European CRC, HDG prices under pressure from slow demand

European prices for cold-rolled and hot-dip galvanized coil inched slightly lower in the week to Wednesday September 6 amid weak demand, sources told Fastmarkets.

In Southern Europe, local producers were aiming for €750 ($806) per tonne EXW for CRC and €770-780 per tonne EXW for HDG.

Mills in the region could largely offer coil for October delivery.

Buyers, however, estimated tradable values lower at €730-740 per tonne EXW for CRC and €750-760 per tonne EXW for HDG coil.

Continuing demand from end-use sectors, including automotive and construction, was the major stumbling block for a price rise, market sources said.

Restocking mills are hoping for an increase in demand that is likely to happen only in the second half of September and will be limited, sources said.

“Most buyers have sufficient stock and in fact are trying to lower their inventories. My impression is that due to low activity in the construction market and threatening downturn in automotive sector nothing spectacular will happen. Besides high interest rates don’t stimulate investments,” a trading source in Europe said.

Fastmarkets’ weekly price assessment for steel CRC domestic, exw Southern Europe was €740-750 per tonne on Wednesday, down by €10 per tonne from €750-760 per tonne the week before.

The corresponding weekly price assessment for steel HDG domestic, exw Southern Europe was set week at €760-770 per tonne on Wednesday, down by  €10-20 per tonne week on week from €770-790 per tonne.

Import offers for CRC and HDG were largely stable during the assessment week, sources said.

Asian suppliers were offering material for shipment in mid-October/early November, which would mean arrival would be in November and December.

One mill from South Korea was offering CRC to Southern Europe at €685 per tonne CFR.

Japan-origin CRC was on offer to Southern Europe at €695-700 per tonne CFR.

A Vietnamese supplier was said to be aiming for $830-840 per tonne CFR for 0.5mm HDG with z100-120 coating, for October shipment.

Published by: Julia Bolotova

UK launches safeguard extension review

The Trade Remedies Authority (TRA) has initiated an extension review of the UK safeguard measure on 15 categories of steel products, Kallanish notes.

The measure is due to expire on 30 June 2024. The review will recommend to the Secretary of State for Business and Trade if the safeguard measure should be extended by up to two further years to 2026.

Interested parties have until 19 September to register their interest on the public case file.

The safeguard measure was transitioned from the EU after the UK left the bloc. Unusually, the UK has pre-empted the EU by launching its extension review first. EU steelmaking representatives have in recent months voiced their concerns over the possibility that the bloc will choose not to extend safeguards beyond mid-2024, while the EU’s Carbon Border Adjustment Mechanism only comes into force in January 2026.

Adam Smith Poland

Swedish fabricator Proplate lifts revenue, prepares investment

Proplate Oxelösund AB, a Swedish manufacturer of complex steel parts and assemblies for industries, lifted 2022/23 fiscal year revenue by 18% on-year to SEK 429 million ($39m). This is double the figure of three years ago and results in a net income of SEK 15.4m, Kallanish hears from the company.

It notes that its performance defied the challenges arising from a shortage of materials following Russia’s invasion of Ukraine, along with general price increases in areas such as electricity, transport, steel and packaging materials.

With a strong presence in the crane manufacturing sector in Europe and the US, the company says it is preparing further investment in its production facility in Sweden. Last year, it carried out several investments, including new office premises, expansion of the painting shop, and new training premises. It also expanded its capacity in the area of high-strength steels especially for the German market, including a blasting machine, welding robot, CNC machine and paint box (see Kallanish passim).

Proplate underlines its focus on long-term partnerships with customers that include Liebherr, Kobelco, Manitowoc, Toyota Material Handling, Epiroc, and Metso Outotec. These partnerships have helped to secure increased sales from existing customers, while also building new customer relations in Europe and the US, Proplate notes.

Proplate’s production facilities are located southwest of Stockholm. They are directly connected to the neighbouring mill of SSAB, one of its steel suppliers and also a customer for its mining equipment.

Christian Koehl Germany

West Midlands signs UK Steel Charter

West Midlands metro mayor Andy Street has signed the UK Steel Charter, making it the first combined authority to commit to using UK-made steel wherever possible in key regional projects.

The West Midlands is home to at least 15 sites manufacturing, processing and handling steel, including Marcegaglia’s Oldbury site, currently under refurbishment, which produces welded steel tubes.

Marcegaglia UK acquired the Oldbury site in 2021 and is currently undertaking a £32 million ($40m) investment programme. This will create up to 70 more jobs in the West Midlands region, on top of the 175 the company employs. The scheme will bring capacity to manufacture steel products in the UK that are not currently produced domestically, allowing for more UK-made steel to be used in projects of all kinds, UK Steel says in a note sent to Kallanish.

The West Midlands Combined Authority (WMCA) is mounting a 860-tonne order for UK-made steel in the expansion of the Metro Rail for the Wednesbury to Brierley Hill scheme.

“This initiative can help to increase the amount of high-quality steel manufactured in Britain and increase the supply of British made steel contributing to key West Midlands projects,” Street says.

“All major construction and engineering projects both here in the West Midlands and throughout the UK will reap benefits from purchasing steel that is made, processed, and delivered here in Britian,” says UK Steel director general Gareth Stace.

“On top of this, Marcegaglia acquired upstream manufacturing facilities in Sheffield this year. This primary stainless steel making asset is worth several hundreds of millions to the UK economy. The investment in this facility means a return to full capacity of 500,000 tonnes of steel,” comments Marcegaglia UK general manager Nick Haycock.

“The UK has now become the second most important country for the Marcegaglia Group. Producing our steel tubular products here means UK-made steel is supplying national projects like HS2. It is now crucial to create a robust UK industrial strategy to support the competitiveness of the UK steel industry, to preserve and develop production and increase employment, also in view of the export flows requirements,” Haycock adds.

Adam Smith Poland

German car production rises, but industry stays wary

In July, 300,300 passenger cars rolled off production lines in Germany, Kallanish learns from the latest national automotive association VDA figures.

Production was thus 20% higher than in the same month of the previous year. A total of 2.5 million passenger cars were produced in the first seven months. This is an increase of 31% on the same period last year.

Despite the positive trend of the past months, VDA notes that output remains significantly below pre-Covid levels. In the first seven months of the current year, 11% fewer vehicles were produced than in the first half of the pre-Covid year 2019.

Last month, VDA president Hildegard Müller cautioned that figures from the first half-year are a “rear-view mirror view”, as the order backlog has been worked down. She warned that “our expectations for the coming quarters are not positive”.

Data now available for electric vehicles (EVs) for the first half of the year show that production in this segment is growing particularly strongly. In H1, 672,900 electric cars were produced in Germany, up 93% year-on-year. The production of pure battery electric cars (BEV) is growing particularly strongly. A total of 523,900 BEVs came off the production line in the first six months, 142% more than in the corresponding period last year.

VDA claims that Germany has overtaken the USA in the production of e-cars and is now in second place worldwide. For many German steelmakers and fabricators, this is hardly good news. Special bar qualities (SBQs) are to a large extent sold for making combustion engines. SBQ makers are the losers in the transition towards electric vehicles, as the latest quarterly figures of Swiss Steel have shown, for example.

Christian Koehl Germany

Saarland mills join Responsible Steel

The major mills in Germany’s Saarland region have joined the global Responsible Steel initiative, Kallanish hears from their parent holding, Stahl-Holding Saar (SHS).

SHS encompasses platemaker Dillinger Hütte and special bar qualities maker Saarstahl. It recently launched a label for low-emission steels under the name Pure Steel+.

“Our membership in ResponsibleSteel shows what motivates us: responsibility for sustainable steel production entirely in line with Pure Steel+,” says SHS chief executive Stefan Rauber. “The initiative’s multi-stakeholder concept emphasises that to achieve a sustainable value creation process, all levels of the steel supply chain must contribute.” The two mills together account for 5 million tonnes/year of steel production.

ResponsibleSteel has over 130 members worldwide, including steel producers and buyers as well as mining companies and civil society organisations. Among other things, the non-profit organisation has developed an independent certification programme for the steel value chain that can be used to certify companies. Its German members so far include thyssenkrupp Steel, the mills of ArcelorMittal, but also distributors like Stahlo.

Christian Koehl Germany

OEM bureaucracy impairs German automotive suppliers: ArGeZ

Germany’s automotive suppliers do not anticipate a boost for business this autumn, according to their interest group, ArGeZ, a subgroup of steel and metals fabricators association WSM. In a statement issued this week, the group addresses some burdens that have aggravated its members.

The current sentiment is not a consequence of shock effects like the Covid pandemic or the Russian invasion of Ukraine, but reflects a structural crisis in Germany as an industrial location, ArGeZ says. Small and medium-sized enterprises, in particular, do not have the flexibility to avert the unfavourable regulatory conditions of the government, but also of the OEMs, ArGeZ notes.

The interest group points to the high prices for gas and power, which it says are a multiple of those paid in France or the USA, for example. As steel federation WV Stahl did previously, ArGeZ has called on the government to provide a capped electricity price for manufacturing industries for a limited period of time, Kallanish notes.

Another main issue it addresses is bureaucracy, which needs to be trimmed to size, says its spokesman Christian Vietmeyer, who is also managing director of WSM. Apart from governmental bureaucracy, he attacks the bureaucracy formed by companies misusing the idea of sustainability. “The ‘sustainability’ label is used to flood smaller suppliers with ever new requests for declarations and documentation. Medium-sized companies drown in excessive questionnaires with repetitive and often absurd questions,” he observes.

This has grown to a painful degree that was not intended by the legislator, and has gone beyond reason and common sense, he notes on behalf of the interest group.

Christian Koehl Germany

Tata UK funding deal nears: reports

Tata Steel remains in talks with the UK government over support for the decarbonisation of its Port Talbot plant, the firm has said in response to media reports over the weekend.

According to Sky News, the UK government will offer Tata Steel £500 million ($631m) in funding, while Tata itself will commit £700m in capital expenditure. The news agency cites sources saying the terms of an agreement were subject to change, but that there were hopes of finalising it as early as this month.

However, the plan could come at a cost – the loss of 3,000 jobs over the long term, Kallanish notes.

“Tata Steel is continuing to discuss with the UK government a framework for continuity and decarbonisation of steelmaking in the UK amidst very challenging underlying business conditions given that several of its heavy end assets are approaching end of life,” the steelmaker says.

“Given the financially constrained position of our UK business, any significant change is only possible with government investment and support, as also seen in other steelmaking countries in Europe where governments are actively supporting companies in de-carbonisation initiatives,” it adds.

Unite the Union general secretary Sharon Graham observes: “This government could make us the green steel capital of Europe – instead they are choosing to follow a job cuts agenda. Unite will leave no stone unturned in the fight for jobs. We will now be mounting a significant campaign on this issue and we fully expect the Labour Party to make a serious commitment to a better future for UK Steel.”

Adam Smith Poland

Seasonal lull inhibits trading in Southern European long steel market

Activity in the Southern European rebar and wire rod markets remained subdued in the week to Wednesday August 30 amid seasonal closures, sources told Fastmarkets.

Fastmarkets’ weekly price assessment for steel reinforcing bar (rebar) domestic, exw Italy, was €645-670 ($703-730) per tonne on Wednesday, down by €5-15 per tonne from €660-675 on August 23.

Prices fell in the Italian rebar market as a result of weak demand and bearish sentiment ahead of the mills officially reopening.

While some market participants have already returned, steel mills are expected to officially reopen at the beginning of September, Fastmarkets understands.

“The market is still flat, and the construction sites will only return to full working capacity this week,” a buyer source said on Wednesday.

“Demand across Europe is still… dead as the market waits for mills and customers to return from the summer holidays,” a producer source said.

Fastmarkets’ price assessment for steel reinforcing bar (rebar), domestic, delivered, Spain, was €640-650 per tonne on Wednesday, unchanged since July 12.

Prices remained unchanged in the Southern European wire rod market because of seasonality and continuing weak demand, sources said.

Fastmarkets’ weekly price assessment for steel wire rod (mesh quality), domestic, delivered Southern Europe, was €580-600 per tonne on Wednesday, unchanged since July 26.

Published by: India-Inés Levy

HRC prices in Europe tick up on higher offers; strength of rebound questionable

European hot-rolled coil prices edged up on higher offers on Friday September 1, but market participants expect more clarity on the direction of prices next week when buyers come back to the market.

Even though European steelmakers have been gradually pushing for higher prices, with some claiming to have achieved slight increases in recent deals, the sustainability of the uptrend remains in doubt.

“It’s hard to get higher prices for HR sheet and sections; customers are pressuring us for a decrease actually,” a trading source told Fastmarkets. “The [HRC] price rise the European mills are seeking has no support [in terms of] demand.”

European mills are targeting €700 ($761) per tonne EXW in Northern Europe for October-delivery HRC, but no trades have been reported at that level so far and most buyers consider it “unrealistic” due to insufficient real steel demand.

Transactions for limited tonnages of HRC in Northern Europe were reported at €650-660 per tonne EXW. And one integrated mill claimed to have achieved €670-680 per tonne EXW for prompt-delivery coil – although this was not widely confirmed by other market participants.

Buyer estimates of the tradable price in Northern Europe, meanwhile, remained at €640-660 per tonne ex-works.

Fastmarkets calculated its daily steel HRC index domestic, exw Northern Europe at €656.25 per tonne on Friday, up by just €6.25 per tonne from the previous calculation of €650.00 per tonne on August 31.

The index was up by €12.50 per tonne week on week and up by €6.25 per tonne month on month.

Fastmarkets’ calculation of its corresponding daily steel HRC index domestic, exw Italy was €637.50 per tonne on Friday, up by €2.50 per tonne from €635.00 per tonne on August 31.

The Italian index was up by €2.50 per tonne week on week, but unchanged month on month.

Italian producers were also targeting higher prices, sources said, notably €700 per tonne delivered (about €680-685 per tonne ex-works) for October-delivery HRC.

But local buyers were maintaining a wait-and-see stance, with restocking expected to begin in the first 10 days of September.

Even though trading sources were not ruling out some HRC price increases in September, the target level voiced by Italian mills was not considered to be realistic.

Buyer ideas for the tradable level came in at €630-650 per tonne ex-works.

Sources told Fastmarkets they expect more clarity regarding the direction of Southern European HRC prices in the coming week when all the buyers and sellers have returned after the summer break.

Published by: Julia Bolotova