HRC prices little changed in Europe amid ‘non-existent’ trading
“There is no pick-up in trading. Lowering prices failed to spur steel demand. Buyers just keep purchasing hand-to-mouth, expecting prices to drop more tomorrow,” a buyer in Germany said.
Buyers were not interested in replenishing stocks due to lower order intake from end users, Fastmarkets understands.
Besides, industry sources expected domestic HRC prices to keep sliding in the short term, with a downtrend in raw materials prices adding pressure to already weak finished steel markets.
“Mills are hungry for orders but at the same time not prepared to cut prices significantly,” a buyer source in Northern Europe said. “[End-user] demand is also very weak; therefore, most buyers don’t feel the need to restock.”
Sources pointed out that buyers were destocking, with tough competition in the secondary market among steel service centers, traders and stockists.
Northern European steelmakers were reportedly trying to keep offers at €700-730 ($766-798) per tonne ex-works, while buyers’ ideas of achievable prices were heard at €680-700 per tonne ex-works.
Mills in Northern Europe were heard offering April-May lead times.
Fastmarkets calculated its daily steel hot-rolled coil index domestic, exw Northern Europe at €695.33 per tonne on Thursday, down by €0.92 per tonne from €696.25 per tonne on Wednesday.
The index was down by €12.80 per tonne week on week and by €50.67 per tonne month on month.
In Southern Europe, Fastmarkets’ corresponding steel hot-rolled coil index domestic, exw Italy was calculated at €673.75 per tonne on Thursday, down by €1.25 per tonne from €675.00 per tonne on Wednesday.
The index was down by €13.75 per tonne week on week and by €61.88 per tonne month on month.
In Italy, low tonnages of HRC were reported traded around €670 per tonne ex-works, with buyer estimates of achievable prices at €650-680 per tonne ex-works.
April-delivery HRC was still available from Italian suppliers, Fastmarkets understands.
Buyers said that the bottom for HRC prices in Italy has yet to be reached, so they were in no rush to make any bookings.
“There is still room for [HRC] price correction. The only efficient way to stop the downtrend would be output cuts, but European mills are not in a hurry to implement those,” a buyer in Italy said.
HRC offers for June-July arrival from Taiwan, Vietnam and Japan were heard at €580-600 per tonne CFR on Thursday.
But buying interest in import coil was also limited, despite prices being lower than domestic ones, Fastmarkets understands.
EU import safeguard risks were high, especially for the “other countries” category, where the cheapest offers come from — namely Vietnam, Japan and Taiwan — and lead times were quite long, sources said.
Buyers also expected import prices to sink even lower in the short term due to poor demand and sliding raw material costs, sources said.
Southern European steel longs prices stable; IREPAS outlook remains bleak
Fastmarkets price assessment for steel reinforcing bar (rebar) domestic, exw Italy was €625-645 ($684-705) per tonne on Wednesday, down by €5 per tonne week on week from €630-650 per tonne.
Minimal buying appetite and a bearish outlook resulted in weak trading in the Italian rebar market during the week, sources said.
“The minimum price is a little lower than last week, as the market is still flat,” a buyer source in Southern Europe said.
“Rebar seems to edge down every week as mills don’t seem to be able to sustain prices or increase them. And demand remains low as bad weather has slowed construction,” a second buyer source said.
“I would say prices are stable but with very limited volumes. We have had 10 days of almost constant rain, so many major construction sites are closed,” a producer source said.
“Scrap prices have not been lowering as quickly as expected, so I think producers will soon have to push for increases, hopefully aided by better weather and higher demand as construction projects related to Italy’s National Recovery and Resilience Plan try to catch up for lost time,” the producer source added.
Fastmarkets’ calculation of its daily index for steel scrap HMS 1&2 (80:20 mix) North Europe origin, cfr Turkey was $377.51 per tonne on Wednesday, up week on week from $373.83 per tonne.
And Fastmarkets’ price assessment for steel reinforcing bar (rebar) domestic, delivered Spain was €625-645 per tonne on Wednesday, down by €5 per tonne week on week from €630-650 per tonne.
Southern European wire rod
Fastmarkets’ price assessment for steel wire rod (mesh quality) domestic, delivered Southern Europe was €640-650 per tonne on Wednesday, narrowing downward by €5 per tonne week on week from €640-655 per tonne.
IREPAS
Weak consumption from the construction industry has continued to inhibit trading in the European long steel market, according to the short-term outlook published by the International Rebar Producers and Exporters Association (IREPAS) on March 5.
The outlook for future demand remained bleak.
“The current status of the market can be described as unstable in many markets or stable at a low level at best. The outlook, unfortunately, is slow and unsatisfactory,” the report said.
But lower raw materials prices could reduce cost pressure on mills, according to the IREPAS report.
“In Europe, the slow economy has reduced ferrous scrap flow and demand from the steel industry, which is struggling with poor order books. The only good news for steel mills nowadays could be that the raw material prices, both for iron ore and scrap, are going down. Also, lower activity means lower volumes, reducing supply pressure on the markets,” the report said.
Klöckner expects increased sales in 2024
The steel distribution group therefore anticipates increased shipments and sales over 2023. The outlook it gives for specific industries in its main regions sounds somewhat more modest, though.
For North America, the German-based steel distributor forecasts growth of between 1% and 3%, with slight growth seen for the construction and energy industries. Transportation sectors – encompassing cars, shipbuilding, trains – mechanical engineering and white goods are seen on par with the previous year.
For Europe, it expects a growth of only 0-1%, with a slight upward trend for energy and white goods, while the other sectors are seen remaining flat.
In 2023, Klöckner’s shipments were 4.25 million tonnes, a slight increase from the 2022 volume of 4.19mt achieved in 2022. The increase was mainly driven by the “strong development” of Kloeckner Metals Americas, Kallanish learns from the group’s annual results presentation. Revenue, however, fell by 17% to €6.96 billion ($7.3 billion), due to the considerably lower price levels compared with 2022.
The net result from continuing operations was close to breakeven, with a net loss of €0.3 million. However, impairment losses in connection with discontinued operations – meaning the sale of the country organisations of France, the United Kingdom, the Netherlands and Belgium – meant Klöckner ended up with a net loss of €190m.
Christian Koehl Germany
Negative sentiment, lower prices impact Italian scrap: Assofermet
Sources are reporting continued lower scrap collection, as well as great uncertainty. This “has somewhat delayed the closing of contracts in these first days of March. The reason for this uncertainty is mainly due to the trend of lower sales of finished products, which has not improved, forcing steelmakers to partially review production programmes,” the note says.
February recorded mostly stable scrap prices, without major variations, while steel production slowed towards the end of January. Despite the weaker scrap collection, stocks at several scrap yards were low and prices remained unchanged. In the last days of February, some steelworks, especially in the Brescia area, limited scrap deliveries.
Italian scrap prices are decreasing this month after a period of lull by €20/tonne, or $21.8/t (see Kallanish 13 March).
Meanwhile, the association sees declining pig iron prices in March, in line with weaker finished product prices. Brazilian pig iron levels towards the US market are flat on-month. while a slowdown in pig iron purchases has been recorded on the Turkish market. Assofermet notes a decrease in Russian pig iron volumes on the Chinese market, mainly due to hiking freight rates from the Black Sea, which makes the Chinese market unattractive for Russian suppliers.
“In February, the pig iron market in Italy remained substantially unchanged. There were no price reductions but there was a decline in demand. Availability remains good, although not excessive,” Assofermet concludes.
Natalia Capra France
Germany misses chance to ease power costs: conference
According to Georgsmarienhütte chief executive Alexander Becker, the German government could and should have given a signal in the form of an incentive that would have provided a “bridge power price” for a transitory period. The idea of a temporary bridge price was touted last year by several energy-intensive industries in Germany to offer relief from higher energy costs.
On the sidelines of the conference, Becker told Kallanish that in 2021, Olaf Scholz, before becoming German chancellor, quoted the price tag of €40 ($44) per megawatt hour as being suited for manufacturing industries. More recently, economy minister Robert Habeck suggested a price tag of €60/MWh. “And we would have been happy with that,” Becker said during a panel discussion.
Instead, the price is now at €80/MWh, leaving industry players hurting. Becker believes that a subsidy of €2 billion would have been sufficient to bring down the price by €20, given a total annual consumption of 100 terawatt hours by the main energy-intensive manufacturing industries. “That would have been feasible in view of a total state budget of €1,000 billion, and it would have been quite a signal of encouragement,” he noted.
In the panel, thyssenkrupp Steel chief technological officer Arnd Köfler concurred, stating that “we need affordable power, also in view of the hydrogen production of the future”.
One extra factor that has compounded the impact of high power prices is the hike of grid fees that occurred in mid-December. “That was on a Friday afternoon, and our competitors in, for example, Italy and Poland will have cheered on in their Christmas markets when they heard that,” Becker concluded.
Christian Koehl Germany
Low consumption impacts Italian coil supply chain
Service centres are losing money in the first quarter after the negative market performance of the second half of 2023. They are now receiving coils bought at some €760-770/t base delivered, leaving them with no margins on sales considering the descending value of sheet.
Pickled sheet prices are currently at below €800/t ($875) ex-works, hovering at €780-790/t, with hot rolled sheet at about €30/t less. Coil service centre customers in the heavy machinery industry are ordering back-to-back and only “tiny” volumes, sources say. They are also reporting no margins and slow demand downstream. Some are said to have cut output by 30%.
The white goods sector’s consumption continues to be weak and has a negative outlook for H1 2024. A source says that banking on the exceptional results seen in 2021 and 2022, several metal processing companies invested in personnel and equipment to maintain output. Unable to reach their objectives, these companies are now suffering financial losses, driven by lower consumption and prices. This results in service centres receiving fewer orders and having to cut output.
Meanwhile, hot rolled coil prices continue to decline as steelmakers lament low sales volumes. In Italy, HRC is now hovering at €680-690/t base ex-works, sources say.
Natalia Capra France
European CRC, HDG prices move down amid weak demand, pressure from imports
Trading remained weak in the European CRC and HDG markets amid bearish expectations among buyers, lack of end-user demand and cheaper imports, Fastmarkets understands.
Slow demand from key end-user sectors — namely automotive and construction — was a major concern for the market, sources said.
“We expect steel consumption by the automotive sector in 2024 to be 20-30% lower year on year,” a steel service center source in Germany said.
In the CRC market, European producers were avoiding giving firm offers, sources said.
“In the CRC market, imports are dominating,” a buyer in Italy said. “European mills can’t compete with Asian mills when the [price] gap is over €100 [per tonne]. The [domestic] CRC market is chronically depressed.”
Sources reported CRC offers around €800 ($874) per tonne delivered (equivalent to €790 per tonne ex-works) in Italy; meanwhile, CRC offers in Spain were heard at €800 per tonne ex-works.
Buyers’ estimates of tradeable prices were no higher than €780 per tonne ex-works.
As a result, Fastmarkets’ price assessment for steel cold-rolled coil domestic, ex-works Southern Europe was €780-800 per tonne on Wednesday, widening downward by €10 per tonne week on week from €790-800 per tonne.
Import offers have also declined over the past week.
Offers for South Korean and Taiwanese CRC with May shipment were reported at €700 per tonne CFR to Southern Europe.
A deal was reported for Korea-origin CRC at €700 per tonne CFR during the assessment week.
CRC offers from Japan and India were heard at €700-720 per tonne CFR to Southern Europe.
Fastmarkets’ weekly assessment for steel cold-rolled coil import, cfr main port Southern Europe was €700-710 per tonne on Wednesday, down by €5-15 per tonne week on week from €705-725 per tonne.
HDG
HDG offers from European mills were reported at €800-820 per tonne ex-works during the week, while buyers’ estimates of achievable prices were heard at €780-800 per tonne ex-works.
Demand for HDG was said to be dull, with buyers reporting a slowdown in downstream sales to end users in February-March.
Fastmarkets’ price assessment for steel hot-dipped galvanized coil domestic, ex-works Southern Europe was €800-810 per tonne on Wednesday, down by €10 per tonne week on week from €810-820 per tonne.
Despite a persistent downtrend in domestic and import prices since early February, trading has remained slow.
“Mills are hungry for orders, but at the same time [they are] not prepared to give in to extremely low prices. Besides that, demand is very weak because most buyers have sufficient stocks,” a trading source said.
“Nobody wants to book [HDG] in a declining market,” a second trader said.
Offers from Vietnamese and Indian suppliers of 0.5mm HDG with Z100-120 coating were reported around €785-795 per tonne CFR to Southern Europe during the assessment week.
Overseas suppliers were said to be offering mid-May shipment.
Trading slow in European heavy steel plate market, prices flat on high costs
Trading has remained thin in the Italian heavy plate market, with buyers postponing any restocking activity in expectation of further price drops.
Local re-rollers, however, pointed out that prices for heavy-plate-quality slab, the key feedstock, have remained high. Speculation about a potential export duty on China-origin semi-finished steel persuaded some slab suppliers to withdraw from the market, and the number of offers was limited.
“Only hot-rolled coil-quality slab prices have declined. Plate-quality slab is still expensive at $640-650 [per tonne] CFR, so we cannot be flexible with plate sales,” a mill source in Italy said.
“It’s a tough situation,” a buyer in Italy said. “In the first quarter, re-rollers have still had to produce [plate] from expensive slab, so they are squeezed between high costs and sluggish demand.”
Offers of heavy plate in Italy were reported at €750-760 ($820-830) per tonne ex-works for S275-grade plate, with lead times reported at four weeks.
Tradeable values were heard around €730-750 per tonne ex-works, with occasional transactions for limited volumes reported within the range during the assessment week.
As a result, Fastmarkets’ weekly price assessment for steel domestic plate, 8-40mm, exw Southern Europe, was €730-750 per tonne on Wednesday, widening downward by €10 per tonne from €740-750 per tonne ex-works seven days earlier.
Overall, trading in the Italian market was weak, and traded volumes remained low, with no restocking in sight. Market sources expected stockholders to come back to the market for limited restocking in the second half of March, but agreed that restocking was unlikely to be “booming.”
“Italian re-rollers have problems finding customers,” a second buyer source in Italy said. “They were selling more to Central Europe recently [specifically, the Czech Republic and Poland] and managed to partially substitute missing tonnages in the region, but even from Central Europe demand has been lower in the past week, with buyers purchasing only what they needed urgently.”
Due to slow demand at home, Italian producers were seeking orders from other European markets, notably Central Europe.
Meanwhile, aggressive import offers were also adding to negative sentiment in the Italian market.
Offers of plate for May shipment from Indonesia to Italy were reported at €640 per tonne CFR during the week, down from €670 per tonne CFR heard in early March.
Suppliers from Indonesia were reported to have significant volumes of heavy plate for June-July arrival, so they were aggressive in the market.
From South Korea, offers were reported at €670-680 per tonne CFR for May-shipment plate.
Northern Europe
In Northern Europe, buyers also preferred to do “hand-to-mouth” bookings to cover their urgent needs and were holding back from restocking.
“For commodity grades, [heavy plate] buyers are only booking minimal quantities and prefer to wait to see how the situation will develop in the next few weeks. The situation for project business in higher grades is better, and some mills are well booked and feel no pressure to cut prices,” a buyer in Germany said.
“Stockholders and steel service centers do not need new [heavy plate] volumes due to dull downstream demand, and prefer to sell [plate] from stock,” a second trader in Germany said.
Plate offer prices from mills in the region were mainly flat week on week, But market sources were not ruling out some downward correction in the short erm, given the downtrend in raw materials prices and sluggish buying.
One German supplier kept its offers of commodity-grade plate at €790-800 per tonne ex-works from one location, and around €840 per tonne ex-works from another location.
Buyers estimated achievable prices at €780-800 per tonne ex-works.
Two sources reported a sale of Libya-origin heavy plate to Germany at €730 per tonne delivered during the assessment week. The specifications and tonnage, however, were not clear at the time of publication. Market sources suggested that the sale involved S235-grade plate
Italy-origin plate was offered to Germany around €800-810 per tonne delivered during the week.
A re-roller in the Benelux area was offering plate to Germany at €800 per tonne ex-works.
A Czech Republic-based re-roller was offering May-June delivery plate at €800-810 per tonne ex-works.
Lead times from Northern European mills were five or six weeks, and around four weeks from Italian re-rollers.
Fastmarkets’ weekly price assessment for steel domestic plate, 8-40mm, exw Northern Europe, was €790-800 per tonne on Wednesday, stable on-week.
Bearish sentiment keeps trading thin in European HRC market
The index was down by €16.40 per tonne week on week and by €51.25 per tonne month on month.
The market was quiet, and mills were avoiding giving firm offers, sources said.
“Inquiries [for new HRC tonnages] are very low, and buyers just keep talking prices down constantly,” a mill source said.
Offers in Germany were reported at €700-720 per tonne ex-works, while offers in the Benelux area from integrated producers were heard at €720 per tonne ex-works.
April-May lead times were reported to be available from local suppliers.
Italy-origin coil with April delivery was heard offered to Germany at €700 per tonne delivered.
A mill from Central Europe reportedly offered HRC to Germany at €690 per tonne delivered, with freight estimated at €40 per tonne.
Buyers estimated tradeable prices at €680-700 per tonne ex-works, with some sources reporting estimates as low as €650 per tonne ex-works.
“Demand is just not there, and on top of that, the decline in coking coal and iron ore prices… only added pressure to steel prices,” a buyer in the Benelux area said.
Even though most sources agreed that output cuts were necessary to balance the market and stop the downtrend in HRC prices, European mills were not rushing to adjust their output.
“European mills tend to choose volumes over prices. [Steelmakers] will need to reduce output now, or they will be selling [HRC] at €600 per tonne ex-works in the third quarter,” a steel service center source in the Netherlands said.
“The cycle of production cuts should accelerate,” another source in the European market said.
In Southern Europe, Fastmarkets’ steel HRC index, domestic, exw Italy was calculated at €675 per tonne on Wednesday, unchanged day on day.
The index was down by €14.38 per tonne week on week and by €68.75 per tonne month on month.
The Italian market was also quiet because downbeat expectations continued to keep trading low, Fastmarkets understands.
HRC offers in Italy were mainly heard at €690 per tonne delivered (equivalent to €680 per tonne ex-works), while some industry sources said that €680 per tonne delivered (€670 per tonne ex-works) was also achievable on larger volumes.
Local suppliers could still offer April lead times, sources said.
In the secondary market, 4mm HR sheet was heard traded no higher than €750-780 per tonne CPT, with some steel service centers reportedly offering as low as €740 per tonne CPT. Downstream sales were also reportedly very slow.
Import HRC offers from Asia were also under pressure from low demand and a downtrend in raw materials prices, sources said.
Offers from Vietnam, South Korea and Taiwan were consolidating around €585-600 per tonne CFR, but buying interest has remained low, Fastmarkets understands.
Most Asian suppliers were heard offering May-shipment HRC, which would mean June-July arrival.
An offer from Saudi Arabia was reported at €570 per tonne CFR for May shipment.
Most overseas suppliers were heard offering May-shipment HRC, which would mean June-July arrival.
Steel transport costs still 150% higher due to Suez crisis: Italian steel body
For steel that traditionally passed through the Red Sea, the average price of transport by container ships has gone from $1,200 per twenty-foot equivalent unit in December to around $3,000/TEU, with all major container shipping companies continuing to shun the Suez route.
The cost had steadily decreased through February from its peak of $5,300/TEU in late January, but “the situation continues to be highly volatile and unpredictable, because freight prices change suddenly and make it impossible to hypothesize the evolution of costs from one day to the next,” Gian Pietro Alberti, Member of the Technical Committee of Assofermet Acciai, said.
The container freight rate for shipping from North Asia to the Mediterranean rose from $1,600/FEU Dec. 1 to $7,000/FEU Jan. 10, then a 16-month high, before easing to $4,000/FEU March 11, according to assessments by Platts, part of S&P Global Commodity Insights. One forty-foot equivalent unit (FEU) is equivalent to 2 TEU.
The Red Sea crisis has also driven up lead time — to transport steel to Europe from countries in the Far East, it takes 15-25 days more than the 30 days it previously took.
Increasing freight rates along with concerns about the exhaustion of safeguard quotas made EU buyers hesitant about booking tonnages from Asia.
The EU has had safeguard measures in the form of tariff rate quotas for imported finished steel since 2018. Market participants have expressed concerns about having to pay compensation fees to affected exporters if the measures come to an end in mid-2024.
Platts assessed the price of imported hot-rolled coil in Northwest Europe at Eur640/mt ($699/mt) CIF Antwerp Dec. 1, rising to a high of Eur680/mt Jan. 12. By March 11, it had dropped to Eur614/mt.
In Southern Europe, the price of imported coil was assessed at Eur640/mt CIF Italy Dec. 1 and at a high of Eur680/mt Jan. 25. On March 11, the price had fallen to Eur590/mt.
On long steel products, Turkish rebar market sources said sales to some export destinations — including its top export markets, Israel and Yemen — had been hampered by the Red Sea security situation, after already being affected by the Israel-Hamas war. Demand is expected to remain slow until these situations are resolved, with further pressure on Turkish export rebar prices expected.
Platts assessed Turkish exported rebar at $587.50/mt FOB March 11, flat on the day.
Author Annalisa Villa, annalisa.villa@
