia Bolotova