Majority of EU HRC mills inactive in the market, offer rise likely

Majority of the European steelmakers have withdrawn offers of hot-rolled coil on Aug. 22 and they are expected to return to the market in early September, seeking higher prices.

Only one German steelmaker has been offering HRC at Eur650/mt ex-works Ruhr or delivered Ruhr, depending on the buyers’ location. Other German and Northwest European mills have withdrawn offers from the market or remained inactive.

Some sources said that the big steelmaker has already increased offers by Eur50/mt, but the information has not been widely confirmed in the market. Majority of market participants expect the EU mills to increase prices by at least Eur50/mt and the new target price would be Eur700/mt ex-works Ruhr.

“The mills will increase offers after September holidays,” a German service center source said. “They hope that the seasonal demand recovery would give an impulse that would increase the prices.”

Market participants estimated tradable values at Eur630-650/mt ex-works Ruhr.

Platts assessed domestic prices for hot-rolled coil in Northwest Europe up Eur10/mt on the day at Eur645/mt ex-works Ruhr on Aug. 22.

Buyers, however, have been skeptical about bullish mood of the mills due to largely negative demand outlook for the second half of the year.

“I do not see buyers accepting higher prices, as demand outlook remains rather gloomy,” a trader said.

Platts is part of S&P Global Commodity Insights.

Author Maria Tanatar

European HRC market awaits higher offers after summer break

European prices for steel hot-rolled coil remained flat in a seasonally slow market on Tuesday August 22, with the post-summer expectations bullish among mills and cautious among buyers, Fastmarkets heard.

Fastmarkets calculated its daily steel hot-rolled coil index, domestic, exw Northern Europe, at €635.00 ($691.48) per tonne on Tuesday, up by €0.42 per tonne from €634.58 per tonne the previous day.

But the index was down by €9.58 per tonne week on week and down by €21.25 per tonne month on month.

Firm offers were rare in the market, while buyers’ estimates of tradeable prices were reported between €630 and €650 per tonne ex-works.

European producers were mulling price increases from September, according to several sources, amid expectations of increased trading and tighter supply, due to maintenance work at some mills.

Some mills gave price ideas of €700 per tonne ex-works for October-November rolling HRC. But other market sources pointed out that some mills still have September-rolling HRC available.

“Steel-service centers form their pricing policy based on expectations of [HRC] offer prices starting with a ‘7’ [meaning €700 per tonne or more]. However, it is still debatable whether such prices could be achieved,” a trading source said.

Buyers were skeptical that such massive rises would actually be accepted, considering the gloomy prospects for consumption.

“End-user demand is likely to remain low,” a second trader said. “We do expect some restocking, because distributors and steel service centers will need to close gaps in [their] stocks, but restocking is likely to be limited.”

Fastmarkets’ calculation of its daily steel hot-rolled coil index, domestic, exw Italy, was €627.50 per tonne on Tuesday, down by €2.50 per tonne from €630.00 per tonne the previous day.

The Italian index was also down by €6.18 per tonne week on week, and down by €10.83 per tonne month on month.

There was no trading in the Italian market due to seasonal absences. Local mills and buyers were expected to come back to the market in the week starting August 28.

Market sources suggested that Italian mills were likely to push offers to €700 per tonne ex-works, but doubted that such prices would be accepted by buyers, given the slow demand and the availability of import tonnages bought at competitive prices, expected to arrive into the market during September.

Currently, buyers’ estimates of tradeable prices for HRC were no higher than €620-640 per tonne ex-works.

Offers of November-December delivery HRC from Asian mills to Italy were reported at €600-630 per tonne CFR.

Published by: Julia Bolotova

Chinese surge lifts global steel output in July

Global crude steel output increased 6.6% on-year in July to 158.5 million tonnes, as Chinese output surged and US production remained stable, Kallanish notes from worldsteel data. It was however down 0.5% on June.

Chinese steel output was up 11.5% on-year in July to 90.8mt, while Indian output grew 14% to 11.48mt. Japanese output was up 1% to 7.39mt but South Korean production fell 9% to 5.7mt. Compared to June, however, Chinese output was slightly down.

EU27 output dropped 7% on-year in July to 10.3mt, with German output down 0.5% to 2.96mt but Italian production estimated up 2.8% to 1.65mt. Spanish and French output were both estimated to have fallen. EU output also fell 2% versus June.

Turkish production rose 6% to 2.89mt.

US production inched up 0.5% to 6.95mt, but Brazilian output fell 4.7% to 2.7mt.

Russian output is estimated to have risen 5.8% in July to 6.3mt.

Crude steel output in the 63 countries monitored by worldsteel was thus flat on-year in January-July at 1.103 billion tonnes.

Adam Smith Poland

Polish housing construction downtrend could accelerate: ING

Polish housing construction is unlikely to improve this year and the downtrend could even accelerate till year-end, while positive industrial and commercial construction will not be sufficient to offset this, says ING Bank.

Polish construction output rose by 1.1% year-on-year in July, significantly below expectations of 2.5%. EU-backed infrastructure projects continue to be the main growth driver, while housing remains a major drag, the bank says in a note sent to Kallanish.

Civil engineering, which rose by 11.8% year-on-year, remains construction’s biggest growth driver. “This is most likely because there are still incomplete infrastructure projects planned under the last settlement year of the ‘old’ EU budget. The experience of previous EU budget perspectives allows us to assume that dynamic growth in this category will be maintained (or even accelerated) until the end of this year,” ING observes.

The construction of buildings, primarily residential, remains the weak spot, falling by 7.8% in July. The number of housing units under construction remains on a strong downward trend from record levels in the first half of 2022 but is still at a fairly high historical level.

“Combined with weak demand at the turn of the year, the result is a very high number of apartments on offer, enough to cover demand for many months. Therefore, even a significant increase in interest in housing related to the government’s ‘2% Safe Credit’ programme will not be enough to substantially improve housing construction this year,” ING says.

Major Polish rebar producer CMC Poland said last month that May-quarter performance was impacted by Polish construction activity decelerating and industrial production across Central Europe remaining muted.

Adam Smith Poland

EU coil demand, mills’ backlogs appear blurry

The EU coil market remains quiet amid the typical summer season and September is not seen bringing a major change, with observers keeping their expectations modest.

“I feel like demand will slightly pick up, but there will not be a big jump – the main reasons [as previously] for demand weakness remain valid,” one Swiss-based source tells Kallanish. Concurring, a Scandinavian buyer considers demand from the automotive industry to be fairly okay, but sentiment in other sectors to remain weak. Both see prices from northwest European mills still hovering at around €650/tonne ($707) for hot rolled coil, with an €80+ premium for cold rolled and around €100+ for galvanized coil.

One mill source claims price levels are some €50/t above that. He also sees “relatively stable demand in most segments and very strong demand in the automotive and heavy truck industry.” However, those mills not primarily serving those sectors will be more prone to making price concessions.

One Dutch buyer notes that several EU steelmakers claim their order books are full, partly due to the holiday period and maintenance work. But he also observes that some mills are looking for new orders and wonders to what extent mills can be trusted regarding what they say about their utilisation and order backlogs. He sees current delivery times of October to November, “which does not make most buyers too nervous at the moment”.

A Belgian buyer tells of lead times into December at one mill group. But he is critical as to whether this translates to real demand. “I can’t imagine they have that many orders, so that points to deliberately reduced capacity,” he says.

Christian Koehl Germany

European HRC market remains subdued amid holiday closures

The European hot-rolled coil market remained quiet on Monday August 21 amid ongoing seasonal closures.

Buyer sources in the hot-rolled coil market were bearish regarding future price direction. At the same time, mill sources reported greater optimism regarding post-holiday opening prices.

Fastmarkets calculated its daily steel hot-rolled coil index, domestic, exw Northern Europe, at €634.58 ($689.68) per tonne on Monday, down by just €1.67 per tonne from €636.25 on August 18.

The index was also down by €10 per tonne week on week and by €21.67 per tonne month on month.

Buyers and mills remained largely absent from the market because of summer holiday closures.

Activity was expected to rebound toward the end of August and beginning of September when mills reopen following closures, sources said.

Buyer sources estimated tradeable levels in Northern Europe to be around €630-640 per tonne ex-works for September-rolling coil.

Fastmarkets’ calculation of its corresponding daily steel hot-rolled coil index, domestic, exw Italy, was €630.00 per tonne on August 21, unchanged from August 18.

The Italian index was down by €3.68 per tonne week on week, and down by €8.33 per tonne month on month.

The Italian market was seasonally quiet, with trading close to nil.

Buyer estimates were in the region of €620-640 per tonne ex-works, close to trading levels before the holiday season began.

Offers for November/December-delivery HRC from Asian mills were reported at €600-610 per tonne CFR to Italy on Monday.

Published by: India-Inés Levy

Steel rebar, wire rod prices largely flat in Poland; post-summer rebound unlikely: sources

Domestic prices for steel rebar and wire rod in Poland were broadly unchanged over the past seven days with trading limited due to seasonality and chronically weak construction demand, sources told Fastmarkets on Friday August 18.

Rebar offers from three local producers were broadly stable week on week, in the range of 2,680-2,700 ($652-657) zloty per tonne CPT, which would net back to about 2,650-2,680 zloty per tonne EXW.

One producer in the south of Poland, in the Silesian Voivodeship, was rumored to have stopped rolling operations in a face of slow demand, but it was not widely confirmed by all source before the publication deadline.

Rare transactions were reported within the range of 2,630-2,650 zloty per tonne ex-works during the week. Mills in the region were able to offer rebar from stock with quick shipment, market sources said.

“Demand still weak, only hope is that really some construction projects will start from September, but in general I think rollover [of rebar prices] is the best scenario we can expect,” a trading source said.

In July the Polish government launched a support program for the nation’s “first home buyers,” offering housing loans with a fixed 2% interest rate over 10 years, with the difference to the actual interest rate covered by the state.

That program, available for young people only for their first house or apartment purchase, is supposed to stimulate residential construction, sources said, but only starting 2024.

“As for subsidies for purchase of first apartment, it should revive residential construction area, but I think it will happen 1Q or even 2Q of 2024,”  a second trader said.

At the same time, public construction sector in the nation was underperforming due to lack of funding, source said,

Fastmarkets’ weekly price assessment for steel reinforcing bar (rebar), domestic, exw Poland was 2,630-2,650 zloty per tonne on Friday, narrowing upwards by 30 zloty per tonne from 2,600-2,650 zloty per tonne seven days ago.

In the secondary market, rebar prices were reported at 2,720- 2,750 zloty per tonne CPT, largely flat week on week.

Wire rod
The wire rod market in Poland has also been extremely quiet recently due to both seasonality and lackluster end-user demand.

Fastmarkets’ weekly price assessment for steel wire rod (drawing quality), domestic, delivered Poland was 2,750-2,800 zloty per tonne on Friday, unchanged since July 7.

The assessment was based on rare deals reported at 2,750-2,760 zloty per tonne CPT and offers from local mills heard at 2,800-2,900 zloty per tonne CPT.

Import wire rod offers to Poland were also stable over the past seven days. European suppliers were largely out of the market due to summer
holidays.

One Ukrainian supplier was offering mesh-quality wire rod from stock at €610-615 ($663-669) per tonne CPT depending on tonnage, sources said.

Another Ukrainian supplier was offering mesh-quality wire rod at €585 per tonne CPT from stock. At the same time, one source noted that at the border, the same supplier was offering wire rod at around  €530 per tonne DAP, which would net back to about €560-565 per tonne CPT.

Published by: Julia Bolotova

European HRC buyers skeptical about post-summer price rebound

Buyers and producers of steel hot-rolled coil in Europe have different expectations of how prices will develop after the summer holiday period, Fastmarkets heard on Friday August 18.

Buyers were broadly pessimistic, expecting either a rollover of prices or even a slight decrease, citing slow demand from the end-user side. They also expected an influx of cheap imports into Europe to weigh on the domestic HRC market.

Buyer sources claimed that rapid take-up of the EU import quotas would only limit imports in September and that, from October 1, when the new quota period will start, Europe will be “flooded” with cheaper import alternatives which had been booked in June-July at quite low prices.

“The only thing European mills could do to shift the balance in the market would be to reduce their own output and take a more unified approach to pricing, because we still can see some producers making panic sales at quite low prices,” a trading source said.

Buyers also said that European mills had gaps in their order books and that most of them were still able to offer September-rolling coil.

Currently, buyer sources estimated the tradeable price for HRC in Northern Europe at €630-640 ($685-696) per tonne ex-works for September-rolling material.

And one source reported hearing of a transaction for HRC of Central Europe origin during the week at €665 per tonne delivered for September delivery.

Mills sources were more optimistic, hoping to achieve some uptick in HRC prices in the spot market in September on expected restocking activity and lower availability of imports.

“The level of stock is quite low across the entire supply chain, so buyers will come back for volumes,” a mill source said.

Fastmarkets calculated its daily steel hot-rolled coil index domestic, exw Northern Europe at €636.25 per tonne on Friday, down by just €1.67 per tonne from €637.92 the previous day.

The index was also down by €8.33 per tonne week on week and by €34.58 per tonne month on month.

Fastmarkets’ calculation of its corresponding daily steel hot-rolled coil index domestic, exw Italy was €630.00 per tonne on Friday, down by €2.50 per tonne from €632.50 per tonne on the previous day.

The Italian index was down by €3.68 per tonne week on week, and down by €18.75 per tonne month on month.

The Italian market was seasonally quiet, with trading close to zero.

Buyer sources believed that the achievable price for September-rolling coil was no higher than €620-640 per tonne ex-works, similar to transaction levels seen before the summer maintenance closures.

But producers were expected to push offer prices substantially upward for September-October rolling — to €680-700 per tonne ex-works, several sources told Fastmarkets.

Buyers, however, were skeptical about such massive rises, given the lack of end-user demand.

Offers of November-December delivery HRC from Asian mills were reported at €610-630 per tonne CFR to Antwerp during the week.

Published by: Julia Bolotova

Knauf Interfer sources green steel from tk Hohenlimburg

Knauf Interfer Cold Rolling and thyssenkrupp Hohenlimburg have signed a memorandum of understanding on the purchase of CO2 -reduced steels, Kallanish hears from the companies.

Knauf Interfer Cold Rolling is a cold-rolling unit of the larger Knauf Interfer Group, Germany’s third-largest steel distributor/processor company. As a first step starting this year, tk Hohenlimburg will supply steels with a lower CO2 footprint by using recycled scrap (Bluemint Recycled). From the end of 2026, Knauf Interfer will also purchase steels from the Bluemint Steel product family, which will be produced using the direct reduction process with the aid of green hydrogen.

Thyssenkrupp Hohenlimburg makes hot-rolled special steel strip, so-called Hohenlimburg medium strip, manufactured in widths of up to 720mm and thicknesses of 1.5-16mm. It is used as input for the cold-rolling industry, as well as in direct processing, primarily in the automotive supply industry. Hohenlimburg is a district of Hagen, where most independent cold-rollers are located.

The memorandum comes in addition to an agreement signed in June between the larger groups, Knauf Interfer and thyssenkrupp Steel Europe, for the purchase of CO2-reduced steels. That agreement concerned the group’s units Knauf Interfer Stahl Service Centre, Knauf Interfer Automotive Blanks, and also Knauf Interfer Cold Rolling.

Christian Koehl Germany

Supplier Snop secures low-emission steel from Salzgitter

Automotive supplier Snop has signed a memorandum of understanding with Salzgitter Flachstahl to secure CO2-reduced steel from the SALCOS (Salzgitter Low CO2 Steelmaking) route.

Snop is a long-standing partner of Salzgitter Flachstahl, the strip making unit of Salzgitter Group, and procures mainly surface-coated flat steel products. In addition to locations in Germany, Salzgitter Flachstahl also supplies to Snop production sites in Slovakia, Poland, the Czech Republic and France, Kallanish notes.

In June, Snop signed with ArcelorMittal to experiment with the use of its high-strength, low carbon-emissions “Usibor” steel in structural car parts. While tests are underway, the two firms signed an agreement that also covers the supply and purchase of other XCarb solutions, including XCarb green steel certificates.

In the course of the SALCOS transformation programme, Salzgitter will gradually convert its steel production to hydrogen-based processes. The goal is to achieve virtually CO2-free production as from 2033. This involves replacing the conventional blast furnace route with a production route harnessing direct reduction and electric arc furnaces.

Christian Koehl Germany