French longs buyers anticipate price reduction
Long steel prices in France are declining only slightly as producers have refused to give in to buyers’ demands for price reductions. However, coil derivatives, including welded tube and sheet, have experienced a significant price decline in the country so far.
Longs values remained relatively stable throughout the summer. A buyer has expressed concern that “panic is now spreading” as a result of numerous market participants claiming that September has not seen an appropriate resumption of activity following the summer break, Kallanish notes.
Distributors, who are witnessing a significant decline in flats prices, fear that longs values will also begin to decline in the coming weeks. In anticipation of a prolonged drop, distributors and construction companies are adopting a wait-and-see approach and refraining from making volume purchases.
In comparison to the end of July, prior to the start of the summer break, the average transaction value for domestic rebar has decreased by an estimated €10-15/tonne ($11.1-16.7), and hovers at approximately at €600-610/t delivered. A major buyer talks about the construction sector’s persistent poor performance and the nearly complete cessation of single-family home construction in France. Demand is currently reliant on infrastructure projects.
Meanwhile, merchant bar prices have also slightly decreased compared to August, currently standing at approximately €260/t delivered, sources suggest. Amid low-priced Chinese long product offers into Europe, buyers are reportedly considering offers from Asia for beams scheduled to arrive in November at a price of some €100/t less than domestic material. Nevertheless, the gap between imported and domestic prices should be significantly greater in order to attract buyers.
Domestic transactions for the first category of beams in France are also experiencing a modest decline, pegged in a range of €760-770/t delivered, dependent upon the client and volume. Prices of sections are expected to decrease in the coming weeks due to slow domestic consumption and lower import prices. Scrap is also anticipated to suffer another decline in October.
Natalia Capra France
siderweb FORUM: prices at their lowest, cautious optimism for 2025
Steel prices are expected to have bottomed out and a turning point now seems close. Participants at the round table ‘Steel in Italy and the World’ held during the siderweb FORUM appeared to agree on this.
‘The steel market is cyclical by nature,’ said Yuryi Rizhenkov, CEO of the Ukrainian Metinvest Group. The current bearish trend in the sector is the longest in the last 20 years. This alone leads me to be cautiously optimistic for 2025. Of course there are many uncertainty factors, such as the war that unfortunately continues in Ukraine and the crisis in the Middle East. However, we also see that governments, such as the one in China just now, are taking steps to stimulate the economy,’ he says.
“We only hope that the effects of the latest stimulus packages from China will have a lasting effect,” remarked Fernando Espada, president of EUROMETAL, noting how, on the European side, we are instead looking closely at the ECB’s upcoming moves.
‘I believe that prices are near the bottom, because flat steel producers around the world are suffering right now,’ said Antonio Marcegaglia, president and CEO of Marcegaglia Steel. ‘Moreover, I do not see any possibility of significant reductions in raw material and labour costs given the inflation levels. We need higher prices both to cover these costs and to address investments in decarbonisation’.
Despite a weak economy and geopolitical tensions, Alessandro Brussi, chairman and CFO of Danieli, described demand for steel plants worldwide as good. “Demand for steel,” he said, “is still growing in some areas and part of this growth is due to the availability of raw materials and factors such as gas, as in North Africa. In some areas, such as Europe, demand is driven by decarbonisation and the efficient use of resources such as scrap, energy and electrodes; in others, such as India, it is driven by the need to increase tonnes produced. ”
We have an interesting pipeline of orders,’ concluded Bruschi. “The main obstacle is the need for capital, for funding, for contributions from different governments to drive technological change within the sector.”
Asked what are the main challenges facing the steel market, Marcegaglia replied that ‘structurally high costs are undermining the competitiveness of European players’ and that in order not to succumb it is necessary ‘to focus on innovation in materials, processes, performance; to remain very lean in terms of organisation, flexible in adapting production levels to fluctuations in demand, and to move more towards services and value creation’.
At the same time, both Marcegaglia and Espada stated that although protection from unfair and aggressive imports is desirable, raising walls too high risks becoming ‘a boomerang’. According to Espada, the latest EU trade measures ‘are only protecting one part of the supply chain. On the one hand it is difficult to import certain products, but on the other hand we allow the import of products with higher added value. I think the Commission should focus on initiatives to increase steel consumption. Doing so would defend the entire supply chain’.
The CBAM, the Border Carbon Adjustment Mechanism, is according to Marcegaglia ‘a good objective, but with wrong and badly applied instruments, it risks being not only ineffective but even dangerous’. The chairman and CEO of Marcegaglia Steel added that so far, in its transitional phase, the CBAM has been more “a burden from an administrative point of view”, but has not brought about much change; however, all steel players are preparing to move towards more sustainable resources and making investments to supply green steel. Marcegaglia said he hoped that the CBAM would undergo changes, but was not very optimistic about it.
Despite the EU safeguard, duties and ongoing anti-dumping investigations,Italy remains the largest importer of flat steel in Europe. This was one of the main reasons for Metinvest to evaluate Italy for its investment project in partnership with Danieli. A project that was initially intended to be for the rolling of semi-finished products from Ukraine but which, with the loss of Azovstal due to the war, became that of a full-fledged steel mill. ‘Building a domestic production of this type of product would make the Italian economy more resilient and stable,’ he said. Moreover, the project ‘aims to revitalise the area’. ‘I believe we will finalise the Programme Agreement within the next two months,’ he remarked. The Metinvest-Danieli steel plant in Piombino will use raw materials largely from Ukraine, as well as both European and imported scrap. In this regard, Ryzhenkov emphasised that ‘at European level, there will be a big increase in the availability of scrap in the coming years. In fact, the export of this raw material is expected to grow in the next five years. So there should not be a supply problem’.
On the subject of investments, Marcegaglia said that his group’s investments are mainly driven by cost efficiency and innovation and the need for value chain integration in production. These were the drivers behind the acquisitions of Outokumpu’s stainless steel long products division and Ascometal’s Fos-sur-Mer site.
Stefano Gennari
Nippon reapplies for US assessment of USS acquisition
Nippon Steel has reapplied to the US government for another review of its US Steel (USS) acquisition plan, Kallanish learns.
The move may push back the review deadline at the Committee on Foreign Investment in the United States (CFIUS) by 90 days, into December. Therefore, the decision would arrive after the 5 November presidential election.
Multiple US lawmakers, including President Joe Biden, former president Donald Trump and Democratic presidential nominee Kamala Harris, have voiced opposition to the deal (see Kallanish passim).
Last week, the Biden administration announced it would allow Nippon to refile with the CFIUS, in order to give the committee more time to scrutinise the specific details of the proposed deal (see Kallanish passim).
CFIUS issued a statement listing concerns for US national interests should the deal be allowed to transpire, prompting stronger reactions from Nippon, including in-person meetings and a written rebuttal to the CFIUS concerns (see Kallanish passim).
On 24 September, Nippon also announced that it is selling its entire portion of Posco Holdings, a South Korean steelmaker. The US has been very critical of Nippon’s role in contesting antidumping duties placed on foreign steel in the US.
Nippons’ move to break from its Posco involvement may bode well with the CFIUS given that the US has been actively pursuing action against multiple South Korean producers it finds guilty of selling steel in the US below market value (see Kallanish passim). Nippon says selling its shares of Posco allows it to “improve asset efficiency.”
Jake Sullivan, the US national security adviser, told reporters at an event on Saturday that Biden would allow the review process to run its course (see Kallanish passim).
Kristen DiLandro USA
European service centres bear energy transition burden: conference
The energy transition is not a challenge confined to mills but also an issue for steel service centre operation, says a representative of that sector.
Speaking at the MBI Infosource Stahltag event in Frankfurt on Wednesday, Sebastian Schulze of German distribution group Knauf Interfer gave an idea of new demands on service centres. “The old world of service centres was easy to oversee,” being confined to stockholding, cutting/slitting, and providing a mill’s product specification documentation, he said.
“We used to care about the grade of a product and its size measures. Now, we have to include its carbon footprint, and explain that to the customers. And, actually, we have to understand it ourselves,” Kallanish heard him say at the conference.
“The traditional product certificate from the mill is not sufficient any more, as customers increasingly ask for the content of CO2 emissions,” he noted. “Up to a year ago, we did not have that, and now the question for us is how we handle it in a systematic way.”
“The idea of service will change quite a bit, as we will have to explain a change in pricing to the customers,” Schulze continued. He cautioned that a new generation of products is coming, with surcharges that vary widely, based on a variety of methods used to calculate their carbon footprint.
Schulze said customers’ knowledge about footprints varies widely. It is relatively well-established among big customers, such as carmakers, that often have their own roadmap, but in other sectors it can be next to zero. This is a result of political guidelines for each sector, dictating whether customers have needed to worry about it so far or not, he explained. For construction, for example, carbon emission requirements will soon become more apparent, he noted.
He perceives awareness has increased relatively steeply from last year to now, and assesses the share of customers with an awareness of footprint at around 25%.
Christian Koehl Germany
Network Steel mulls thyssenkrupp Galmed plant acquisition
ThyssenKrupp is in talks to sell its Galmed (FBA9) plant in Sagunto, Valencia, to Spanish coil processing company Network Steel (NS), Kallanish notes. The facility can produce 450,000 tonnes/year of hot-dip galvanized coil. The material is mainly supplied to the automotive sector.
Spanish government and trade union representatives have confirmed the negotiations.
Thyssenkrupp could not be reached for comment, while NS indicated in a brief note that it is considering multiple market possibilities for growing its business but did not comment on Galmed.
The mayor of Sagunto, Darío Moreno, says the negotiations are an initiative led by Spain’s secretary of state for industry, Rebeca Torró, and the Sagunto administration is supporting the process. “We must respect the deadlines of the companies in the negotiations while institutions try to provide as much certainty as possible,” Moreno comments.
The Valencian councillor for industry, Nuria Montes, confirmed on Tuesday that the continuity of the FBA9 plant is a priority. Local government has made itself available to the current management and the possible future buyer to facilitate the transaction and prolong business activity, he added.
“We have been informed of all operations and movements, and we have held meetings precisely to ensure that the sale of this factory can be done successfully,” Montes said in a statement.
According to sources, thyssenkrupp and NS are expected to reach an agreement over the FBA9 plant before the end of the year.
The German steelmaker closed the facility in November 2023 due to the significant worsening of the European automobile market and the consequent reduction in demand for galvanized steel products in Spain and southern Europe. Thyssenkrupp carried out a detailed analysis of the profitability of its ten lines and the result showed the closure of FBA9 was inevitable from an economic standpoint.
The consultation process is yet to begin for the application of the Employment Regulation File (ERE) in relation to the plant’s closure. Negotiations with unions were scheduled for 20 September.
The Spanish unit halted production and laid off 165 workers in 2013 due to low market demand. The plant reopened three years later after massive protests and political pressure.
Todor Kirkov Bulgaria
EU charges Spanish companies with steel duty evasion
Two Spanish companies and their managers have been charged with allegedly evading anti-dumping duties when importing steel sheet from China into the EU between 2017 and 2018.
The European Public Prosecutor’s Office (EPPO) in Madrid is seeking a prison sentence of more than eight years and fines of over €25 million in an indictment filed on 17 September, Kallanish notes. The names of the charged firms and five executives have not been disclosed.
“The imported steel sheets, being finished products, are subject to the payment of the extra customs duties introduced by the EU’s 2019 new anti-dumping regulation,” EPPO explains. “However, the defendants declared the imported material as slabs, which are intermediate or semi-finished iron or steel products with a lower level of processing and rolling than sheets. By doing so, they misled the customs authorities and evaded the payment of the corresponding duties.”
According to the Prosecutor’s Office, the damage caused to the EU as a result of the tax evasion is €9.93 million ($11.1m). To ensure the defendants can meet their financial liabilities, over 30 properties linked to them were seized as a precautionary measure.
The EPPO is the independent public prosecution office of the EU.
Todor Kirkov Bulgaria
European steel HRC prices keep slipping on poor market fundamentals
“[HRC] prices are deteriorating day by day because of low demand and high free capacity around the globe,” a buyer in Northern Europe said. “The automotive industry in Europe is in collapse, with very poor prospects for the near future.”
As a result, trading remained very poor across the European HRC market.
European producer sources claimed that they were already “in the red” – meaning that they were selling HRC at prices close to or even below the costs of production.
Transaction prices for HRC in Northern Europe were mainly reported at €540-550 ($602-613) per tonne ex-works, market sources said.
Official offers were rare, because suppliers preferred to work “case by case.”
One mill source reported offers at €570-580 per tonne ex-works, but buyer sources found that price no longer workable.
“[A price of] €540-550 [per tonne ex-works] is what we might accept now, unfortunately,” a supplier source in the region said.
“Steel mills have to learn the hard way: there is no chance to improve [HRC] prices because there is just no demand,” a German buyer said.
As a result, Fastmarkets’ steel hot-rolled coil index, domestic, exw Northern Europe, was €549.88 ($612.60) per tonne on September 25, down by €2.83 per tonne from €552.71 per tonne the previous day.
The index was down by €10.12 per tonne week on week and by €51.95 per tonne month on month.
Some market sources suggested that HRC prices might hit rock-bottom in October-November, and that, after closing their order books for 2024, European mills might try to increase prices for the first quarter of 2025.
No official announcements of such decisions have been made, however.
There were no signs of recovery in end-user demand, so market sources suggested that achieving any price increase would be difficult.
“The market is really very down, and there are no signs of improvement,” a buyer in the Benelux area said. “The Chinese National Bank has announced a number of actions to support that country’s economy and bring it back to a desired growth rate of 5%. Maybe it will help the global steel situation [if that is achieved] but it will take time.”
In Southern Europe, meanwhile, Fastmarkets’ daily steel hot-rolled coil index, domestic, exw Italy, was €544.38 per tonne on Wednesday, down by €8.12 per tonne from €552.50 per tonne on Tuesday.
The Italian index was also down by €15.62 per tonne week on week and by €55.62 per tonne month on month.
On Wednesday, sources reported offers of HRC from a domestic mill at €560 per tonne delivered, with lead times of late October to early November. This would be equivalent to €550 per tonne ex-works.
Estimates of tradeable values from buyer sources were heard at €530-550 per tonne ex-works.
Market sources said that, for large tonnages of 1,000 tonnes or more, estimates were reported at €530 per tonne delivered (€520 per tonne ex-works).
But trading in Italy was muted and bookings were rare, and mainly for small tonnages, because buyers were holding back and expecting prices to fall further.
“Lack of demand and the disturbing situation in the automotive industry are key concerns,” a buyer in Italy said.
In the secondary market, 3-6mm hot-rolled sheet was offered and traded at €650-660 per tonne CPT.
Meanwhile, import HRC offers from Asia were heard at €525-535 per tonne CFR to Italy, for shipment in end-October or November.
Bids for such material were reported at €480-510 per tonne CFR, but no offers at that level were reported to be available in the market.
Trade safeguard measures and a new European anti-dumping investigation into HRC from Vietnam, Taiwan, Japan and Egypt were limiting the interest in imports, especially considering the small gap to domestic prices.
On September 24, the European Commission announced that it will start to register all imports of products falling under anti-dumping or anti-subsidy investigations, including continuing investigations where provisional determinations have not yet been made.
“The registration will be carried out by Member-State customs authorities,” a note on the Commission’s website said, “as directed by the European Commission via individual Implementing Regulations.”
Published by: Julia Bolotova
EU introduces registration of all imports under investigation
The European Commission has decided to register all imports of products under anti-dumping or anti-subsidy investigations, including ongoing investigations. This will enable the retroactive collection of anti-dumping and countervailing duties if the legal conditions are met.
Reports suggest that the Commission may implement retroactive duties in its anti-dumping case, launched last month, against hot rolled coil imports from Egypt, India, Japan and Vietnam, Kallanish notes.
Retroactive collection is not automatic. That decision is taken only at the definitive stage of each investigation, the Commission points out.
The registration of imports is also designed to prevent sharp increases in imports of products under investigation ahead of the imposition of measures. It will simplify procedures and alleviate the burden placed on industry, while also providing the Commission with precise and accurate information about the source and quantities of imports of a product under investigation, as well as broader market developments, the Commission observes.
Until now, imports were usually registered only upon a justified request from EU industry. The latest decision is aimed at stepping up the use of trade defence instruments.
The registration will be carried out by Member-State customs authorities as directed by the European Commission via individual Implementing Regulations.
In an unprecedented move, the EU initiated the HRC AD case despite all four origins already being subject to EU safeguard quotas, with Egypt, Japan and Vietnam effectively having their quotas restricted only a month earlier. EU steel industry representatives are concerned about the survival of production in the bloc amid high import penetration and uncompetitive production costs.
Adam Smith Poland
Spanish auto industry’s performance falls in summer
The Spanish automotive sector saw performance drop month-on-month and year-on-year in July. It lost strength also during the August holidays. Exports followed a similar seasonal pattern, Kallanish notes.
National automotive association Asociación Nacional de Fabricantes de Automóviles y Camiones (Anfac) released July and August figures jointly due to the summer seasonality.
Output in July was 183,635 units, compared to 218,950 vehicles in June. This was also 10% less than July 2023. In August, the country produced just 73,434 units, down 60% m-o-m and 20% less on-year. Eight-month cumulative production amounted to 1.58 million vehicles, a fall of 1.5% over the same period last year.
“This is a complex time for the automotive sector, with the European market in a downward trend, a decline that directly affects production volumes. To be more efficient, factories are producing on demand and without stocks,” says Anfac general director José López-Tafall.
July exports totalled 171,811 units, compared to 186,813 in the previous month and 5.4% less y-o-y. August shipments declined sequentially by 52.2% to just 77,038 vehicles. This volume was also down 17.7% on-year. Spanish eight-month exports decreased by 2.2% over January-August 2023 to 1.42 million units.
European markets represented almost 93% of Spanish deliveries in both July and August, Anfac data show.
Todor Kirkov Bulgaria
German prices to drop further in autumn: analyst
Prices for flat products in northern Europe could go down by another 5-8% until the end of October, according to MBI Infosource analyst Peter Fertig.
Speaking at MBI’s annual Stahltag event in Frankfurt, Fertig said he expects the negotiation position of mills will continue to weaken over the following six weeks. The price of cold rolled coil in Germany is now at its lowest since December 2022, assessed at €660/tonne ex-works ($736), he added at the event attended by Kallanish.
One year ago at the same event, Fertig made a forecast for hot rolled coil prices in 2024 within a range of €750/t best case and €475/t worst case, or an average of €575/t. As it turned out, €750 was the peak seen on the market in February, while €575 roughly matches today’s market price in Germany.
In his presentation, he underlined that several unexpected factors like the wars in Ukraine and the Middle East have disrupted the “quantitative forecast model”. He noted: “If a sideline scenario becomes the dominating factor, this is a disaster for steel.”
Talking about the influence of China on the global market, he stated that the Chinese government is trying to incentivise residential construction, “but not in the traditional sense with new-building, but by regulating overproduction in the sector.” He acknowledged the government’s ambitions to reduce emissions and to keep steel production from rising.
He said prices of long products imports like rebar and wire rod from China have risen slightly, by 1%, and that a slight devaluation of the euro helped to reduce Europe’s attractiveness as a market.
Looking at incentives for construction in Europe, Fertig pointed out the European Central Bank is too hesitant with reducing the interest rate, meaning demand from construction will stay sluggish. “Looking at a horizon of three months going forward, prices of long products will be 5% below the current level,” he concluded.
Christian Koehl Germany