Klöckner expects increased second-quarter tonnage, revenue

Klöckner & Co expects a considerable increase in shipments and sales in the second quarter compared to Q1 and also forecasts increases for the full year.

The German stockholder group reported Q1 shipments of 1.1 million tonnes, up 5% on the prior-year quarter and 11% on Q4 2023. The latter was partially due to seasonal effects.

Klöckner generated sales of €1.7 billion ($1.8 billion) in Q1, down from €1.8 billion in Q1 2023, attributable to lower price levels. At €42 million, operating income (Ebitda) before material special effects was lower than the €65m in the prior-year quarter.

Looking at the company’s main markets, chief executive Guido Kerkhoff said during a conference call on Tuesday that most customer groups will be developing sideways in both Europe and North America over the coming months. He sees a slight increase in the energy industry, due to continued efforts to expand on renewables. Overall, “we are lacking a signal for an ignition to the markets. Buyers remain reserved, and the consumption climate remains subdued,” Kallanish heard him say during the call.

In March, Klöckner sold its stockholding assets in four European countries, in order to focus on service centres and other processing activities. “The more value added we offer, the better the business,” Kerkhoff said. Profitability for plain stockholding at the company was close to zero recently, but he noted that plain stockholding as such is not a bad business: “It can be a door-opener to customers,” he explained.

Christian Koehl Germany

kallanish.com

EU adds Turkey, Vietnam, Taiwan stainless CRC duties

The European Commission (EC) has extended definitive countervailing duties on stainless steel cold-rolled flat products (SSCR) originating in Indonesia to cover imports of material consigned from Taiwan, Turkey and Vietnam, Kallanish notes. This is to prevent Indonesia-origin material from circumventing duties. The countervailing duty amounts to 20.5%.

The Commission has also extended the existing anti-dumping duty rate of 19.3% to imports of SSCR from Taiwan and Vietnam.

Six exporting producers from Taiwan requested and obtained an exemption from the extension of measures. Yieh United Steel Corporation, Tang Eng Iron Works Co. part of YUSCO group, Chia Far Industrial Factory, Yuan Long Stainless Steel Corp, Tung Mung Development, and Walsin Lihwa were buying part of their slab and stainless hot rolled coil of Indonesian origin, processing them into SSCR and then exporting some SSCR to the EU.

“However, the investigation found that this operation did not start or substantially increase since, or just prior to, the initiation of the original anti-dumping investigation … It follows that … the operation in question cannot be considered as circumventing the measures in force,” the EC states.

Turkey’s Trinox and Posco Assan TST Celik Sanayi A.Ş. also requested exemptions. The Union rejected Trinox’s request but accepted Posco Assan’s. The investigation found that Posco’s exports did not start or substantially increase since the initiation of the investigation. Vietnamese companies Lam Khang and Yongjin Metal Technology’s exemption requests were rejected, while Posco VST’s appeal was successful.

In 2022, the EC imposed definitive countervailing duties on stainless cold-rolled flats originating in Indonesia following an anti-subsidy investigation. The investigation established that significant volumes of stainless steel, either in the form of slab or stainless HRC, exported from Indonesia, were further processed into SSCR in Taiwan, Turkey and Vietnam to be later exported to the Union.

SSCR exports from these countries to the EU increased during the investigation in 2021 and surged after the implementation of measures in 2022. European steel association Eurofer petitioned in 2023 to investigate the possible circumvention of the countervailing measures imposed on imports of SSCR originating in Indonesia.

Eurofer has welcomed the extension of the duties. “The Commission’s investigation has confirmed that a significant circumvention is taking place through imports from Taiwan, Turkey and Vietnam,” says Eurofer director general Axel Eggert.

“The anti-circumvention measures published today are important to ensure the complete effectiveness of the original measures and to avoid that artificially cheap, dumped, and subsidised semi-products (stainless slabs and hot rolled coils) sourced from Indonesia freely enter the European market, endangering the European stainless steel industry,” he adds.

The association adds that the Commission will also apply strict monitoring on imports from Taiwan, Turkey and Vietnam to determine if they are made from steel melted and poured in Indonesia.

Natalia Capra France

kallanish.com

Global steel industry requires fairness amid decarbonisation: worldsteel

A level playing field is key to global steel trade remaining open while the industry undertakes the challenge of decarbonisation, worldsteel director general Edwin Basson said at Tuesday’s Singapore Green Steel Forum attended by Kallanish.

The harmonised measurement of carbon dioxide emissions and reduction, common principles for standards and branding, such as mass balance approaches, and the fair trading of steel amid decarbonisation efforts are being discussed, he noted.

Measurement approaches developed by worldsteel over the past 20 years are becoming the basis for the future harmonised measurement, he added. The G7 and G20 countries are currently discussing harmonised measurement approaches in emissions and these require new agreements on boundary conditions, among other details.

Many steel producers are marketing their own brands of decarbonised steel using mass balance approaches. In most cases, CO2 savings in one part of the production process are bundled together and made available in the form of CO2 savings certificates for products produced in another part of the production process. Harmonised principles have been agreed by worldsteel members and will be used to develop formal guidelines, Basson told Kallanish. This will ensure that decarbonisation is promoted in a responsible, transparent way.

The trading of steel has always been open, with 30-40% of output traded between regions. A fair and open system of trade is therefore necessary. “For this to be maintained, we need a rules-based trading environment that ensures a level playing field between producers in different countries,” Basson noted.

The WTO must be at the centre of this process, he added. Countries around the world are working on developing new trade rules, such as the EU’s CBAM, that will take account of emissions and, in some cases, the cost of carbon and decarbonisation efforts in steel production.

Global steel output could see 20-25% growth to 2.4-2.6 billion tonnes by 2050, depending on assumptions around circularity. Most steelmaking countries have committed to having net zero emissions by that time. The global steel industry has set a target for a 50% reduction in emissions by 2050.

Limited ferrous scrap and direct reduced iron feedstock supply can only sustain around 50% of projected global steel production by 2050. Given the industry will continue to rely on the integrated BF/BOF route to meet around 50% of total steel demand, existing technologies must also reduce their CO2 intensity. Asia will remain BF-BoF dominated, including China, India, Japan, Korea and ASEAN. For China, the EAF share of steel production could grow over the next ten years to 30% from 10% currently.

The shortage of hydrogen for steelmaking is another challenge for the industry, as are problems with hydrogen storage and transportation. Basson also noted that less carbon-intensive steelmaking will require additional energy to replace met coal as an energy carrier. This could however prolong the requirement for coal in the electricity industry.

Worldsteel recognises that decarbonisation will take time, be expensive and also require significant change in supporting industries such as energy. Despite the challenges, Basson concluded: “I am optimistic that we will begin to see examples in the integrated route with significantly lower carbon-dioxide intensity in the foreseeable future.”

Tomas Gutierrez UK , Anna Low Singapore

kallanish.com

HRC market more positive in Italy, quiet in Northern Europe

Steel hot-rolled coil prices were broadly stable in Northern Europe on Tuesday May 7, with those in Italy ticking up on improved buying, but the sustainability of the uptrend is being questioned by buyers amid insufficient support from consuming industries, sources told Fastmarkets.

In Italy, a local steelmaker was maintaining its offers at €670 ($722) per tonne delivered (€660 per tonne ex-works). Additionally, several sources said that the mill was planning to raise their prices to €690 per tonne delivered during May on improved buying and cost factors.

But other sources suggested that the talk of a price rise was “speculation, aimed at stimulating bookings.”

These sources added that transaction prices were still lagging offers, with tradeable values heard at €640-650 per tonne delivered (€630-640 per tonne ex-works) for June-delivery HRC.

As a result, Fastmarkets’ daily steel hot-rolled coil index, domestic, exw Italy, was calculated at €638.75 per tonne on May 7, up by €5 per tonne from the previous calculation of €633.75 per tonne on May 3.

Fastmarkets’ European HRC indices were not published on May 6 because of the Early May Bank Holiday in the UK.

The index was up by €11.50 per tonne week on week and up by €2.92 per tonne month on month.

Supply in the nation was reduced, with only one local mill currently being active with HRC production.

Apparent buying has picked up in Italy since late April, but with a “cautious attitude,” sources told Fastmarkets.

“Buyers avoid stockpiling [and] there is no clarity on whether it is a sustainable price rebound,” a trading source said.

Import prices for HRC have also been firming lately, with offers for Asia-origin coil ranging from €600 per tonne CFR up to €620 per tonne CFR. Vietnam remained the cheapest origin, sources said.

A reduced gap with domestic prices and long lead times (July-August) were limiting buying interest for imported coil.

Meanwhile, Fastmarkets calculated its daily steel hot-rolled coil index, domestic, exw Northern Europe, at €640.83 per tonne on May 7, down marginally by €0.42 per tonne from €641.25 per tonne on May 3.

The index was up by €8.83 per tonne week on week but down by €16.25 per tonne month on month.

Offers from integrated mills in the region were reported at €640-660 per tonne ex-works on May 7, with lead times reported at around 4-5 weeks.

Tradeable values were heard at €630-640 per tonne ex-works.

Market sources reported improved trading in the spot market in late-April to early May due to some restocking.

At the same time, most sources were skeptical about the possibility of a significant price rebound, because real demand has remained quite limited.

“Real demand is still quite slow, and we are heading into the summer lull, so I wouldn’t expect a strong improvement in the short run,” a trader in Northern Europe said.

Industry sources remained confident that output cuts could help sustain the uptrend and balance the market, but so far, only one steelmaker in Central Europe has confirmed an extended blast furnace stoppage, Fastmarkets reported.

HRC offers from Taiwan and Japan to Antwerp were reported at €620-630 per tonne CFR on May 7.

Published by: Julia Bolotova

fastmarkets.com

Austria’s steel production rebounds in March, flat on-year

Austria’s steelmakers increased crude steel production in March compared with the previous month, according to worldsteel data.

Output amounted to 680,408 tonnes, up by 13.4% from February but almost flat year-on-year, Kallanish notes. Austria remained in 21st place in the ranking of top ten global steel producers in March, worldsteel data show.

In January-February, the country produced 1.89 million tonnes of steel, up 0.7% on-year.

Overall EU output in March decreased by 13.4% on-year to 11.6mt. In the first quarter, steel production was 7.5% less on-year versus January-March 2023 at almost 33mt.

In April, Austria’s largest steelmaker, voestalpine, has launched production of what it says is the world’s first high-quality “greentec” wire rod from hydrogen-reduced pure iron and scrap at its site in Donawitz (see Kallanish passim).

It has the goal of researching the use of hydrogen to reduce fine iron ore. In the future, the resulting hot sponge iron could be melted down in an electric arc furnace or used to produce hot-briquetted iron.

Earlier, the steelmaker placed an order with Primetals Technologies for an 850,000 tonnes/year capacity electric arc furnace to be implemented at its site in Linz. Startup is scheduled for 2027. An EAF of the same capacity, supplied by Danieli, is planned in the same timeframe for Donawitz.

In 2023, Austria’s commerce chamber, Wirtschaftskammer Österreich (WKO), expressed concern over the crash in demand and orders for commodities in the country (see Kallanish passim). WKO saw orders declining by as much as 30%, with no relief in sight.

Svetoslav Abrossimov Bulgaria

kallanish.com

British Steel secures Scunthorpe EAF planning permission

British Steel has been granted planning permission to build an electric arc furnace at its Scunthorpe headquarters, following approval by North Lincolnshire Council.

The steelmaker was granted planning permission last month to build the other proposed EAF at its Teeside site (see Kallanish passim).

The firm remains in talks with government over support, despite fellow UK steelmaker Tata Steel UK being guaranteed £500 million ($629m) of government funding last September. Government representatives are reported to be concerned that British Steel has not yet submitted plans which would allow it to receive a similar subsidy.

“It is crucial we now secure the backing of the UK Government … We are committed to working with the UK Government and need to reach an agreement quickly,” says British Steel president and chief executive Xijun Cao.

The steelmaker said late last year its proposed £1.25 billion transformation to EAF steelmaking could see commissioning potentially by end-2025.

Adam Smith Poland

kallanish.com

European coil producers consider increasing prices

European coil producers are mulling increases. Market sources tell Kallanish some are considering a €20/tonne ($21.4) hike. According to several buyers and sellers, import prices from Asian suppliers are not decreasing anymore and offers are ticking up in some cases to the level of €600/t cfr southern European port.

In Italy, hot rolled coil producers are pushing up prices for new contracts by an average of €20/t and asking for €660-670/t base delivered, depending on volume. Demand has been quiet in all markets this week as several executives are on holiday in European markets due to Labour Day. Next week in France and other European countries, demand is also not expected to resurface owing to the 8 and 9 May bank holidays, as well as the 10 May bridge and school holidays.

Sources at EU producers are aware that consumption remains limited and believe the price uptick will benefit margins in the entire supply chain. A service centre in Italy reports increased demand downstream but at low prices. This is putting strong pressure on margins and causing companies to lose money.

European steelmakers’ lead times are reported at between June and July. At present, HRC prices in Europe are at €630-640/t base ex-works, with the low point of the range seen in southern Europe.

Import prices are hovering at around €600/t cfr northern and southern European ports, or slightly below depending on volume and quality. Some producers in countries such as India and South Korea are not quoting HRC for Europe. Buyers are lamenting the long lead times. Turkey seems to be the most attractive supplier at present in terms of delivery time and prices, but quality issues are being reported. Turkish producers are offering material at €610-620/t cfr Italy duty paid.

Producers in the EU are slowing output, but no stoppages are officially planned. According to a source, the only way to address the issue of tight margins and stalled prices throughout the value chain is to cut output.

Natalia Capra France

kallanish.com

Steel destocking ends in Europe but customers still cautious, ArcelorMittal says

The end of destocking activity in the European steel market will lay the foundation for a rebound in apparent steel demand as soon as real demand improves, ArcelorMittal said in its financial report for the first quarter of the year, which was published on Thursday May 2.

ArcelorMittal added that apparent demand had improved slightly in the first quarter of the year, January 1-March 31, but it still reflected the lackluster economic backdrop. Despite that, the company reasserted its forecast that apparent steel consumption in Europe would grow by 2-4% in 2024.

ArcelorMittal predicted the same growth for the European market in its fourth-quarter report and full-year 2023 results.

In its latest financial report for the first quarter of 2024, the company added that European steel price spreads have somewhat normalized from the unsustainably low levels of the previous quarter.

Fastmarkets’ daily steel hot-rolled coil index, domestic, exw Northern Europe, confirmed that trend because the average price of such material for the first quarter of 2024 was calculated at €721.30 ($770.16) per tonne, compared with €651.08 per tonne for the last quarter of 2023.

The improved apparent steel demand in January allowed European steelmakers to secure price rises in the spot market. But sluggish real steel demand affected the apparent demand and, since the beginning of February, HRC prices in Europe have been decreasing repeatedly.

Apparent demand in European flat steel market only started to show signs of improvement in late April, and into early May, following nearly three months of pricing downtrend.

Thus, in the second half of April 2024, producers in Europe were expected to begin to seek higher prices, with cautious restocking and an uptrend in imports supporting bullish sentiment.

ArcelorMittal Europe’s key indicators
ArcelorMittal’s crude steel production from its European operations reached 7.60 million tonnes in the first quarter of 2024, compared with 6.54 million tonnes in the previous quarter.

The company’s steel shipments increased in the first quarter of the year to 7.24 million tonnes from 6.41 million tonnes in the fourth quarter of 2023. Higher figures were achieved mainly thanks to improved apparent demand in the region at the beginning of the quarter.

Sales in the first quarter of 2024 increased by 18.4% to $7.8 billion, compared with $6.6 billion in the previous quarter.

“[This was] primarily due to the improved shipment volumes, following the end of destocking, which affected the previous quarter,” the company said.

According to ArcelorMittal Europe, the average steel selling price for the first quarter of this year was $945 per tonne, up by $10 per tonne from $935 per tonne in the fourth quarter of 2023.

The operating income of the European division of the company reached $69 million in the first quarter of the year, compared with an operating loss of $4 million in the fourth quarter of last year. According to ArcelorMittal, the improved financial result was due to the higher steel shipment volumes, offset in part by higher costs.

The same factors influenced ArcelorMittal Europe’s earnings before interest, taxes, depreciation and amortization (Ebitda), which increased by 21.1% to $343 million compared with $283 million in the fourth quarter of 2023.

Sustainable development
ArcelorMittal expected that demand for its low-carbon steel would grow globally.

“Sales of our XCarb® product, which can have a carbon footprint as low as 300kg CO2 per tonne, reached 229,000 tonnes in 2023, and are expected to more than double in 2024,” the company said.

But according to Fastmarkets’ sources, the overall demand for steel with reduced carbon dioxide emissions remained comparatively low in Europe, mainly driven by the automotive and construction industries. The biggest uptake of the material was in the Nordic states, the Benelux region and Germany.

Fastmarkets’ most recent weekly assessment of the green steel, domestic, flat-rolled, differential to HRC index, exw Northern Europe, was €150-250 per tonne on April 25, unchanged since mid-December.

“Maintaining our position as the lead supplier of low-carbon steels is a clear priority, and the planned ramp-up at Sestao [in Spain], along with the new [electric-arc furnace] in Gijon [also in Spain], which will break ground imminently, will both have an important role to play,” chief executive officer Aditya Mittal said.

“Meanwhile, our XCarb recycled and renewably produced steel will be on show to the world during the Paris Olympics,” he added, “in both the Olympic and Paralympic torches and in the Spectacular, which will be erected on the Eiffel Tower.”

According to Fastmarkets’ information, ArcelorMittal Sestao has installed capacity for about 2 million tonnes per year of crude steel. The plant also produces hot-rolled strip steel.

The Sestao mill produces recycled and renewably produced (RRP) steel, a high scrap-content product made via EAFs that use 100% renewable energy.

Carbon dioxide emissions at Sestao are around 0.5 tonnes per tonne of steel produced, compared with 2.1 tonnes of CO2 per tonne of steel produced via the traditional blast furnace route.

As ArcelorMittal previously reported, its 1.1 million tpy EAF in Gijon will become operational in the first half of 2026. At that time, the site will be able to switch to producing low carbon-emissions steel for the long products sector.

Contracts for the construction of the new capacity were signed in November last year.

According to Fastmarkets’ information, ArcelorMittal operates two BFs in Gijon with total capacity for 4.65 million tpy of pig iron. The Gijon steelworks has capacity for about 600,000 tpy of heavy plate, 600,000 tpy of wire rod, and 400,000 tpy of steel rail.

The company started low-carbon heavy steel plate production in Gijon in July 2023.

Published by: Darina Kahramanova

fastmarkets.com

European HRC prices stable in quiet market; sentiment cautiously positive

European hot-rolled coil prices were unchanged on Wednesday May 1, with trading almost non-existent due to public holidays in most EU states.

Still, sentiment remained cautiously positive and European mills were aiming for higher prices, Fastmarkets heard.

An uptrend in the imported coil market and improved restocking supported European steelmakers’ attempts to raise prices.

“The cheapest import prices are gone and those suppliers who can offer discounts have huge safeguard quota risks and quite distant lead times,” a trading source in the Netherlands said. “Apparent demand is still quite slow but customers have low stocks.”

Integrated mills in Northern Europe have stopped granting lower prices for June-delivery coil, several sources told Fastmarkets.

“We’ve booked coil at €630 ($674) per tonne ex-works but, when we tried to increase volumes for the same price, the mill rejected the bid,” a buyer in Northern Europe said.

Offer prices for June delivery HRC from integrated mills in Northern Europe were reported in the range of €640-670 per tonne ex-works, with lead times reported at four to five weeks.

A leading European steelmaker raised its offers to €670 per tonne ex-works earlier this week.

Buyers’ estimates of tradeable values were heard within €630-640 per tonne ex-works, with deals reported within this range earlier in the weak.

Fastmarkets calculated its daily steel hot-rolled coil index domestic, exw Northern Europe at €632.00 ($676) per tonne on May 1, unchanged day on day.
https://dashboard.fastmarkets.com/p/MB-STE-0028

The index was up by €6.58 per tonne week on week but down by €31.75 per tonne month on month.

In Southern Europe, Fastmarkets’ daily steel hot-rolled coil index domestic, exw Italy was calculated at €627.25 per tonne on Wednesday, also unchanged day on day.
https://dashboard.fastmarkets.com/p/MB-STE-0892

The index was up by €6.62 per tonne week on week but down by €17.75 per tonne month on month.

The Italian market was quiet on Wednesday due to a public holiday.

Offers for HRC with a lead time of four-to-five weeks from a local supplier were at €660-670 per tonne delivered (€650-660 per tonne ex-works), up from €640-650 per tonne delivered (€630-640 per tonne ex-works) in early April.

But buyers estimated tradeable values at no higher than €630-640 per tonne delivered (€620-630 per tonne ex-works).

At the same time, some sources suggested that local suppliers had that chance to increase prices incrementally given uncompetitive imports and buyers’ need to restock.

“End-user demand remains sluggish so major price rises are unlikely to be accepted. But small steps — [up by] €10-15-20 per tonne – are quite possible since there are no import alternatives,” a buyer source said.

Import offers for HRC have risen by €10-20 per tonne in the past two weeks, making overseas coil purchases less attractive for European buyers, especially taking into consideration long lead times. Asian mills were offering material for June-July shipment, which means arrival in August.

Prices for HRC from Vietnam, South Korea and India for June-July shipment were consolidating around €600-620 per tonne CFR.

From Turkey, June-shipment coil was offered at $660 per tonne CFR to Antwerp, without anti-dumping duty.

Published by: Julia Bolotova

fastmarkets.com

SSAB’s Lindqvist joins Swiss Steel’s supervisory board

Following the issuing of new shares, Swiss Steel has announced changes to its supervisory board, which include the proposed appointment of Martin Lindqvist, the outgoing chief executive of Swedish steelmaker SSAB, Kallanish notes.

Besides Lindqvist, nominations for election to the board at the annual general meeting on 23 May will include Alexander Gut and Karl Haider.

Gut would represent BigPoint Holding, which in the wake of the share issue has emerged as Swiss Steel’s majority stakeholder with two thirds of shares (see Kallanish 19 April).

In addition to him, Lindqvist and Haider would be nominated as independent board members. Haider is chief executive of Semperit Holding. His previous involvement with the steel industry included positions at Tata Steel Europe as well as the performance metals division of voestalpine.

According to the announcement, Lindqvist is expected to join the board from 1 October at the latest. SSAB is yet to appoint someone to succeed him as ceo. Of Swiss Steel’s existing board members, Jens Alder, David Metzger, Mario Rossi and Michael Schwarzkopf are standing for re-election, while Emese Weissenbacher is not.

Christian Koehl Germany

kallanish.com