Ugitech to decarbonise operations with hydrogen plant

Swiss Steel’s France-based stainless subsidiary Ugitech will build a green hydrogen production plant at its Ugine site in Savoie, in the French Alps, to help decarbonise part of its steelmaking process. The plant will be supplied and installed by local green hydrogen producer Lhyfe.

Ugitech produces around 200,000 tonnes/year of steel. By replacing with green hydrogen the natural gas used in some of its thermoprocessing equipment including burners, reheating furnaces, and heat treatment furnaces, it expects to cut about 16,000t of annual CO2 emissions. The new unit is scheduled to produce up to 12 t/day of hydrogen for a maximum electrolysis capacity of 30 megawatts.

The green gas produced on-site will mostly be consumed by Ugitech. Lhyfe is also considering supplying hydrogen to local mobility and other industry players in the area. It intends to help develop the local hydrogen ecosystem, particularly in the run-up to the 2030 Winter Olympics.

The project is now entering the feasibility study phase, a source close to Lhyfe tells Kallanish. She adds the Ugitech project is still at an early stage of development and there is no date yet for the beginning of construction.

In parallel, Ugitech is coordinating the HYdreams project that kicked off in April 2023 and will end in 2027, supported by EU funds. HYdreams aims to demonstrate the feasibility of replacing natural gas with decarbonised hydrogen in reheating and heat treatment furnaces.

“Using laboratory tests and industrial demonstrators, this project … will verify that hydrogen combustion will have no negative impact on processes and products. The next step is to roll out this new solution to all systems for which direct electrification is not a compatible option,” the steelmaker said.

Natalia Capra France

Imports mirror EU consumption rebound, following consecutive declines

EU apparent steel consumption fell 9% on-year in 2023 to 126 million tonnes, compared to earlier projections of a 6.3% drop. This was despite fourth-quarter demand rising 2.8% on-year, following six consecutive quarters of decline, Eurofer points out.

The Ukraine war impact and high energy costs put steel demand into a downtrend since the second quarter of 2022. This deteriorated until Q4 2023 as a result of growing global economic uncertainty, high interest rates and overall manufacturing weakness.

EU apparent steel consumption is seen rebounding 3.2% in 2024, but this compares to the previous projection of 5.6% growth (see Kallanish passim).

EU domestic deliveries also rebounded in Q4, by 1.3%, after seven consecutive drops, but full-year deliveries remained down 7.9%.

Steel imports into the EU reflected the demand rebound, surging 11% in Q4. They dropped 8.5% over the full year, but so did EU demand, meaning imports’ share of apparent consumption remained high, at 27%, Eurofer says.

In January-February 2024, the growth continued as imports rose a further 4% on-year, with flat steel imports alone surging 33%. For finished steel imports, India had a share of 13.3%, then Turkey with 11.4%, South Korea with 10.6%, Vietnam with 10% and Taiwan with 9.6%.

EU finished steel exports fell 2% in 2023 due to a 7% drop in flats shipments and despite 10% growth in longs. January-February 2024 finished steel exports rose 9%, but overall steel shipments abroad fell 2%.

Two-month finished steel exports surged to United Arab Emirates by 252% and Ukraine by 56%, as well as Egypt and the UK by 24% and 22% respectively. They fell however to the US by 4%.

The EU’s total steel trade deficit narrowed in 2023 to 1.3mt from 1.6mt in 2022.

Adam Smith Poland

Tubos Reunidos eyes fourth-quarter first zero-emissions pipe launch

Spanish tube supplier Tubos Reunidos (TR) plans to become the world’s first producer of seamless pipe without emitting CO2 from its operations and energy consumed, Scopes 1 and 2, Kallanish notes.

The tube supplier confirms a significant part of its activity in 2024 will focus on low-emission production. This will strengthen a segment that will be one of the key areas of its growth and value generation.

The company will start producing the so-called O-Next pipe in the fourth quarter, with initial output of 2,000 tonnes. TR says it has already secured its first orders.

“Our commitment to the decarbonisation of the industry will be reflected with the introduction of this kind of new tube to the market,” TR comments. “This range of products responds to the growing market demand for sustainable steel and is the result of the industrial and investment commitment that we carried out within the company’s 2021-2026 Strategic Plan, as well as the measures implemented to advance in energy efficiency, environmental footprint reduction and circularity.”

Tubos Reunidos’ low-emission production is based on electric arc furnaces. The company developed its first zero-emission seamless pipe using recycled raw materials and renewable energy. Electricity is supplied through the installation of more than 30,000 solar panels on the roofs of its plants. This means TR is among the companies in the northern Iberian Peninsula with the largest installed solar capacity for self-consumption.

Todor Kirkov Bulgaria

Eurofer again downgrades European steel demand outlook for 2024

Apparent steel demand in Europe was likely to recover in 2024, according to regional steel industry association Eurofer, but at a slower pace than previously predicted, it said in its second-quarter outlook.

Apparent demand was expected to recover by 3.2%, rising to 130 million tonnes in 2024, Eurofer said in its report, published on April 29. It revised downward its previous, more optimistic forecast in February of a 5.6% recovery to 137 million tonnes for the year.

“The overall evolution of steel demand remains subject to very high uncertainty,” Eurofer said. “Quarterly improvements in apparent steel consumption are expected to continue throughout 2024, albeit resulting in volumes still below pre-pandemic levels.”

For 2023, Eurofer reported apparent steel demand in the bloc to have declined by 8.7% year-on-year, to 126 million tonnes, compared with 138 million tonnes in 2022, marking the fourth annual downturn in the past five years.

Apparent steel consumption in the EU did improve in January-February, however, with flat steel prices recovering, supported by restocking.

Fastmarkets’ daily steel hot-rolled coil index, domestic, exw Northern Europe, averaged €731.73 ($784.15) per tonne in January, sharply up from a monthly average of €688.20 in December 2023. The January average was the highest since May 2023.

In February, however, the situation changed and prices started to decline due to a lack of both apparent and real demand.

In March 2024, Fastmarkets’ Northern Europe HRC index averaged €691.99 per tonne, and the price has continued to decline in April.

“The key problem is lack of end-user demand,” a distributor in Germany said. “In the first quarter of 2024, we saw 15-20% fewer orders from the automotive industry compared with the previous year.”

Since early February 2024, HRC prices in Europe have been going down practically non-stop, hitting rock-bottom in late April.

End-user outlook
The automotive industry in Europe was one of the few steel-consuming sectors to perform well in 2023, with data from the European Automotive Manufacturers Association showing that new car registrations rose by almost 14% in 2023, with more than 10.5 million new vehicle sales.

Eurofer said that automotive output in the bloc increased by 8.5% overall in 2023, revised slightly downward from its previous recovery rate prediction of 8.8%.

But overall output levels in the sector remained low in historical terms, with the industry continuing to be exposed to external factors and expected to remain at the levels seen in 2018-19. The sector was expected to decline by 0.4% in 2024 (revised down from 0.1% growth in a previous outlook) and to increase by 0.8% in 2025 (revised up from 0.2% growth).

Market participants said that demand for steel coil from the automotive industry was broadly stable at low levels through 2023 and was not expected to show any significant rebound in 2024.

Market sources said that some mills have already started negotiations for long-term contracts with end-users in the automotive industry for the second half of 2024, with HRC target prices reported around €780 per tonne, compared with around €750-800 per tonne for the first half of 2024.

“Mills want a rollover [in long-term contracts], but end-users are trying to bring [HRC] prices down,” a steel service center said.

The construction industry, meanwhile, declined by a moderate 1% in 2023, Eurofer said, revised from a 2.1% decline forecast in February, after having grown by 4.8% in 2022.

The construction sector accounts for 35% of steel consumption in the EU

For 2024, Eurofer said that construction activity would continue to decline, falling by 1.9% rather than its previous prediction of a 0.4% decline.

“While overall construction activity is expected to continue benefiting to a limited extent from governmental housing support and public construction schemes,” Eurofer said, “the effect of these publicly funded construction schemes is expected to significantly decrease in 2024 due to multiple downside factors.

“[These include] the shortage of construction materials, their rising prices, as well as reduced fiscal room for construction spending in EU countries,” it added. “These issues have resulted in declining construction confidence.”

Weak construction demand has taken a toll on the European long steel market in recent months, with high interest rates limiting activity, especially in the residential sub-sector.

“Civil engineering is expected to continue to provide the strongest contribution to the construction sector’s performance, but to a lesser extent,” Eurofer said. “This sector will continue to be supported by EU-wide public policies, but their effects have become increasingly uncertain and difficult to quantify due to the recent deterioration of the economic outlook.”

Fastmarkets’ price assessment for steel reinforcing bar (rebar), domestic, delivered Northern Europe, averaged €648.75 per tonne in March 2024, down by €8.75 per tonne from a monthly average of €657.50 per tonne in February 2024. The assessment was sharply down, however, from a monthly average of €720.00 per tonne in March 2023.

Published by: Julia Bolotova

ArcelorMittal closes coke plant in Zenica but keeps long-steel production

On April 26, ArcelorMittal closed its coke plant in the town of Zenica, located in the Zenica-Doboj canton in the center of Bosnia & Herzegovina, a company spokesperson told Fastmarkets on Tuesday April 30.

The process started gradually on April 25, with the suspension of the coke battery firing, and ended on the next day, when the plant’s coke ovens were discharged.

“The company has taken all the necessary measures and operations to ensure that the above-mentioned process went safely and with minimum impact on the environment,” the spokesperson said.

The closure of the coke plant was announced at the end of March, with ArcelorMittal Zenica citing rising production costs — particularly of electricity, natural gas and logistics — and reduced demand for finished steel. According to the company, sales in 2023 were historically low.

ArcelorMittal Zenica will continue to produce long steel via blast furnace (BF), purchasing coke from external sources, according to the spokesperson.

“After stopping the coke battery, total emissions of the Zenica plant will go down to the lowest level since the beginning of operation of the steelmaking factory in Zenica, which started 132 years ago,” the spokesperson said.

ArcelorMittal Zenica has a BF with a capacity for 1.10 million tonnes per year and a basic oxygen furnace with a capacity for 1.14 million tpy. According to Fastmarkets’ information, the plant outputs around 800,000 tpy of steel rebar and wire rod, which places it among the largest producers of long-steel products in the Balkans.

ArcelorMittal Zenica operates in long-steel markets, which have been weak across Europe due to slow demand from the construction sector, which is a key end user.

For instance, Fastmarkets’ price assessment for steel wire rod (mesh quality) domestic, delivered Southern Europe averaged €645.63 ($694) per tonne in March, down from an average of €693.00 per tonne in March 2023.

Long-steel producers across Europe have been pushing for higher prices in the past two weeks, Fastmarkets reported.

But buyer sources told Fastmarkets that a strong rebound in prices was unlikely due to ongoing sluggish demand from the construction sector.

According to ArcelorMittal, the coke plant in Zenica produced an average of around 350,000 tpy of coke.

ArcelorMittal Zenica emphasized that it was working on a reassignment plan for about 200 people who were employed in the coke plant.

“Most of these employees will be reassigned to other production facilities, and the possibility of offering 10-15% of employees a transfer to other ArcelorMittal units in Europe is being checked,” the spokesperson said.

Published by: Darina Kahramanova

European HRC prices inch up, but still below target offers

European prices for hot-rolled coil inched up slightly on higher offers, but buyers questioned the sustainability of the price rise amid still-weak end-user demand, sources told Fastmarkets on Tuesday April 30.

Fastmarkets calculated its daily steel hot-rolled coil index domestic, exw Northern Europe at €632.00 ($677) per tonne on Tuesday, up slightly by €2.42 per tonne from €629.58 per tonne on Monday.

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

European steelmakers were testing the market with higher offers for June-delivery HRC, but higher prices were not sealed in deals.

Notably, an integrated mill in Benelux area was reportedly planning to increase offers from €640 per tonne ex-works to €660 per tonne ex-works for June-delivery HRC.

Another major producer was aiming for €650-660 per tonne ex-works for June-delivery coil.

At the same time, deals were still reported at lower prices — in Germany, a sale of limited-size tonnage was heard at €630 per tonne ex-works earlier this week.

In general, buyers’ estimates of tradeable values were heard within €620-640 per tonne ex-works, but the lower end of the range was reportedly not accepted by mills.

“Even if you bid for bigger [HRC] tonnage, mills are reluctant to give discounts — they clearly signal to the market that lower prices are not available anymore,” a buyer in Germany said.

Sources noted slightly improved apparent buying in the past couple of weeks due to some limited restocking, but real demand was still subdued, so sources were unconvinced about the sustainability of the uptrend.

In Southern Europe, Fastmarkets’ daily steel hot-rolled coil index domestic, exw Italy was calculated at €627.25 per tonne on Tuesday, increasing by €2.25 per tonne from €625.00 per tonne on Monday.

The index was up by €7.25 per tonne week on week but down by €17.75 per tonne month on month.

Offers for HRC with four-to-five-week lead times from local suppliers were at €660-670 per tonne delivered (€650-660 per tonne ex-works), compared with €640-650 per tonne delivered (€630-640 per tonne ex-works) in early April.

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

A transaction was reported at €630 per tonne delivered (€620 per tonne ex-works) for June-delivery HRC on Tuesday.

“Real demand is still weak, while apparent demand improved a bit due to restocking at rock-bottom prices in the second half of April,” a steel service center in Italy said.

“The recent move to increase [HRC] prices indicates the downtrend is over and helps to stabilize the market, but so far buyers are not ready to pay higher prices,” a distributor in Italy said.

In the secondary market, 4 mm HR sheet was traded at €700-740 per tonne CPT from local suppliers and at €690-700 per tonne CPT from a Central European mill.

Import offers for HRC have increased recently, making overseas coil purchases less attractive for European buyers. This was also supportive for domestic prices to increase.

In general, prices for Asia-origin HRC for June-July shipment were consolidating around €600-620 per tonne CFR.

Published by: Julia Bolotova

Buyers reluctant to accept higher HRC offers in Europe; trading limited

Hot-rolled coil producers in Europe were still cautiously positive on Monday April 29, with some suppliers even offering the material at higher prices, but buyers remained reluctant, sources told Fastmarkets.

A steel producer in Northern Europe was said to be offering HRC at €650 ($695) per tonne ex-works on Monday, in contrast to the beginning of last week, when offer prices were mostly around €630-640 per tonne ex-works, sources told Fastmarkets.

And most market participants now expect the mills raise their offer prices again.

Last Friday, sources told Fastmarkets that one leading European steelmaker was planning to raise its offer prices by €30 per tonne for June-delivery material., with the news offers expected to be around €660-680 per tonne ex-works.

But there was no official confirmation about the price hike on Monday.

Northern European buyers, however, refrained from buying HRC, and no major deals were heard in the market.

Market participants estimated the tradable level for HRC in Northern Europe at €620-630 per tonne ex-works.

Fastmarkets calculated its daily steel hot-rolled coil index domestic, exw Northern Europe at €629.58 on Monday, edging down by €0.84 per tonne from €630.42 per tonne on Friday.

The index was up by €4.16 per tonne week on week but down by €34.17 per tonne month on month.

In Southern Europe, Fastmarkets’ daily steel hot-rolled coil index domestic, exw Italy was calculated at €625.00 per tonne on Monday, increasing by €4.37 per tonne from €620.63 per tonne on Friday.

The index was up by €5.83 per tonne week on week but down by €20 per tonne month on month.

Suppliers in Italy were offering HRC at €650-660 per tonne ex-works on Monday, sources told Fastmarkets. In contrast, in early April, the same material was offered at €630-640 per tonne ex-works.

But buyers remained reluctant to accept Monday’s level, and trading was limited.

And market participants estimated the tradable level at €620-630 per tonne ex-works.

Activity in the Italian market was slow at the end of last week due to public holidays in the country and a buyer source told Fastmarkets that this week and next would give a better indication of whether the new, higher prices would be accepted.

Two other buyer sources expressed skepticism, however, and pointed to the fact that real steel demand remains weak.

Among the reasons for the current attempt by mills to raise HRC prices was the increase in the price of Asian HRC being offered to Europe.

On Monday, HRC from Taiwan, Japan and India was on offer at €600-620 per tonne CFR Italy – slightly higher than last week’s €590-600 per tonne CFR, sources said.

Polish rebar, wire rod prices increase on bullish sentiment among producers

Prices for Polish domestic rebar and wire rod increased in the week to Friday April 26 due to continuing bullish sentiment among producers, sources told Fastmarkets.

Local mills were determined to increase their prices due to higher scrap prices in international markets and higher electricity prices, producer sources said.

But demand remained low, and both buyer and producer sources were unsure whether the uptrend would persist. According to market participants, some production cuts would be the best way to balance the market.

After ArcelorMittal increased its prices for all long steel products across Europe by €20 ($21.43) per tonne during the Wire and Tube fair in Dusseldorf, other Polish producers also raised their offer prices.

This week, Polish mills offered rebar in the range of 2,650-2,700 zloty ($657-669) per tonne CPT, which nets back to about 2,630-2,670 zloty per tonne ex-works, sources told Fastmarkets.

This is 30-50 zloty per tonne higher than in the previous week, when offers from local mills were mainly in the range of 2,620-2,650 zloty per tonne CPT, equivalent to about 2,600-2,630 zloty per tonne ex-works.

But Fastmarkets’ sources said that 2,700 zloty per tonne CPT was not a tradeable price.

According to market participants, workable prices were in the range of 2,620-2,650 zloty per tonne CPT, equivalent to 2,600-2,630 zloty per tonne ex-works.

Based on sources’ estimates and increased offers from local mills, Fastmarkets’ weekly price assessment for steel reinforcing bar (rebar) domestic, exw Poland was 2,600-2,650 zloty per tonne on Friday, widening upward by 20 zloty per tonne from 2,600-2,630 zloty per tonne on April 19.

Polish mills had sold good quantities at lower prices in previous weeks, so they could allow themselves to wait for buyers who would accept the new, higher prices, a distributor source told Fastmarkets.

“But no one is buying at 2,700 zloty per tonne CPT, which is indicative that this price is not workable,” the distributor source said.

A second distributor source expressed skepticism about whether the upward trend would last long.

“Mills will try to keep prices higher for two weeks, but when they see there is no demand, prices will drop again. Only the cut and bend companies have a lot of work in Poland,” the second distributor said.

Prices of imported rebar had also increased by about €10-15 per tonne this week, compared with the period before the Wire and Tube fair in Dusseldorf, sources told Fastmarkets.

For instance, imported rebar offers from Germany were heard at €640-647 per tonne delivered Poland.

Wire rod
At the beginning of the week, sources said that Polish mills had not yet announced their offers for May production of low-carbon drawing-quality wire rod.

On Friday, a consumer source reported an offer at 3,050 zloty per tonne CPT.

This was close to last week’s price range of 3,000-3,086 zloty per tonne CPT.

“Polish mills want to increase prices, and currently, there is no one selling at below 3,000 zloty per tonne CPT,” the consumer source told Fastmarkets.

Fastmarkets’ sources estimated tradeable prices in the range of 2,934-3,020 zloty per tonne CPT; no major deals were heard on the market.

As a result, Fastmarkets’ price assessment for steel wire rod (drawing quality), domestic, delivered Poland was 2,934-3,020 zloty per tonne on Friday, up by 70-134 zloty per tonne from 2,800-2,950 zloty per tonne on April 19.

“A price increase is necessary because scrap [prices have] recovered, and [it] seems [they] have found certain stability,” a second producer source said.

For instance, Fastmarkets’ daily index for steel scrap HMS 1&2 (80:20 mix) North Europe origin, cfr Turkey was calculated at $382.09 per tonne on Thursday April 25, its highest since April 3.

A similar trend was observed in Fastmarkets’ daily index for steel scrap HMS 1&2 (80:20 mix) US origin, cfr Turkey, which was calculated at $385.58 per tonne on Thursday, also its highest since April 3.

The second producer source added that the electricity day-ahead price in Poland surpassed €100 per MWh recently, which also affected production costs.

Published by: Darina Kahramanova

European HRC producers aim for higher prices

The trading lull continued in the European hot-rolled coil market on Friday April 26, but sentiment turned cautiously positive after some suppliers pushed their offer prices higher, sources told Fastmarkets.

A leading European steelmakers reportedly withdrew from the market at the end of the week to review their offer prices, Fastmarkets understands. But sources said they expect the mill to return with higher prices on Monday, with offers likely to be up by around €30 ($32) per tonne for June-delivery HRC.

“New offers [for HRC] will be set around €660-680 per tonne ex-works.,” a buyer in Europe told Fastmarkets. “We’ll then see if the market accepts [them], but there has been pressure [for higher prices] from the mills for about two weeks now – partially based on Asian prices rising.”

Other steelmakers are expected to follow suit, sources said.

Earlier this week, offers were reported at €630-640 per tonne ex-works from integrated mills in Northern Europe, while buyers estimated tradable prices at €620-630 per tonne ex-works.

Most market participants agreed that flat steel prices in Europe are likely to have hit rock bottom already, despite sluggish end-user demand, so mills are expected to push for higher prices.

“Trading is still weak, and volumes are not there yet, but the steel mills need better margins,” a source in the Benelux area said.

“I think there is room for some [HRC] price increases, but not a big one,” a buyer in Northern Europe said.

Fastmarkets calculated its daily steel hot-rolled coil index domestic, exw Northern Europe at €630.42 ($675.63) per tonne on Friday, up by €5.04 per tonne from €625.38 on Thursday April 25.

The index was up by €4.92 per tonne week on week but down by €37.08 per tonne month on month.

In Southern Europe, Fastmarkets’ daily steel hot-rolled coil index domestic, exw Italy was calculated at €620.63 per tonne on Friday, unchanged day on day.

The index was up by €0.63 per tonne week on week, but down by €31.04 per tonne month on month.

The domestic market in Italy was largely inactive on Friday due to a public holiday in the country.

Earlier this week, however, a domestic supplier increased its offer prices for HRC, but it was unclear whether buyers were willing to accept the higher offers, which came in at €660-670 per tonne delivered (equivalent to €650-660 per tonne ex-works), compared with €640-650 per tonne delivered (€630-640 per tonne ex-works) in early April.

This was also in stark contrast to the most recent transactions, which were heard at €620-630 per tonne ex-works.

Some sources pointed out that rising HRC import prices and restocking in mid-April were likely to have supported the bullish attempts by the steel mills.

But others were more cautious and said that a strong price rebound was unlikely in the near term because there was no support from real steel demand.

“In May, we will either see stabilization or a €10-15 per tonne rebound in a best-case scenario,” a source in Italy said. “The core problem is demand.”

In the week to Friday, offer prices for Asia-origin HRC for June shipment were reported at around €590-610 per tonne CFR, with the lower end only offered by Vietnamese mills.

Published by: Julia Bolotova

Components shortage impacts Spain’s car industry in March

Spanish car production suffered input material supply problems during March, Kallanish notes. The country saw a shortage of components at several plants, a consequence of the delays caused by the Red Sea shipping crisis. Production and exports also declined following lower demand during Easter.

Output in March was 195,252 units, compared to 227,923 vehicles in February and down 17.7% versus the same month in 2023. Three-month production amounted to 654,825 units, 0.5% less from January-March last year.

Meanwhile, Spanish vehicle exports slipped due to lower demand in markets outside Europe. Supplies were 174,138 units, a fall of 14.7% on-month and 16.8% weaker than in March 2023.

European markets had a 92.7% share in Spanish deliveries in March, down 0.5 percentage points on-month, but up 2.5pp on-year. Three-month exports declined 1.8% over the same period in 2023 to 579,988 vehicles, Anfac data show.

Todor Kirkov Bulgaria