European HRC market slowly restarts after holidays, bullish sentiment prevails
Producers in Northern Europe kept offering steel HRC in the range of €720-750 ($788-821) per tonne ex-works. But demand was still slow, and no major deals were heard in the market.
“Most buyers just came back to work after a two-week break, we will need a few days to figure out the market situation,” a distributor in the EU said.
Two buyer sources estimated the tradable market level to be between €700 per tonne and €720 per tonne ex-works. A third buyer source expressed the opinion that even a bit lower could be achieved, in the range of €690-700 per tonne ex-works.
But several sources told Fastmarkets that European mills were unlikely to sell coil below €700 per tonne ex-works since supply was still limited due to output cuts.
“The mills will not go down below €700 per tonne in spot sales due to good order books”, a buyer source told Fastmarkets.
Most mills could only offer material for March delivery already, while one integrated steelmaker told Fastmarkets they were already offering early-April delivery.
Fastmarkets calculated its daily steel hot-rolled coil index domestic, exw Northern Europe at €705.63 per tonne on Monday January 8, increasing by €10.63 per tonne from €695 per tonne January 5.
The index was up by €10.13 per tonne week on week and up by €20.21 per tonne month on month.
No new import offers or bookings were heard in the market.
Last week, sources told Fastmarkets that a lack of competitive imports could support a domestic price rebound for HRC in Europe during January. The mills were offering higher prices for March-delivery HRC because they expected buyers to be short of options with flat steel output in Europe being reduced domestically due to the depleted safeguard quotas.
Fastmarkets calculated its daily steel hot-rolled coil index domestic, exw Italy at €691.25 per tonne on January 8, increasing by €1.67 per tonne from January 5.
The index was up by €2.92 per tonne week on week and up by €25.83 per tonne month on month.
Mills in Italy continued offering steel HRC in the range of €720-740 per tonne delivered for February-March delivery. Some sources, however, said, that February delivery was gradually sold out at integrated mills in the nation. But, similarly to the market situation in Northern Europe, demand for coil remained slow, and no major deals were heard in the market.
Two buyer sources estimated the tradeable values for steel HRC in the range of €680-690 per tonne ex-works. But another two buyer sources found these levels too low and estimated the workable market level at about €700 per tonne ex-works.
“It is unsustainable for the Italian mills to sell HRC below €700 per tonne ex-works due to the high production costs,” a second buyer source told Fastmarkets.
The second buyer source added that the limited availability from imports would also influence prices. The source said that buying the material from abroad would mean waiting for its clearance from customs by July.
The source said that prices in Italy would likely reach €740-750 per tonne delivered in the next few weeks and added that those were generally in line with the levels offered now in Northern Europe.
Published by: Julia Bolotova, Darina Kahramanova
Celsa’s new service centres obtain Aenor’s sustainable certification
Spanish certification authority Asociación Española de Normalización y Certificación (Aenor) has awarded steelmaker Celsa’s three new service centres with the Sustainable N Mark, Kallanish notes. This includes the Illescas facility in the Castilla–La Manch region, Barcelona-based Castellbisbal and Seville’s Dos Hermanas.
“With this recognition, we continue to make progress in building a more sustainable future and we are convinced that the market will increasingly recognise the responsible commitment of companies like ours and choose products that contribute to reducing the carbon footprint, such as our circular steel,” says Celsa Steel Services product director Xavier de la Hoz. “The certification confirms that steel products are sustainable from an ESG standpoint, and it reinforces Celsa’s commitment to achieving net zero.”
Aenor’s N Mark distinguishes more than 100,000 products in 53 countries, recognising sustainability factors through the analysis of 60 product indicators from the industry and construction sectors.
Todor Kirkov Bulgaria
German fabricators bemoan doubling of grid fees
Germany’s steel and metals fabricators are alarmed about a doubling of power grid fees they face in 2024.
Grid operators have announced an increase of the fees from 3.12 to 6.43 euro cents (3.40-7.02 US cents) per kilowatt hour, as the federal government will be axing its subsidies. Fabricators federation WSM is calling on the economy ministry for an explanation for the measure, which will hit companies and consumers, it says in a statement received by Kallanish.
The subsidies used to amount to €5.5 billion, while the total of grid fees amounts to around €30 billion. “Why would this abandonment cause a doubling of fees for us? There is no explanation for it,” says WSM managing director Christian Vietmeyer.
WSM also questions an increase in the total fees, which will rise from €28 billion to €31 billion. “Why an increase of 10%, while regular energy actually drops in price due to lower costs for fuels?” asks WSM’s head of energy and industry policy, Holger Ade.
The federation has called on economy minister Robert Habeck to clarify the hikes. “The government must question these increases, and cannot put them on the shoulders of users and consumers alone. We need a cap and sharing of the pain, and that includes the energy industry,” WSM says.
Steelmakers federation WV Stahl, too, has addressed the topic. It issued a statement by the association of energy-intensive industries (EID), which includes construction materials, paper, chemicals, glass, and nonferrous metals. “In order to survive in international competition, and to achieve the transition to climate-friendly technologies, we need internationally competitive power costs. This includes a stabilisation of grid fees,” EID writes.
Christian Koehl Germany
EU import quotas for Chinese HDG, HRC and wire rod ‘other country’ quotas filled swiftly
Steel import quotas into the European Union for Chinese hot-dipped galvanized coil as well as quotas in the other country categories for wire rod and hot-rolled coil have filled up swiftly following the beginning of the new quota period Jan. 1.
According to data from the European Commission last updated Jan. 4, hot-dipped galvanized coil imports from China in the category 4B have exceeded the 126,603 mt balance by 52% with a staggering 1.9 million mt waiting to be allocated.
A 25% duty will apply on imported material once a quota has been filled. Category 4B is material used for the automotive sector. The quota for India in category A (industrial use) remains 78% open but 11,688 mt are awaiting allocation adding to the remaining balance of 34,909 mt. Platts, part of S&P Global Commodity Insights, assessed the weekly Northern European HDG assessment at Eur790/mt EXW Ruhr Jan. 3, up Eur/5 mt on month. Quotas for other countries, Korean or Indian material for both HDG categories have remaining balances of 83-100%.
The “other country” quota of 923,594 mt of imports of European HRC has also been filled swiftly with an already registered excess of 18.37% and 1.09 million mt awaiting allocation. Jan. 4
The country-specific quota for Korean HRC has 67.27% remaining out of a 184,008 mt balance and 60,280 mt awaiting allocation. Turkish and Serbian HRC quota levels remain at over 90% available.
“We also suspect the quota for Q2 might also be exhausted,” said a German distributor.
Market participants reported no interest for imported hot-rolled coil among European buyers with most of them concerned about quotas already getting exhausted.
“The materials are now being left at ports, but the high interest rates and high cost of storage are also concerning,” said another German distributor.
An Italian trader also said that storing material for clearance in the second quarter may be risky, which makes imports less attractive to buyers now.
Platts assessed HRC Northern Europe at Eur690/mt EXW Ruhr Jan. 3, stable on month, while the import assessment stood at Eur650/mt CIF Antwerp Jan. 3, which means there is only a Eur40/mt price difference between domestic and import prices which further leads to muted buying interest.
EU HRC mills target bullish offers due to healthy order books, buyers still on sidelines
European hot-rolled coil mills targeted bullish offers Jan. 4 due to healthy order books even though buyers remained on sidelines and were expected to return the coming week.
“The market is not active yet,” a German distributor said. “Business will get back to normal next week.”
Mills maintained an optimistic outlook after having closed some half-yearly contracts for HRC at target offer levels, while most have healthy order books up to February.
Market participants expected trading activity to pick up in the coming week as buyers return post holidays, although no tradable levels were heard during the day.
Mills offered domestic HRC at Eur745-750/mt ex-works Ruhr for March shipment.
Platts assessed the price of domestic hot-rolled coil stable on the day at Eur690/mt EXW Ruhr Jan. 4.
Interest for imported material remained lackluster as safeguard quotas for HRC in first quarter from other countries were exhausted. Buyers remained hesitant about storing material at the ports for the possibility of clearance in Q2 due to high costs.
According to data from the European Commission, HRC import volumes awaiting allocation from other countries have already exceeded the total quota at around 1.09 million mt, as of Jan. 3. Total EU safeguard quota for HRC imports from other countries stood at 923,594.27 mt for Q1.
“Smaller traders, stockists and service centers aim to buy less of imports this year to reduce risks,” a German distributor source said. “People are currently reluctant to conclude deals for imported material.”
No firm offers were heard for imported HRC during the day.
Platts assessed the price of imported HRC in Northwest Europe stable on the day at Eur650/mt CIF Antwerp Jan. 4.
Author Rituparna Nath
US steel import licenses jump 14% on month in December: Commerce
Total US steel imports are expected to rise on the month and on the year for December amid higher import licenses for oil country tubular goods and hot-rolled coil to close out 2023, according to the US Commerce Department data Jan. 4.
Licenses to import steel in December stood at 2.09 million mt, up 14% from November’s preliminary import count of 1.83 million mt. Compared with a year ago, licenses to import steel rose 9% from just under 2 million mt imported in December 2022.
The estimated finished steel import market share in December was 21% and is 21% for the full year of 2023, according to the American Iron and Steel Institute.
| December US steel import licenses by product (carbon and alloy mt) | |||
| Product | November preliminary | December licenses | Percent change (%) |
| Slab | 303,414 | 326,022 | 7 |
| HDG | 166,426 | 184,244 | 11 |
| Other semis | 164,817 | 182,354 | 11 |
| HRC | 132,001 | 178,554 | 35 |
| OCTG | 69,327 | 151,861 | 119 |
| Coiled plate | 91,790 | 105,653 | 15 |
| CRC | 85,515 | 94,600 | 11 |
| Wire rod | 69,199 | 68,981 | 0 |
| Coated sheet and strip | 93,184 | 54,229 | -42 |
| Rebar | 69,010 | 34,357 | -50 |
| Source: US Commerce Department | |||
Import licenses for OCTG surged 119% on the month to 151,861 mt, with South Korea accounting for the largest share at 46,710 mt.
Licenses to import sheet products rose from November across all major categories, with HRC seeing the biggest jump at 178,554 mt, up 35% from the prior month’s preliminary total. Platts, part of S&P Global Commodity Insights, last assessed US HRC imports at $850/st DDP Houston Jan. 3.
Import licenses for hot-dipped galvanized steel and cold-rolled coil each rose 11% on the month to 184,244 mt and 94,600 mt, respectively.
Among major product categories, rebar imports are expected to see the steepest drop in December, with licenses down 50% on the month at 34,357 mt amid a lack of licenses from Algeria and Egypt. Platts last assessed the weekly US rebar import price at $770/st on a DDP Houston basis Dec. 29.
Despite a 7% drop on the month, Canada is expected to remain the largest exporter of steel to the US in December, with 452,569 mt of steel from the country licensed for import in the final month of 2023.
| December US steel import licenses by country (carbon and alloy mt) | |||
| Country | November preliminary | December licenses | Percent change (%) |
| Canada | 484,510 | 452,569 | -7 |
| Brazil | 344,769 | 405,859 | 18 |
| Mexico | 224,636 | 259,710 | 16 |
| South Korea | 127,717 | 273,213 | 114 |
| Germany | 47,402 | 89,938 | 90 |
| Source: US Commerce Department | |||
European HRC market largely inactive in continuing seasonal slowdown; mills to aim for higher prices later in month
Both buyers and sellers continued holding back from trading on Thursday due to the continuing holiday break.
Most buyer sources estimated the HRC price at €680-700 per tonne ex-works, while others said that spot prices could climb “just slightly above” €700 per tonne ex-works if supplies remain tight.
In northern Europe, offers from integrated mills for February and March delivery were reported at €720-750 per tonne ex-works before the holiday break.
One producer source told Fastmarkets that it was offering March delivery coil at €730 per tonne exw, stressing that this was “the minimum possible level due to high production costs.”
A distributor source said everyone was still on holiday.
“Trading is zero this week. Mills are keeping their offers high, citing strong order portfolio, but we [will soon] see if these offers are accepted in deals,” the source said.
Fastmarkets calculated its daily steel HRC index domestic, exw Northern Europe at €695.00 ($759.89) per tonne on Thursday, edging down by just €0.42 per tonne from €695.42 per tonne on January 3.
The index was down by €0.50 per tonne week on week, but up by €18.33 per tonne month on month.
In Southern Europe, Fastmarkets calculated its daily steel HRC index domestic, exw Italy at €689.58 per tonne on Thursday, stable day on day.
The index was up by €1.25 per tonne week on week and by €19.58 per tonne month on month.
The Italian market was also still in “holiday mode,” sources said, with trading activity not expected to resume until the second week of January.
Target offers from Italian steelmakers for February-March-delivery HRC stood at €720-730 per tonne delivered, while one European steelmaker was offering coil to the nation at €740 per tonne delivered.
Buyer sources estimated the market at €680-690 per tonne ex-works.
Published by: Julia Bolotova
Tosyali buys Spanish tubemaker STS
Turkish conglomerate Tosyali Holding says it has acquired Spain’s Baika Steel Tubular System (STS). The company manufactures helical welded steel (SAW) tube with different coatings and structural pipes, used mainly in the oil & gas sector, water transportation and for civil engineering applications.
“We have added a new milestone to our global growth,” Tosyali says in a note seen by Kallanish. “With this acquisition, the company has increased its global pipe production capacity to more than 3 million tonnes/year, reinforcing our position as the largest steel pipe producer in Europe.”
Although it does not reveal any details of the agreement, STS confirms that Tosyali will modernise its two plants in Alegría-Dulantzi, in the Basque Country. This will increase their annual production capacity from the current 150,000 tonnes/year to almost 240,000 t/y.
Todor Kirkov Bulgaria
French buyers intend to rebuff longs increases
Some French buyers say they will try to refuse the recent wave of steel price increases implemented by European producers before the end of last year, despite contract values for rebar rising in recent weeks.
The industry is still on holiday, with activity, like in most European countries, expected to resume on 8 January. Despite the hikes on all long products, demand remained uncertain in France until the end of the year. A purchasing group says its members intend to keep stocks low given the current economic climate and downturn in the French construction sector, which saw output decline greatly in 2023.
Distributors’ purchasing volumes were weak through year-end. Last month did not bring any significant restocking. However, some restocking is seen happening in January. Purchasing groups are resorting to buying abroad for more competitive deals.
“These increases will not last. Stocks are low and we are going to buy as little as possible. Prices for all longs will inevitably go backwards. There was ‘technical’ demand at the end of the year because stocks were low throughout the country, but if the construction sector does not resume ordering volumes, the high prices will not stick,” a source comments.
French rebar values are flat on month at €650/tonne ($561) delivered on average, Kallanish learns from market sources.
The construction industry in the country is showing no signs of recovery. The sector’s crisis is deepening, particularly in the private residential segment, and is now expanding to non-residential construction. In the third quarter, the fall in new building sites exceeded 20%, while permits for new construction collapsed by almost 30%. The outlook remains negative (see Kallanish passim).
Natalia Capra France
Italian rebar buyer uncertainty to impact January sales
Italian rebar buyers expect the current period of quiet to last until mid-January. Many of them are adopting a wait-and-see attitude and tell Kallanish they can hold out without purchasing for another couple of weeks.
The Italian rebar market remains inactive this week as activity will restart following winter holidays on 8 January. Contract values increased in December in line with higher asking prices.
Before shutting down for the Christmas break, local steelmakers were asking for between €380-400/tonne ($416-438) base ex-works. Relatively small rebar volumes were sold at €360-380/t base ex-works. Including extras, domestic rebar was fetching €620-640/t base ex-works.
Confidence in present and future activity increased in December in the Italian construction sector, according to a report by national statistics institute Istat.
General consumer confidence regarding the current and future economic landscape also increased last month. An improved sentiment has been registered in all sectors of the industry, except for manufacturing where the association points to a continued negative outlook and expectations of deteriorating production levels in 2024.
Istat says November prices in the construction sector remained flat for both residential and non-residential buildings.
Natalia Capra France
