HRC prices in Northern Europe decrease further amid prevailing bearish sentiment among buyers

Hot-rolled coil prices in Northern Europe continued to fall on Monday March 25 due to slow demand, lower prices for some raw materials and strong competition from imports, sources told Fastmarkets.

Meanwhile, HRC prices in Italy were unchanged day on day.

Fastmarkets calculated its daily steel hot-rolled coil index domestic, exw Northern Europe at €675.00 per tonne ($729.46) on Monday, down by €5.38 per tonne from €680.38 per tonne on Friday.

The index was also down by €14.00 per tonne week on week and by €47.13 per tonne month on month.

Integrated mills in Northern Europe continued to offer HRC at €700 per tonne ex-works, but they were ready to grant discounts of €10-20 per tonne on firm bids, sources said.

Trading in the region remained limited, and no major deals were heard in the market.

Fastmarkets’ sources estimated workable prices in the range of €660-680 per tonne ex-works.

Falling prices of iron ore and coking coal, as well as weak demand for HRC, contributed to the downtrend in hot band prices, sources told Fastmarkets.

In addition, Asian suppliers were still heard offering more competitive prices.

“Many buyers are waiting for the period after the Easter holiday, when there will be more clarity on import volumes for the second quarter,” a buyer source told Fastmarkets.

The buyer source said domestic HRC prices had not reached “rock bottom” yet and could drop below €650 per tonne.

No one wanted to sign contracts amid falling prices, the buyer source added, implying that customers would continue to refrain from buying.

“No one is really ready to buy at the moment,” a second buyer source said.

Due to slow demand, only limited restocking could be expected in April, a third buyer source said, adding that some mills were considering output cuts but had not decided on it yet.

In Southern Europe, Fastmarkets’ daily steel hot-rolled coil index domestic, exw Italy was calculated at €662.50 per tonne on Monday, unchanged from Friday.

The index was down by €7.50 per tonne week on week and by €52.50 per tonne month on month.

HRC offers in Italy for May delivery were heard at €680-690 per tonne delivered, which nets back to around €670-680 per tonne ex-works.

Market participants estimated tradable prices in the range of €665-675 per tonne ex-works.

Deals for small volumes were heard at €655 per tonne ex-works.

“Import offers of HRC from Asia are still available on the market at €560-580 per tonne CFR to Italy, and tradable [prices] could drop by €5-10 per tonne,” the first buyer source told Fastmarkets.

HRC offers from Turkey were heard at €600-620 per tonne CFR, including the anti-dumping duty.

Published by: Darina Kahramanova

fastmarkets.com

Çolakoğlu pursues zero emissions through renewable energy investments

Turkish steelmaker Çolakoğlu Metalürji is prioritising the transition to “green” energy sources and increasing its renewable energy generation capacity, according to Turkish local media.

“We will forward our Climate Action Plan, which includes our carbon reduction targets and roadmap, to our stakeholders as soon as possible,” Kazım Selim Özkan, human resources, corporate communication, and sustainability director, is quoted as saying by the Dunya newspaper.

Çolakoğlu also intends to improve processes aimed at reducing the carbon footprint of raw material inputs, digitalisation, and the integration of artificial intelligence to enhance production efficiency. Additionally, the company has implemented various projects to minimise by-products and waste formation, it says.

SMS recently said it has completed the upgrade of the compact hot strip mill originally supplied to Çolakoğlu Metalurji in 2011 for its site in Kocaeli (see Kallanish passim).

Elina Virchenko UAE

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Waelzholz sources Tata’s ‘Zeremis’ HRC

Waelzholz and Tata Steel Nederland have signed an agreement for the supply of Tata’s Zeremis Carbon Lite brand of low-emission hot-rolled steel strip.

In order to achieve its climate targets, German cold-roller Waelzholz signed agreements last year with Salzgitter, ArcelorMittal and thyssenkrupp Steel to procure carbon-reduced strip.

“Initially, we will receive material with a carbon footprint that is up to 30% lower,” says Waelzholz head of purchasing Marcus Englberger. “The first deliveries of the low-emission hot-rolled steel strip are already planned for the current year.”

According to Waelzholz manager Matthias Gierse, 90% of the product carbon footprint is attributable to Scope 3 emissions that come from the upstream supply chain. “That’s why the procurement of low-emission hot-rolled steel strip and partnerships like this are extremely important to us,” he says.

Waelzholz has been able to offer products with a reduced carbon footprint, compared to the reference year 2018, since the end of 2023. Customers can freely scale the level of emissions reduction in absolute or percentage terms, Kallanish hears from the German company.

Christian Koehl Germany

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Tata International expands scrap business to Greece

India-based trading company Tata International will start exporting shredded scrap from Greece, according to market sources.

Although Tata declined to comment, Kallanish learns that Tata International has entered a long-term agreement with a port in Thessaloniki to export steel scrap.

Vida Metal’s shredding facility will work exclusively for Tata International to supply shredded scrap mainly to Turkey, while also eyeing the Indian market, Kallanish understands.

Tata’s new hub in Lithuania is meanwhile expected to collect scrap, mainly HMS, shredded, and bonus quality, from the Baltic countries and Scandinavia, and ship at least one cargo per month, mainly to Turkey.

Tata International currently sells scrap from the UK and the EU to Turkey, India and North Africa.

Burcak Alpman Turkey

kallanish.com

European HRC market quiet as buyers await clarity with Q2 import volumes

Slow trading conditions persisted in the European hot-rolled coil market on Friday March 22, with buyers keeping a low profile and waiting for the next quarterly EU quota period to estimate inflows in the second quarter, sources told Fastmarkets.
Buyers also remained unconvinced that HRC prices have hit rock bottom in Europe and were counting on further decreases, sources said.

Sluggish demand and the recent downtrend in iron ore and coking coal prices have been fueling bearish expectations, Fastmarkets understands.

But European mills were reluctant to cut prices further, Fastmarkets heard.

“Mills expected [HRC import] quotas to be exceeded for key suppliers from Asia and India and [presumed that] safeguard duties will be applied, making imports less competitive. Therefore, those who need [HRC] with shorter lead times will have no other choice but to book with EU mills,” a buyer in Germany said.

Current offers from integrated mills in Northern Europe were still around €700 ($763) per tonne ex-works, with €680-690 per tonne ex-works achievable on a firm bid, sources said.

Buyers’ estimations of workable prices were reported in the range of €660-690 per tonne ex-works, but transactions were rare.

“European mills officially offer €700 [per tonne ex-works], but this price can be negotiated. Mills are looking for orders, so €670-680 can be reached,” a buyer in the Benelux region said.

“Demand [from end users] is poor and weaker than expected, so stock-holders and steel service centers are confronted with stocks [that are too high] relative to demand,” the buyer added.

As a result, Fastmarkets calculated its daily steel hot-rolled coil index domestic, exw Northern Europe at €680.38 ($741.43) per tonne on Friday, down by €0.25 per tonne day on day from €680.63 per tonne.

The index was down by €12.12 per tonne week on week and by €42.75 per tonne month on month.

In Southern Europe, Fastmarkets’ corresponding daily steel hot-rolled coil index domestic, exw Italy was calculated at €662.50 per tonne on Friday, down by €1.00 per tonne day on day from €663.75 per tonne.

The index was down by €9.17 per tonne week on week and by €58.13 per tonne month on month.

Official HRC offers from the sole Italian supplier for May-delivery material were heard at €680-690 per tonne delivered, which nets back to about €670-680 per tonne ex-works.

But buyers’ ideas of workable prices were no higher than €660-670 per tonne delivered (equivalent to €650-660 per tonne ex-works).

The Italian market was also quiet. Sources expected some limited restocking after the Easter holiday in early April, when it should become clear how many imported tonnes will enter the EU market in the second quarter.

“Looks like the Indian [HRC] quota and the ‘other countries’ quota will be exceeded for [the second quarter]. We need to see what duty rates will be applied on this material and consequently see the realistic [price] gap between domestic and import HRC,” a steel service center source in Italy said.

HRC offers from Asian suppliers for June-July arrival were reported at €570-600 per tonne CFR; the lowest offers came from Vietnamese suppliers.

An offer from Saudi Arabia was heard at €570 per tonne CFR for May shipment.

Offers from Turkey for June-arrival coil were heard at €620 per tonne CFR, including the anti-dumping duty.

Meanwhile, overall bids for import coil were heard no higher than €550 per tonne CFR.

Published by: Julia Bolotova

fastmarkets.com

Polish steel rebar prices dip further, mills reduce output, sources say

Domestic prices for steel rebar in Poland have continued to decrease in the week ending Friday March 22, with comparatively good demand from cut-and-bend operators that provide prefabricated solutions for the construction sector, industry sources have told Fastmarkets.

Demand for rebar from other sectors remained low, however.

Polish mills were heard offering rebar in the range of 2,700-2,740 zloty ($683-693) per tonne CPT this week, which would net back to about 2,680-2,710 zloty per tonne ex-works.

Offer prices in the previous assessment period were similar, varying between 2,700 zloty per tonne and 2,750 zloty per tonne CPT, equivalent to 2,680-2,730 zloty per tonne ex-works.

Fastmarkets’ sources estimated the tradable market price for rebar at 2,700-2,740 Polish zloty per tonne CPT, which would net back to 2,680-2,710 zloty per tonne ex-works.

As a result, Fastmarkets’ weekly price assessment for steel reinforcing bar (rebar), domestic, exw Poland, was 2,680-2,710 zloty per tonne on Friday, down by 20 zloty per tonne from 2,700-2,730 zloty per tonne on March 15.

Rebar prices in the secondary market varied between 2,730 zloty per tonne and 2,750 zloty per tonne CPT.

A distributor source told Fastmarkets that, in the previous assessment period to March 15, Polish mills had almost sold-out their volumes for March, with the major buyers being cut-and-bend companies.

“The construction sector will start to work more actively in May,” the same source added. “Consequently, many construction firms decided to finalize their contracts with the cut-and-bend companies last week at those prices. But right now, there are no significant quantities available in the market.”

According to the distributor source, except for the cut-and-bend business, trading remained poor.

“Now, Polish mills are only delivering [material on orders they received in previous weeks], and the market is a bit frozen,” a producer source told Fastmarkets.

“[Most market participants] are waiting for the new prices [expected] after Easter,” a seller source told Fastmarkets.

According to the distributor source, one of the Polish mills was expected to announce its prices for April-production rebar at the end of March.

A second distributor source said that the downtrend in Polish rebar prices would not continue for long.

“Demand is not bad, and I do not think that prices will decline significantly in the future,” this second distributor source said. “Maybe in April, the minimum prices from Polish mills will be a bit below 2,700 zloty per tonne CPT.” He believed that prices would then stabilize.

Production cuts were also expected to affect the market. Last week, a mill was heard to adjust output by bringing-in flexible working when energy prices are lower, to decrease production costs.

Market sources have now told Fastmarkets that a second mill would be working only over the weekends in April, to cut production.

“With the higher foreign-exchange rate [between the euro and the zloty], imports can become less attractive,” the second distributor source said.

This week, import offers of rebar from Germany to Poland were heard at €620-625 ($676-681) per tonne CPT, while Italian material was offered to Poland at €640 per tonne CPT.

Published by: Darina Kahramanova

fastmarkets.com

February global DRI production jumps: worldsteel

February global direct reduced iron (DRI) production was up year-on-year, Kallanish discovers from World Steel Association data.

February worldsteel data show DRI output at 8.6 million tonnes, down 11.2% month-on-month but higher by 7.6% on-year. By far the biggest producer of the 13-country group was India, with DRI production up 17.9% y-o-y to 4.2mt.

World DRI production experienced rapid growth in recent years as the push to decarbonise the steel industry accelerated. Data from worldsteel shows annual DRI production in 2023 of 136.4mt, up 65.3% compared with 2014 levels. The International Energy Association’s Sustainable Development Scenario forecasts 2050 DRI production at 411mt.

Part of the demand push for DRI comes from the goal to reduce CO2 emissions in the steelmaking industry by 80-95% by 2050. More and more companies around the globe are taking action to reduce their carbon footprint and pursuing direct reduction projects.

The current consensus based on industry and science is that DRI in electric arc furnace (EAF) steelmaking can go a long way toward carbon-neutral production. There is also a growing trend of using hydrogen as a reductant in the DRI process.

There is concern in the industry regarding the quality of iron ore supplies. According to a report from the Iron Metallics Association, ore used for DRI production through an EAF needs an iron content of at least 66%. It takes 1.45t of iron ore to produce one tonne of DRI.

For perspective, February world crude steel production totalled 148.8mt, an increase of 3.7% compared with year-ago levels.

John Isaacson USA

kallanish.com

SSAB launches emissions-free steel powder

SSAB is advancing its line of steel powders by introducing the emissions-free powder product made from SSAB Zero steel, the company announces in a press release.

This new zero-emissions offering follows SSAB’s 2023 launch of conventional steel powder, Kallanish understands.

“This is a game-changer in the world of 3D-printed steel,” says Johnny Sjöström, executive vice president and head of SSAB special steels. “SSAB has already proven it’s possible to produce steel without carbon dioxide emissions. Now we’re merging emission-free steel with powder technology to enable sustainable 3D-printed design with unlimited imagination.”

According to the company’s statement, SSAB’s Zero product is steel made from recycled scrap using fossil-free energy sources. This, the company explains, results in “virtually zero emissions from the steelmaking process.” Zero was launched at a commercial scale in 2023.

kallanish.com

Spain’s car production remains strong in February

Spanish car production saw its good momentum continue in February, Kallanish notes.

“Flexibility in both the supply chain and production lines, together with the reduction of bottlenecks, has made it possible to stabilise output rates and avoid sudden disruptions as occurred during the microchip crisis,” comments Spanish automotive association Asociación Nacional de Fabricantes de Automóviles y Camiones (Anfac) president José López-Tafall.

Output in February was 227,923 units, an increase of 1% versus the same month in 2023. Two-month production amounted to 458,879 vehicles, up 9% from January-February last year.

Meanwhile, Spanish vehicle exports slipped due to lower demand in markets outside Europe. Supplies were 204,281 units in February, just 0.7% less compared to a year earlier.

European markets had a 93.2% share in Spanish deliveries in February, up 3.2 percentage points on-year. Two-month exports rose 6.3% over the same period in 2023 to 405,735 vehicles, Anfac data show.

Todor Kirkov Bulgaria

kallanish.com

CMC Poland performance slumps, foresees construction demand rebound

A combination of improving economic data and government-sponsored investment could bolster Polish long steel demand in the quarters ahead, says CMC. Regional mills’ production cutbacks helped its Polish unit raise selling prices and improve profitability versus the previous two quarters. However, on-year results were down dramatically.

CMC Poland saw steel shipments plummet 37% on-year in the second fiscal quarter through February 2024 to 275,000 short tons. Merchant bar and other product sales fell 17% to 211,000st, while rebar was down a hefty 65% to only 64,000st.

“Conditions in Europe are expected to remain challenging, but adjusted Ebitda is anticipated to approach breakeven levels during the third quarter,” CMC president Peter Matt says in a note seen by Kallanish.

“Business conditions for our Europe Steel Group are slowly improving, and should further benefit from increased residential construction activity as a government programme aimed at first-time homebuyers, and other government sponsored investment programs, begin to impact steel demand,” he adds.

CMC Poland average sales price was down 11% on-year in the February quarter to $673/short ton, with cost of ferrous scrap utilised up 1% to $394/st, resulting in a steel products metal margin of $279/st, down 24% on-year.

Net sales dropped 43% to $192.5 million and the firm slipped to an adjusted Ebitda loss of $8.6m versus positive $11.5m a year earlier.

Although Ebitda in the November-2023 quarter was positive $38.9m, this was thanks only to a $66m energy rebate.

Europe market conditions improved during the February quarter in comparison to recent quarters, but long steel consumption remained below historical levels. Regional long steel producers “took significant actions to rationalise supply”, while inventories across the supply chain were reduced, CMC concludes.

Six-month-through-February sales were down 32% on-year to 618,000st, with net sales down 42% to $417.7m and adjusted Ebitda down 59% to $30.3m.

Adam Smith Poland

kallanish.com