Trading on pause in European HRC market; prices static
Fastmarkets calculated its daily steel hot-rolled coil index domestic, exw Northern Europe at €620.00 ($677.73) per tonne on Wednesday, stable day on day.
The index was down by €0.71 per tonne week on week and by €11.00 per tonne month on month.
The summer holiday season was in full swing across Europe, and trading in the HRC market was said to be “non-existent”.
“The market is very quiet, if not fully asleep,” a steel service center source in the Benelux area said.
Firm offers were also rare because mills were considering how to react to weak demand from the market, the pessimistic outlook for the automotive industry and the uncertain outlook for construction, sources said.
“On the one hand, [a] price increase is absolutely necessary, we operate with squeezed margins or no margins, but at the same time, the market fundamentals are not supportive of a price rise,” a mill source said.
Buyer sources estimated the tradeable values for HRC in Northern Europe at €600-620 per tonne ex-works.
Some sources suggested that €590 per tonne ex-works was achievable for larger volumes, but this could not be confirmed with suppliers.
“[The price of] €600 [per tonne ex-works] seems to be a red line for the mills,” a buyer in Germany said.
Some suppliers were aiming for €660-670 per tonne ex-works for October-delivery coil, but it remained to be seen whether the market would be ready to accept high prices after the summer break, sources said.
In Southern Europe, Fastmarkets calculated its daily steel hot-rolled coil index domestic, exw Italy at €620.00 per tonne on Wednesday, unchanged from Tuesday.
The index was down by €0.63 per tonne week on week and by €4.10 per tonne month on month.
The Italian market was completely quiet, with both buyers and sellers absent from trading.
Buyer sources estimated the workable market level at €600-620 per tonne ex-works.
Italian mills were expected to come back with new offers in end-August.
The latest offers for September-delivery coil were heard at €640-650 per tonne delivered (€630-640 per tonne ex-works) in end-July.
But industry sources pointed out that local suppliers were likely to attempt a price rise after the holidays.
The market for overseas coil was also quiet amid news of looming anti-dumping investigations into certain origins, Fastmarkets reported.
Published by: Julia Bolotova
Ukraine’s new green steel law will help integration into EU market, but adds pressure during wartime
The law could help to attract foreign investment into the rebuilding of metal and mining enterprises in Ukraine.
Meanwhile, unification of local legislation with European directives will make Ukraine’s licensing procedures clearer to foreign trading partners, which will also facilitate the rebuilding process.
But businesses in Ukraine have a limited time to meet the requirements of the new law, which is putting extra pressure on them, considering the wartime challenges they already face.
“Ukraine wants to ease its entrance into the European Union. This means that our business will need to switch to new standards faster than was expected,” a spokesperson for key Ukrainian steelmaker Metinvest told Fastmarkets.
“The new law raises concerns because of the [short] time allowed for modernization, and the economic pressure that it will put on Metinvest,” the spokesperson said. “[The] terms under which the best available technologies [a mandatory requirement] should be implemented, and the decommissioning of outdated equipment should happen, could be a challenge during wartime.”
According to the law, within four years of the law being enacted, companies should obtain an integrated environmental permit, which will set specific emissions and waste standards for enterprises.
“By October 2028 [the deadline for permit applications],” a spokesperson for ArcelorMittal Kryvyi Rih told Fastmarkets, “we are obliged to carry out a large number of preparatory actions and to have [a specific] investment plan, and the potential financing sources we will use for modernization of equipment, according to the best available management technologies and methods (NDTM) in production.”
ArcelorMittal Kryvyi Rih (AMKR) is Ukraine’s other large steelmaker.
“Under martial law, when companies are economically unstable, [those requirements] will be extremely complicated,” AMKR said. “[It is] unclear how [we will be able to bring into effect] ecological modernization, and which international companies are ready to visit Ukraine [to perform] construction and engineering works.”
Before Russia’s full-scale invasion of Ukraine, local steel businesses had already been dealing with foreign engineering and technological companies on modernization projects, the company added.
“The law may help to raise funding for our environmental initiatives,” Metinvest said. “However, it is extremely difficult to attract foreign financing for a plant over which missiles fly every day.”
EU’s CBAM affects Ukraine’s decarbonization policy
The hostilities, and the loss of vital logistics routes through ports on the Black Sea and Sea of Azov, have significantly affected export volumes and the sales geography of Ukrainian producers.
Even after late August 2023, when the so-called ‘sea corridor’ allowed iron and steel products to be exported via the ports of greater Odesa, the EU remained the key market for Ukraine-origin products.
According to estimates by market sources, more than 80% of Ukraine’s finished steel goods and 80% of its iron ore are exported to the EU, so it is crucial for Ukraine to align its decarbonization policy with the EU.
The European Carbon Border Adjustment Mechanism (CBAM) is a tool intended by the European Union to put a fair price on the carbon emitted during the production of carbon-intensive goods that enter the bloc.
The CBAM transition period began on October 1, 2023. This phase, when EU authorities will test the mechanism without imposing any duties, will run until the end of 2025, with full implementation to start in 2026.
The CBAM will be gradually phased-in from 2026 to 2034, alongside the phasing-out of the free carbon allowances applicable under the European Emissions Trading Scheme (ETS).
Buyers of imported goods will have to submit CBAM declarations on a quarterly basis. These declarations should contain the following information:
• Total quantity of each type of goods imported in the previous calendar year
• Total embedded emissions associated with the imported goods
• Total number of CBAM certificates to be transferred for surrender
• Copies of verification reports issued by the accredited verifier.
The price of the certificates will be calculated by the European Commission on a weekly basis, based on the average price of the closing EU ETS carbon dioxide (CO2) allowances for each week.
The price of a carbon emissions permit in the EU was €65-70 ($71-77) per tonne in July 2024. The EU intended that the free allocation of such permits would be fully eliminated by 2034.
Market sources have estimated that CO2 allowance prices would jump to €200-250 ($219-273) per tonne when the free allocations are phased out.
CO2 emissions by Metinvest’s Kamet Steel asset, an integrated long steel producer located in central Ukraine, were 2.3 tonnes per tonne of produced steel in 2023.
Two years before, however, the company’s CO2 emissions per tonne of produced steel were at a lower figure of 2.17 tonnes in 2021.
This was because these results included the Ilyich Iron & Steel Works and Azovstal, both of which have now been destroyed by the war but were located in Mariupol, now occupied by Russian forces. Before the invasion, Metinvest had concentrated its ecological initiatives on these assets.
The company also partly owns integrated flat steel-making asset Zaporizhstal Iron & Steel Works in Zaporizhzhia.
In 2022, Metinvest’s CO2 emissions amounted to 2.45 tonnes per tonne of steel.
AMKR, which is also an integrated mill, declined to comment on its emission volumes.
The phasing-out of free allocations to industries under the ETS will start with a 2.50% cut in 2026, along with the CBAM phase-in. By 2030, the free allocations will be almost halved (down by 48.50%), before being completely phased out in 2034.
“[A total of] 80% of ETS carbon allowances is distributed [and] only 20% is paid for. From 2026, the mills will have to start paying for them,” a distributor in Europe said.
The EU’s ambitious decarbonization goals, and the growing cost of carbon emissions under ETS, has been stimulating European steelmakers to invest heavily in the decarbonization of their operations, using steelmaking methods that reduce CO2 emissions.
As a result, European steelmakers see CBAM as a necessary tool to ensure a fair and level playing field for all steel suppliers into the EU.
“We aim to reindustrialize Europe into a green economy,” a steel mill in Europe said, “so we need to measure the emissions [related to the] steel that comes in from abroad, and make sure that we are all competing under the same conditions.”
Modernization ambitions of Ukrainian steel companies
Both of the key Ukrainian steelmakers, Metinvest and ArcelorMittal, currently produce steel via the basic oxygen furnace-blast furnace (BOF-BF) route. But, taking the above into account, they are now considering a transition to steel production via electric-arc furnaces (EAFs) or other technologies that will help to reduce emissions.
This, however, would seem to be possible only after the end of military operations in the country.
“Currently,” AMKR told Fastmarkets, “the company is implementing legislation on monitoring greenhouse gas emissions for large industrial equipment, and is undergoing verification of the monitoring report by an independent accredited organization.
“For the post-war period, we are considering all technologically possible options for CO2 emissions reduction, including the construction of an electric-arc furnace, the installation of solar power plants, etc,” the company added.
“Improving the quality of iron ore products for direct-reduced iron technology is important for low-carbon steel production,” Metinvest said.
“For example, the Central mining and processing plant can already produce 2.3 million tonnes [per year] of high-quality pellets. We plan to design facilities for the production of direct-reduction iron [DRI] and hot briquetted iron [HBI] in Kryvyi Rih,” it said.
“A transition to steel production technologies aimed at significant reduction of CO2 emissions in the short and medium terms is a strategic step toward the gradual elimination of blast- and open-hearth furnaces, and their replacement with electric-arc furnaces or other available technologies,” it added.
Interpipe is the sole EAF-based steel producer in Ukraine, and concentrates on pipes and railway products. It did not respond at the time of publication to a request for comment on its current operations or future projects.
Published by: Julia Bolotova, Marina Shulga, Vlada Novokreshchenova
European HRC market quiet amid summer slowdown; expectations mixed
The summer holiday season was limiting trade across the European HRC market; firm offers were rare, and sources pointed out that suppliers preferred a “case-by-case” approach.
Buyer sources estimated the workable market level to be at €600-620 ($657-679) per tonne ex-works.
Some sources suggested that €590 per tonne ex-works was achievable for larger volumes, but this could not be confirmed with suppliers.
The latest offers for September-delivery HRC were heard at €620-650 per tonne ex-works in Northern Europe, while some mills were aiming for €660 per tonne ex-works for October-delivery cargoes.
As a result, Fastmarkets calculated its daily steel hot-rolled coil index domestic, exw Northern Europe at €620.00 per tonne on Tuesday, down by €2.08 per tonne from €622.08 per tonne on Monday.
The index was down by €5.00 per tonne week on week and by €11.00 per tonne month on month.
Meanwhile, the post-summer price direction was still unclear.
On the one hand, sources suggested that the inflow of cheap imports into the EU will be limited by new safeguards, as well as looming anti-dumping investigations against certain origins; and that, along with restocking, would help European mills to achieve higher prices.
“We still expect [HRC] prices to move up from the end of August or beginning of September as buyers will buy more domestically,” a buyer in the Benelux area said.
At the same time, sources said that real consumption remains weak, and is unlikely to recover until the end of the year – a view that was echoed by European steel industry association Eurofer in its quarterly outlook published at the end of July.
“Without consumption rebound we cannot speak about any sustainable price recovery,” a second buyer said.
In Southern Europe, Fastmarkets calculated its daily steel hot-rolled coil index domestic, exw Italy at €620.00 per tonne on Tuesday, unchanged from a day earlier.
The index was down by €1.25 per tonne week on week and down by €4.10 per tonne month on month.
The Italian market was silent on Tuesday. Local suppliers have started summer maintenance work and were expected to come back to the market with fresh offers at the end of August, Fastmarkets heard.
Buyer sources estimated the workable market level to be at €600-620 per tonne ex-works.
In terms of imports, sources reported an offer from one Japanese supplier at €580 per tonne CFR to Southern Europe, for October-shipment HRC.
From Turkish mills, September-October shipment HRC was offered at €570-590 per tonne CFR, including the duty.
From Vietnam, offers were reported at €560-570 per tonne CFR. For large volumes, offers were heard at €540 per tonne CFR to some regions.
Darina Kahramanova in Sofia contributed to this report.
Published by: Julia Bolotova
ArcelorMittal launches HyMatch steel for hydrogen transport
ArcelorMittal is launching a new steel product for the construction of hydrogen pipelines to support the roll-out of hydrogen gas infrastructure.
Its new steel grade to support pipe manufacturers is called HyMatch, featuring fine and homogeneous microstructure and good cleanliness, resulting in low risk of hydrogen embrittlement, Kallanish hears from the company.
It notes that research programmes for steel in hydrogen infrastructure are underway at ArcelorMittal production sites, including in France (Fos-sur-Mer), Germany (Bremen) and R&D laboratories including in Belgium (Gent). Production in Fos and Bremen offers proximity to pipe manufacturers based in the Mediterranean countries and North Sea region.
Natural gas pipelines – including existing and new infrastructure – are expected to be used in the future for the transportation of hydrogen from the production facilities to the main consumption sites. ArcelorMittal highlights that HyMatch steel fulfils the requirements of industry standards such as ASME B31.12 option B, and are being tested according to the latest industry guidelines.
HyMatch steels can be purchased alongside ArcelorMittal’s XCarb steel certificates, allowing customers to report an equivalent reduction in their Scope 3 emissions.
Christian Koehl Germany
Liberty Dunaújváros gets billion euro financing from China
China’s Export and Credit Insurance Corporation (Sinosure) will support the transition of Liberty Dunaújváros to convert to low-emission technology to the tune of €1.3 billion ($1.4 billion), according to media reports.
To that purpose, Sinosure has signed a memorandum of understanding (MoU) with China’s CISDI Engineering, writes the Budapest Business Journal. CISDI was earlier contracted by Liberty to carry out the modernisation of the Hungarian mill (see Kallanish 16 May). The contract includes a 1.5 million tonnes/year capacity EAF installation as well as the secondary metallurgy and hot strip mill upgrade. These will allow the business to deliver high-value products for the automotive sector in Hungary, Liberty said.
The project from an early stage had the support of the Hungarian and Chinese governments, to be funded by Chinese banks led by CITIC Bank and backed by Sinosure, but the amount was not revealed thus far.
The announcement of the MoU was made during a visit by CISDI representatives to Liberty Dunaújváros’ steelworks, according to the local news reports. The officials reportedly consulted with experts of Switzerland’s NPT and Germany’s RCG on optimising systems at the base and building ancillary support for electricity, gas, water and steam.
Christian Koehl Germany
European HRC prices hold steady amid summer slowdown
Fastmarkets calculated its daily steel hot-rolled coil index domestic, exw Northern Europe, at €622.08 ($678.70) per tonne on Monday, up by €1.58 per tonne from €620.50 per tonne on August 2.
The index was down by €1.67 per tonne week on week and by €8.92 per tonne month on month.
Mills in Northern Europe were heard offering September-delivery HRC at €620-640 per tonne ex-works, with some suppliers even offering the material at €610-620 per tonne ex-works, Fastmarkets heard.
Trade sources estimated the workable market level at €600-630 per tonne ex-works.
According to producer sources, a degree of price rebound could be seen in September. This would be supported by the comparatively low stocks across the entire supply chain, combined with limited imports due to the new European safeguard measures.
But another producer source was skeptical about how sustainable such a rebound could be, because of the persistently slow real demand.
A buyer source was even more pessimistic, saying that “there will not be a price rebound any time soon.”
In Southern Europe, meanwhile, Fastmarkets calculated its daily steel hot-rolled coil index domestic, exw Italy, at €620 per tonne on Monday, down by €0.63 per tonne from €620.63 per tonne on Friday.
The index was unchanged week on week but down by €4.10 per tonne month on month.
“The market is dead,” a buyer source told Fastmarkets. Producers in Italy have started summer maintenance work and were expected to come back to the market with fresh offers at the end of August, Fastmarkets heard.
The most recent offers heard at the end of July were at €640-650 per tonne delivered, which would net back to €630-640 per tonne ex-works.
But buyer sources estimated the workable market level at €620 per tonne ex-works.
In terms of imports, last week, offers from Turkey were heard at €570-590 per tonne CFR, including anti-dumping duty.
A Japanese offer was head at €580 per tonne CFR to Southern Europe, for October-shipment HRC.
Vietnamese HRC was offered at €560-570 per tonne CFR. For large volumes, offers were heard at €540 per tonne CFR to some regions.
“Currently, we see that customers are hesitating to buy [such material] due to the possible anti-dumping investigation against imports from ‘other countries’,” a buyer source told Fastmarkets.
The European Commission has received a complaint asking for an anti-dumping investigation to be launched into imports of steel hot-rolled coil from Vietnam.
According to the buyer source, similar investigations are possible for other origins as well.
Published by: Darina Kahramanova
Liberty to install two EAFs in transformation of Dunaujvaros mill in Hungary
Liberty Steel will equip its Liberty Dunaujvaros, previously known as Dunaferr, with two electric arc furnaces, rather than just one as planned previously, almost doubling the Hungarian plant’s capacity as it is transformed into a low carbon emitter, the Indian-owned company said Aug. 5.
Liberty also said its technology partner CISDI, a Chinese state-owned company offering engineering, procurement and construction services to the steel industry, had received preliminary financial backing from China’s Export and Credit Insurance Corporation (Sinosure) to carry out the Dunaujvaros mill’s transformation, paving the way to finalize the project’s capital structure.
In May, Liberty and CISDI signed an agreement to finalize the feasibility study for the project, after having in September 2023 signed a memorandum of understanding with the Hungarian government agreeing in principle to re-equip the metallurgical coal-based plant with electric arc furnace technology.
Under the agreement in principle between CISDI and Sinosure, Sinosure will provide credit insurance backing the Eur1.3 billion investment in the financing, export and installation at Liberty Dunaujvaros of two EAFs with 1.5 million mt/year capacity each.
The two EAFs will replace coal-based steelmaking operations and together with the upgraded secondary metallurgy units will recycle ferrous scrap and direct reduced iron producing slabs to be further processed into hot-rolled coils, with the whole cycle emitting 80% less CO2 compared with the mill’s existing blast furnace-based production units, which can produce up to 1.2 million mt/year of liquid iron and 1.6 million mt/year of steel.
Liberty already ended coke production at the Dunaujvaros site when in mid-June it started to close its two coke oven batteries, citing their loss-making operations due to the oversupplied market. The iron smelting furnaces at the steelworks remain idle with only the rolling mills running.
The Eur1.3 billion investment package will also include an upgrade to existing hot rolling and galvanizing operations and the installation of some new lines to cater for defense and automotive applications.
“The plant will incorporate the very latest electric arc furnace, ladle furnace, vacuum degassing, slab caster and AI control systems from CISDI to bring it to a world beating level of efficiency,” CISDI’s Chairman Xiao Peng said in a statement.
The specifications of plant will be finalized once the partners complete the project’s technical and feasibility studies.
The cooperation between Liberty Dunaujvaros and CISDI underlines the growing relationship between China and Hungary, and shows significant benefits of investment in sustainable steelmaking technologies, according to Sinosure representative He Zhigang.
Auto market can afford green-steel conversion cost: study
Transport & Environment (T&E), a trans-European organisation campaigning for emission-free transportation and traffic, says the automotive industry can become the lead market for low-carbon steel production in Europe if lawmakers set requirements.
If carmakers were to switch 40% of their steel use to green steel (with less than 400kg of CO2 emissions per tonne), it would add just €57 ($63) to the sticker price of an electric vehicle. This analysis by T&E is based on a new study by consultancy Ricardo titled “The use of green steel in the automotive industry.”
By 2024, switching to 100% green steel would cost only €8 – compared with using conventional steel – due to CO2 pricing as well as the falling costs of green steel production. But securing the billions of euros in investment needed for low-carbon steel production will be highly dependent on having a reliable offtake market for producers, the organisation notes.
The automotive sector is very well positioned to create this demand as it currently consumes 17% of steel in the EU, Kallanish learns from T&E. The organisation calls on lawmakers to help create a lead market for green steel in Europe by setting targets for carmakers to use an increasing amount of it in new cars from 2030.
“For less than a tyre change, Europe can build a green steel industry,” says Alex Keynes, cars policy manager at T&E. “The extra cost will be negligible and in time it will be cheaper than conventional steel. But we first need lawmakers to kick start the shift to low-carbon steel in the automotive industry.”
Christian Koehl Germany
Thyssenkrupp Steel Europe completes deal for EP Corporate Group to become minority shareholder
Prague-headquartered energy company EP Corporate Group (EPCG) completed its acquisition of a 20% stake in the steel business of German industrial conglomerate Thyssenkrupp, which the two companies agreed in April.
Thyssenkrupp CEO Miguel Lopez said in a July 31 statement the deal with EPCG is “an important step towards the independence of the steel business and a resilient, cost-efficient and climate-friendly steel production.”
The parties did not disclose financial details of the transaction, but are already discussing the acquisition of a further 30% stake in Thyssenkrupp Steel Europe by EPCG with a view of forming a 50/50 joint venture.
Controlled by Czech billionaire Daniel Kretinsky, EPCG is a private industrial group focused on energy, infrastructure, logistics, media and e-commerce among other sectors with its European assets including gas pipelines and gas storage facilities, power plants and electricity networks. It has been seeking investment opportunities in industries that are exposed to higher energy costs and to potentially contribute to their decarbonization.
Thyssenkrupp is building its first direct iron reduction plant in Duisburg, where it plans to start using hydrogen in 2028-29, with Eur2 billion ($2.16 billion) funding from the German government covering two-thirds of the project’s cos. Thyssenkrupp Steel Europe would not be obliged to offtake energy from EPCG, which would instead act as a backup or fallback option.
The EU HRC market remains stable even as mills operate at break-even margins
Domestic European hot-rolled coil prices remained largely unchanged Aug. 1 as weak market fundamentals persisted, with market sources remaining uncertain about the future price outlook.
Some sources noted that prices cannot go down any further, as mills are operating at break-even or tight margins, depending on the type of furnace used.
“I don’t think prices can go below [Eur600[/mt,” a service center source said.
According to market sources, the strain and volatility experienced in the HRC sector is not a surprise, particularly as sluggish demand in the European automotive industry and competitive Chinese automotive exports weigh on the market.
Sources said European mills may see some more stability and certainty in specialized coils, such as hot-dipped galvanized, where product quality remains higher than alternatives available in Asia.
Furthermore, the future of the automotive industry will depend on the level of support and legislation implemented from the European Commission, which could take the form of tax cuts or subsidies, sources said.
“You need incentives,” a service center source said.
Platts assessed Northwest European HRC at Eur620/mt ex-works Ruhr Aug. 1, stable with July 31.
Tradable values were reported at Eur620-640/mt EXW Ruhr.
Meanwhile, Platts assessed domestic HRC prices in Southern Europe at Eur620/mt EXW Italy Aug. 1, stable with July 31.
