Category: Latest Updates

German mills in July produced around 3.1 million tonnes of steel, 6.3% more than in July 2023, Kallanish learns from national steel federation WV Stahl.

July thus continued the slight upward trend seen in the first half of the year, with year-on-year tonnage increases in most months, the federation notes. In the period from January through July, production totalled 22.5m tonnes, up 4.7% y-o-y. However, the federation warns of early optimism, in view of an altogether subdued long-term level.

“The surge of the preceding months from a low level gives no reason for a relief,” says WV Stahl managing director Martin Theuringer. “On the contrary, 2024 will be a lost year for the recovery of volume production. The worries about an economic recession have grown, and demand is still declining. This, plus further increasing pressure from imports are postponing hopes for a recovery of business completely into 2025.”

Due to a relief from the peak of power prices seen in 2023, the electric arc furnace route saw a stronger relative y-o-y surge in the first seven months of 13.8%, to 6.7mt.

Christian Koehl Germany

kallanish.com

The German rebar market is the subject of mixed commentary over whether mill pricing is higher, lower or about the same versus prior weeks, Kallanish hears. 

A southern German distributor has recently paid slightly more for an order than last time, dating back to late May, according to a manager of the company. The slight premium was within €10-20/tonne ($11-22), he details. Another observer based on the Ruhr concurs, as he heard of offers up to €650/t delivered ($726), which without the fixed size extra of €265 would mean a base price of €385/t.

A Lower Saxony manager dismisses such new peaks. In fact, he says that his latest deal for wire mesh was €5/t below the previous one at the beginning of summer. Overall, prices have hardly budged over the summer, he finds, hovering at €620/t delivered, or somewhat above.

That source reports that the distribution arm of the mill in question is nearly fully booked and close to rejecting new orders. A price discount under this scenario would be somewhat of a paradox, the manager concedes. “These are crazy times,” he states.

Such examples suggest that there is no reason to see a wide price movement across mills, be it up or down. Deviations from the average price this summer are influenced by the buyer’s circumstance and where it came from. The southern distributor may have had lower-priced alternatives from Italy in May/June and so could bargain for relatively good deals from German mills. This is not the case anymore, as “offers from Italy appear somewhat higher than from German mills,” he says.

Another distributor in a letter to customers flatly states that “it is unlikely that August will bring a change in prices.”

Christian Koehl Germany

kallanish.com

Domestic prices for European hot-rolled coil were assessed flat on Aug. 23 as the market ended on a quiet note, with no sign of recovery for the next few weeks, market sources said.

“There is not that much movement in the market,” one distributor source said.

“Domestic markets are so weak,” a second distributor source said.

Market participants noted that although overall market sentiment remains flat if not slightly negative, there are some market participants, particularly mills, who believe that there may be some price recovery in the market, pushing levels up.

“[Some mills] thinks prices in October will go up by 50 euros or more,” a service center source said.

Market sources reiterated that for any chance of price recovery, mills must persist in reducing production and lowering capacities. This approach will create space for potential inquiries later in the year that could drive prices up.

“I really think production cuts are necessary,” the service center source said. “Even if there are fewer imports, the demand is still weak.”

Platts assessed Northwest European HRC stable on the day at Eur595/mt ex-works Ruhr Aug. 23.

Tradable values were reported at Eur590-610/mt ex-works Ruhr and offers were reported at Eur600-620/mt ex-works Ruhr.

Meanwhile, Platts assessed domestic HRC prices in Southern Europe at Eur595/mt ex-works Italy Aug. 23, stable on the day.

Demand remained low, with most market participants expecting that trading would pick up in September.

Mills in Northern Europe were heard offering HRC at €620 ($690) per tonne ex-works, Fastmarkets understands. However, producers were inclined to decrease the price of firm bids.

Some deals were heard at €580-590 per tonne ex-works.

Industry sources estimated the tradeable market level at €590-620 per tonne ex-works.

Fastmarkets calculated its daily steel hot-rolled coil index, domestic, exw Northern Europe at €601.83 per tonne on Friday, down insignificantly by €0.67 per tonne from €602.50 the previous day.

The index was down by €8.67 per tonne week on week and by €26.42 per tonne month on month.

“The prices have plateaued. Hopefully, the market activity will peak in the next few weeks, and some price rebound could be observed,” an industry source told Fastmarkets.

However, according to a distributor source, production cuts should be made to balance the market.

“Even if there are less imports, demand [in Europe] remains weak,” the source said.

Despite that, there were rumors that mills are planning to increase HRC prices for October by €30-50 per tonne.

In Southern Europe, Fastmarkets calculated its corresponding daily steel hot-rolled coil index, domestic, exw Italy at €600.00 per tonne on Friday, unchanged from the previous day.

The index was down by €7.50 per tonne week on week and by €21.25 per tonne month on month.

Most market participants in Italy were still taking summer holidays, with trading in the region close to zero.

The sole Italian integrated mill producing HRC is expected to return to the market next week and offer fresh price levels.

The most recent offers were heard at the end of July at €640-650 per tonne delivered, which would net back to €630-640 per tonne ex-works.

Buyer sources estimated the workable price at €590-610 per tonne ex-works.

In terms of imports, Turkish HRC was heard offered to Italy at €570-580 per tonne CFR, including the anti-dumping duty.

Published by: Darina Kahramanova

fastmarkets.com

Canada intends to apply a 25% surtax on imports of steel and aluminum from China and a 100% surtax on all Chinese-made electric vehicles in October in an effort to protect its domestic industries from alleged unfair trade practices, the government said Aug. 26.

The surtax on EVs is to take effect Oct. 1, while the 25% surtax on Chinese steel and aluminum will be effective Oct. 15, the government’s Department of Finance said in a statement.

“Canadian workers and critical sectors, including steel and aluminum…are facing an intentional, state-directed policy of overcapacity, undermining Canada’s ability to compete in domestic and global markets,” Deputy Prime Minister and Minister of Finance Chrystia Freeland said. “This is why our government is moving forward with decisive action to level the playing field, protect Canadian workers, and match measures taken by key trading partners.”

Steel and aluminum

The government released an initial list of steel and aluminum products for public comment Aug. 26. A final list of goods subject to the surtaxes will be announced by Oct. 1, it said.

The surtaxes will not apply to Chinese goods that are in transit to Canada on the day on which these surtaxes come into force, the government said.

EVs

The 100% surtax on EVs includes electric and certain hybrid passenger automobiles, trucks, buses, and delivery vans and will apply in addition to the “Most-Favoured Nation import tariff” of 6.1% that currently applies to EVs produced in China and imported into Canada, the government said.

Additionally, Canada’s government is launching a second 30-day consultation concerning other sectors “critical to Canada’s future prosperity,” including batteries and battery parts, semiconductors, solar products, and critical minerals.

It also intends to limit eligibility for the Incentives for Zero-Emission Vehicles (iZEV), the Incentives for Medium and Heavy Duty Zero Emission Vehicles (iMHZEV), and the Zero Emission Vehicle Infrastructure Program (ZEVIP) to products made in countries which have negotiated free trade agreements with Canada.

Canada’s government said it intends to review these measures within a period of one year from their entry into force and the actions may be extended for a further period of time and supplemented by additional measures, as appropriate.

Author: Justine Coyne

spglobal.com

Domestic UK hot-rolled coil prices were stable in the week to Aug. 22, amid weak demand and excessive supply.

“It is the worst time since 2018,” a trader source said. “Other buyers expect prices to decrease.”

Trade sources said the price gap between Asian imports and European imports is widening, making Asian material appealing for customers, despite the longer lead times and freight involved.

“The gap between EU material and Asian material is opening up.” trader source said. “We can still buy from the far East.”

However, low end-user demand and limited restocking in the domestic market is forcing market participants to buy closer.

“If I were a service center, I would buy more locally,” a trader source said.

Trade sources expect current market dynamics to continue until the first quarter of 2025, with buyers restocking as per requirements and avoiding the buildup of inventory. With demand stagnating at low levels, prices could see further downward movement, trade sources said.

“We are still seeing some spot inquiries,” a trader source said. “I still think there is a period of activity there.”

Platts assessed UK HRC at GBP570/mt basis DDP West Midlands, stable on the week.

Devbrat Saha

Global crude steel production totaled 152.8 million metric tons in July, down 4.7% year on year and 4.9% lower on the month, according to World Steel Association data published Aug. 22.

This brought total production for January-July to 1.1 billion metric tons, down 0.7% year on year, the data showed.

The largest producer China produced 82.9 MMt in July, down 9% year on year and 9.5% lower than June and making up 54.3% of the total volume. This brought the seven-month volume to 613.7 MMt, down 2.2% on the year.

The second largest steel producer, India, produced 12.3 MMt in July, up 6.8% year on year and 2.7% higher month on month, with January-July volume rising 7.2% on the year to 86.4 MMt.

Japan produced 7.1 MMt in July, down 3.8% year on year and 1.1% higher than June, with the seven-month total at 49.8 MMt, falling 2.8% year on year.

The US produced 6.9 MMt of crude steel in July, up 2.1% on the year and 4.7% higher on the month, while Russia was estimated to have produced 6.3 MMt, down 3.1% on the year, but climbing 3.35% from June.

In January-July, the US produced 46.9 MMt and Russia 43.1 MMt, down 1.8% and 3% year on year respectively.

South Korea produced 5.5 MMt in July, down 3.4% on the year, but up 7% on the month, taking the year-to-date total to 37.1 MMt, down 5.9% on the year.

Turkey produced 3.1 MMt, up 4% on the year, but edging 0.5% down month on month, with the seven-month volume up 14.9% at 21.7 MMt.

In July, Brazil produced 3.1 MMt, climbing 11.6% year on year and up 7.6% on the month, while Iran produced 1.8 MMt, falling 18.7% on the year and 32.3% lower than June.

Europe steel output up 5.7% on year

The European Union produced 10.8 MMt in July, up 5.7% on the year, but down 2.5% from June, with the January-July total up 1.5% on the year at 78 MMt.

The region’s largest steelmaker, Germany, saw July production at 3.1 MMt, which worldsteel said was up 4.8% year on year, but down 2.7% month on month, bringing the seven-month volume to 22.5 MMt, up 4.5% on the year.

This was corroborated by data from the German Steel Federation, which also reported crude steel output at 3.1 MMt in July, although it said this was up 6.3% year on year.

Of the total, 2.3 MMt was from blast furnaces, up 4% on the year, and 789,000 metric tons from electric arc furnaces, according to WV Stahl.

Its January-July volume was the same as worldsteel’s, with 15.8 MMt produced via BFs and 6.7 MMt via EAFs.

Germany’s production of hot rolled coils rose 2.5% on the year in July to 2.6 MMt, with the seven-month volume up 2.9% to 19.3 MMt, WV Stahl said.

“The slight upward movement in production in recent months, which is taking place from a low level, is anything but a reason to sound the all-clear. Rather, 2024 will also be a lost year for steel volumes,” German Steel Industry Association Managing Director and Chief Economist Martin Theuringer said in an Aug. 22 statement accompanying the German data.

“This is because concerns about a recession have increased across the economy. Many important steel processing industries and thus also steel demand are still in reverse gear,” he said, adding that import pressure continues to rise across Europe and any hopes for an economic recovery had been postponed to 2025.

Platts, part of S&P Global Commodity Insights, assessed domestic HRC prices in Northern Europe at Eur595/mt ex-works Ruhr Aug. 21, down 13.8% since the start of 2024.

Crude steel data covers the 71 countries that report to worldsteel, accounting for about 85% of the world’s crude steel production.

Meanwhile, global production of pig iron from 37 countries was 106.6 MMt in July, down 5.5% year on year, with the January-July total down 2.5% on the year to 752.3 MMt, the data showed.

Direct reduced iron produced in 13 countries was 10.6 MMt in July, up 2.4% year on year, with the seven-month total at 72.4 MMt, up 6.5% year on year, according to worldsteel.

Jacqueline Holman

spglobal.com