Category: Latest Updates

Buying activity in the spot HRC market in Europe remained subdued during the week to Friday, with only minimal tonnages purchased.

“The market is still cautious and quiet. Plus, Germany is off on May 30-31 so nothing has been going on in terms of trading,” one German buyer told Fastmarkets.

Offers of July-delivery HRC from integrated steelmakers in Germany were heard around €630-650 ($682-703) per tonne ex-works on Friday, with transactions mainly heard at the lower end of the range.

Sources pointed out that some €10-15-per-tonne discounts were possible in cases of firm bids.

An integrated mill in the Benelux area was targeting €640-650 per tonne ex-works.

Buyers estimated tradeable values at €620-640 per tonne ex-works.

Fastmarkets calculated its daily steel HRC index, domestic, exw Northern Europe at €633.96 per tonne on Friday, up by €0.21 per tonne day on day from €633.75 per tonne.

The index was down by €3.41 per tonne week on week, but up by €1.96 per tonne month on month.

Market sentiment improved following Thursday’s development around steel safeguard measures.

On May 30, the European Commission notified the World Trade Organization that safeguard measures would be extended for two more years, Fastmarkets reported. The Commission also suggested a 15% cap per single country over the residual HRC quota volume, which flustered the EU steel market.

Notably, sources expect the new adjustment to significantly limit HRC imports from Asian suppliers, who are offering the most competitive prices, and reshuffle import trade flows into Europe.

“Adjusted safeguards close the opportunity to negotiate new [HRC] deliveries from Taiwan, Vietnam and Japan for the next few months,” one Italian distributor told Fastmarkets.

“Not to mention that we have around 500,000-600,000 tonnes of HRC of these origins in the pipeline – already ordered, in transition or in production phase. That means when those volumes arrive, we will either have to pay a safeguard duty, or custom clear only part of the tonnages, creating massive stockpiling in port,” the distributor said.

“The [European steel] market is now only digesting the news, but it is clear the import structure will change. Turkish mills have already taken their position to export to the EU,” a buyer in the Benelux region said.

In May, Turkish HRC suppliers became more active in the European market, with sales reported at €600-610 per tonne CFR including the anti-dumping duty. Offers were heard at €610-620 per tonne CFR including the duty.

“Turkish mills have quick shipment versus Asians and no problem with quotas,” a second Italian distributor said.

“In fact, Turkish HRC quotas are chronically underutilized, but that is likely to change as soon as adjusted safeguards come into force,” he added.

The quarterly allocation for Turkish HRC under EU safeguards was 464,083 for the second quarter of 2024, according to EU customs data.

The total available allocation is 1.28 million tonnes, including the transferred amount of unused volumes from previous periods.

In general, sources suggested that reduced availability of cheap imports could potentially support a rebound in domestic HRC prices the medium term.

Meanwhile, in Southern Europe, Fastmarkets’ daily steel HRC index, domestic, exw Italy was calculated at €630.00 per tonne on Friday, unchanged since May 24.

The index was down by €3.33 per tonne week on week, but up by €2.75 per tonne month on month.

There were no major price changes heard in the Italian HRC market on Friday.

July-delivery HRC was offered by one local and one European supplier to the nation at €650 per tonne delivered, which nets back to about €630-635 per tonne ex-works.

Buyer estimates of tradeable values were heard at €620-630 per tonne ex-works, but the lower end was not considered workable by an Italian supplier.

“In Italy, domestic [HRC] supply is pretty much limited to one mill; with cheaper imports from Asia becoming unavailable due to the new safeguards, I see no reason for European mills to step back,” a buyer in Italy said.

The EU proposes that, under the residual tariff rate quota (TRQ), no one country may import more than 15% of the total volume available in each quarter.

According to one market participant, this move would lead to Southeast Asian suppliers of hot-rolled coil, such as Taiwan, Japan and Vietnam, sending increased volumes of their HRC exports to India.

“The simple effect of this move by the EU is that higher volumes of Vietnamese and Japanese HRC will hit Indian markets,” he said.

On May 30, the EU notified the World Trade Organization (WTO) that steel import safeguarding measures will be extended for two more years, until 2026, and that it suggested imposing a limit of 15% on the maximum volume that a single country can export under the residual TRQ.

In 2023, HRC imports into Europe from Taiwan totalled 1.25 million tonnes, with 1.16 million tonnes from Vietnam and 1.09 million tonnes from Japan. But the 15% cap under the residual TRQ, if implemented, would restrict HRC supply to Europe from each of these countries to 555,555 tonnes per year.

India is attractive to all HRC exporting countries, particularly in Southeast Asia, because it allows duty-free imports of steel from that region under a free trade agreement.

“The freight costs from these three countries [Taiwan, Vietnam and Japan] to India are far lower than freight to Europe,” an official from an Indian mill said, “and the consumption of steel in India is on the rise. The next-best market [after Europe] for these countries to sell their HRC will be in India.”

The official said that the quota limit for Indian HRC exports to Europe, which is around 170,000 tonnes per quarter, would not show any significant change even if the safeguard measures were extended by the EU for two more years.

Indian mills were currently exporting very little tonnage of HRC to Europe, he added, because a number of mills have made production cuts for repairs and maintenance work on hot strip mills and steelmaking facilities.

“Indian exports of HRC to Europe will be [further] restricted with the implementation of the Carbon Border Adjustment Mechanism [CBAM],” a second market participant said, “while we may have to take more HRC imports from Southeast Asian countries.”

US Steel and Nippon Steel have received approvals from all of the necessary non-US regulatory authorities related to their proposed merger, Kallanish learns.

In a joint release issued by Nippon and US Steel, the leaders of each commend the global authorisations. David Burritt, chief executive officer of US Steel, states that meeting this milestone validates its lawfulness.

“We are pleased with the regulatory approvals received, as they are a clear indication that the transaction with Nippon Steel is pro-competitive and supports the strategic merits of foreign investment,” contends Burritt.

The Directorate-General for Competition of the European Commission, pursuant to the EU Merger Regulation and, separately, the Foreign Subsidies Regulation, each gave the green light to the proposed transaction. Mexico’s Federal Economic Competition Commission, the Serbian Competition Commission, the Ministry of Economy of Slovakia, and the Turkish Competition Authority agree that the proposal falls within the respective rules and regulations for each. In response to the voluntary submission of briefing papers, the United Kingdom Competition and Markets Authority confirmed that it had no further questions regarding the proposed transaction.

Takahiro Mori, Nippon Steel’s representative director and vice chairman, underscores the company’s good faith in meeting all regulatory requirements.

“US Steel and Nippon Steel are committed to, as in the months past, continuing to fully cooperate with the examination of the relevant authorities and are determined to complete the transaction,” Mori states.

A source in direct contact with Nippon Steel Corp USA tells Kallanish that a CEO has been selected to lead the company after the merger is completed.

“This deal is happening. Nippon does not send its leadership around the world, taking meetings and reorganising if it isn’t confident it’s a sure thing. They will honour the union obligations until it’s time to renegotiate, then they’ll be a lot more efficient. The ex-ceo of a prominent US steel company will be the new ceo after the merger,” the source says.

According to the latest statement, the two parties expect the deal to be completed midyear, subject to fulfilling closing conditions and receiving US regulatory approvals.

The deal has received pushback from the United Steelworkers union and various politicians from both sides of the political aisle, including US President Joe Biden, who has insisted US Steel must remain domestically owned (see Kallanish passim).

Kristen DiLandro USA

En el siguiente enlace pueden acceder a la edición de Mayo de nuestra revista  INFOACERO

Destacamos a continuación algunos de sus contenidos:

• Opinión –  D. Federico García Imhof- Junta Directiva UAHE 
• Evolución del Índice de Precios de Productos Siderúrgicos – UAHE
• Siderurgia:  Previsiones Eurofer – Informe Eurofer- 2º trimestre 2024
• Información Asociativa: Jornada Responsabilidad de Directivos // Próximo Ciclo de Conferencias UAHE- Junio
• Colaboración ASCEM–  Sr. Joan Carles Codina- Secretaría Jurídica
• Próximos Eventos: 32  Bienal Máquina Herramienta (3-7 Junio, Bilbao)// Asamblea General UAHE (4 Julio, Madrid)

Austria’s steelmakers decreased crude steel production in April compared with the previous month, according to worldsteel data.

Output amounted to 633,000 tonnes, down by 8.4% from March and 2.8% less year-on-year, Kallanish notes. Austria remains in 21st place in the ranking of top ten global steel producers, worldsteel data show.

In January-April, the country produced 2.53 million tonnes of steel, up 2% on-year.

Overall EU output in April decreased by 0.7% y-o-y to 11.3mt. In the first four months of the year, steel production was 0.6% less on-year versus January-April 2023 at almost 44.4mt.

In May, Austria’s largest steelmaker, voestalpine, together with Mercedes-Benz and TSR Recycling, will form a joint project to ensure the technical feasibility of processng post-consumer scrap (old scrap) into high-quality scrap that can be used to produce high-quality steel grades for the automotive industry (see Kallanish passim).

Earlier, voestalpine launched production of what it says is the world’s first high-quality “greentec” wire rod from hydrogen-reduced pure iron and scrap at its site in Donawitz. It has the goal of researching the use of hydrogen to reduce fine iron ore. In the future, the resulting hot sponge iron could be melted down in an electric arc furnace or used to produce hot-briquetted iron.

Earlier, the steelmaker placed an order with Primetals Technologies for an 850,000 tonnes/year capacity electric arc furnace to be implemented at its site in Linz. Startup is scheduled for 2027. An EAF of the same capacity, supplied by Danieli, is planned in the same timeframe for Donawitz.

In 2023, Austria’s commerce chamber, Wirtschaftskammer Österreich (WKO), expressed concern over the crash in demand and orders for commodities in the country (see Kallanish passim). WKO saw orders declining by as much as 30%, with no relief in sight.

Svetoslav Abrossimov Bulgaria

Consumption remained subdued across the Northern European rebar and wire rod market in the week to Wednesday May 29.
Fastmarkets’ weekly price assessment for steel reinforcing bar (rebar), domestic, delivered Northern Europe was €630-650 ($682-704) per tonne on Wednesday, stable week on week.

Few trades were reported given ongoing weak demand and pessimistic sentiment, market participants told Fastmarkets.

“There have been few trades as demand is slow,” a trader source said.

The corresponding Fastmarkets’ weekly price assessment for steel wire rod (mesh quality), domestic, delivered Northern Europe was €615-650 per tonne on Wednesday, widening down by €10-30 per tonne from €645-660 per tonne on May 22.

Offers in Germany for mesh quality wire rod were reported at €615-625 per tonne, while higher offers of €625-650 per tonne were reported throughout the rest of Northern Europe.

Meanwhile scrap prices remained largely stable week on week.

Fastmarkets’ calculation of its daily index for steel scrap HMS 1&2 (80:20 mix) North Europe origin, cfr Turkey was $375.16 per tonne on Wednesday, up just $1.60 per tonne from $373.56 per tonne a week earlier.

Published by: India-Inés Levy

High input costs and slightly improved demand resulted in rebar prices in Italy and Spain edging upward in the week to Wednesday May 29, sources have told Fastmarkets.
Sources added that they expected mills to increase their offer prices further by the end of May.

Fastmarkets’ weekly price assessment for steel reinforcing bar (rebar) domestic, exw Italy, was €650-660 ($704-715) per tonne on Wednesday, up by €10 per tonne from €640-650 per tonne on May 22.

High scrap costs and a lack of availability of domestic scrap resulted in the Italian market accepting higher offers, with further increased offers expected in the coming days, according to sources.

Some producer sources expect further price rises of €20-30 per tonne by the beginning of June, but whether the market will accept these increases remains uncertain.

“On May 28 producers targeted higher prices due the higher price of scrap and the difficulty of finding scrap,” a trader said.

“[The] lack of scrap has reached tragic levels, and we are all working hand to mouth with a non-existent billet stock,” a producer source said.

While some sources reported improved demand, other sources reported ongoing weak demand amid unfavorable weather conditions in Northern Italy.

“Local demand is strong, and we have cleaned our order book at previous lower prices. Given that all producers have been selling at a loss since March 2024, I am confident that this latest increase will be accepted by the market,” the producer source said.

“Rebar price is higher for new offers, and mills are announcing new price increases at the beginning of June. However, demand is not so strong these days, customers are a little disoriented, and bad weather in Northern Italy is slowing building activities,” a second trader said.

Meanwhile, international scrap prices remained largely stable week on week.

Fastmarkets’ calculation of its daily index for steel scrap HMS 1&2 (80:20 mix) North Europe origin, cfr Turkey, was $375.16 per tonne on Wednesday, up by $1.60 per tonne from $373.56 per tonne on May 22.

Fastmarkets’ weekly price assessment for steel reinforcing bar (rebar), domestic, delivered, Spain, was €635-655 per tonne on Wednesday, up by €10 per tonne from €625-645 per tonne on May 22.

Southern European wire rod
Fastmarkets’ weekly price assessment for steel wire rod (mesh quality), domestic, delivered Southern Europe, was €625-635 per tonne on Wednesday, unchanged from May 22.

A lack of availability of scrap and relatively weak demand resulted in wire rod producers attempting to reduce production, in turn lowering their requirements for scrap.

“The scrap market in Italy was asking steel mills for an increase in scrap prices of around €20 per tonne for June. Steel mills have tried to counteract this increase through production stoppages and differentiating raw material purchases,” a wire rod producer source said.

“These actions were taken because the final product (wire rod/bars/mesh) today does not allow such a significant price increase to be reflected on the market,” the source added.

Lower scrap costs of only a €5-10 per tonne increase have been negotiated, compared to what would have previously been €20 per tonne, sources said.

With energy costs having increased by approximately €5 per tonne, wire rod producers will likely increase offers by a €10 per tonne, Fastmarkets has heard.

Published by: India-Inés Levy