Bekaert invests in clean energy for Italian plant
Belgian wire specialist Bekaert is investing in clean energy in Italy. It has signed a 12-year Power Purchase Agreement (PPA) for renewable electricity with Edison Next, part of the Edison Group, Kallanish notes.
Edison will finance and build a photovoltaic plant at Bekaert’s facility in the province of Cagliari, Sardinia, with a total power of 6.1 megawatts, scheduled for commissioning in 2025.
This will cover over 20% of the Cagliari plant’s energy requirements, producing over 11.2 gigawatt-hours a year and helping to cut the plant’s emissions. The solar project at Bekaert’s Sardinia plant “incorporates trackers that follow the path of the sun to optimise renewable energy production … Photovoltaic is a mature technology that, backed by the PPA formula, represents a primary fundamental element for energy transition by companies,” Bekaert and Edison Next explain in a joint note.
Bekaert intends to cut greenhouse gas emissions by 46.2% by 2030, and invest in solar plants in other countries.
In its 2023 financial report, Bekaert said economic uncertainty continues and several end-markets remain challenging. However, trading in 2024 has started well across the majority of the firm’s business units, with modest sales growth and stable margins forecast for this year (see Kallanish 5 March).
Natalia Capra France
Ascometal must deliver stock to gain time: unions
French trade unions have launched an urgent appeal to the French government to take immediate and decisive action to save Ascometal.
The company has been declared insolvent after the sale of its units to Italian long steel producer Acciaierie Venete was terminated last month (see Kallanish 28 March).
“Ascometal has about 14,000 tonnes of finished product in stock. It is complicated to ship this because transport needs to be paid and the company has no more money,” a source close to the firm says. He adds that to give it some financial breathing room, the firm will need to ship at least 6,000t of first-choice material very quickly.
“The second objective is to be able to restart the steelworks as quickly as possible because we have been asked to produce 11,000t,” the CFDT union says in a note. The company needs to urgently deliver to certain customers, it adds.
The proposed sale to Acciaierie Venete, announced in December last year, was to include the Hagondange facility in the Moselle region, Custines in Meurthe-et-Moselle, and the Le Marais plant in the Loire region, as well as Ascometal’s CREAS research centre.
Another source close to the dossier believes different buyers may be interested in some of Ascometal’s facilities but it will be challenging to sell all the facilities to only one buyer. Following the termination of the negotiations with Venete, Ascometal started judicial reorganisation proceedings – “procédures de redressement judiciaire” – for each of its units. A public tender will be held to find a buyer in the coming weeks.
Natalia Capra France
Europe longs: Mills expect firmer market
Most European producers increased their offers for long products this week, anticipating demand to improve after the Easter holiday period and propped up by a rebound in scrap costs.
The Argus weekly Italian rebar and drawing-quality wire rod assessments remained at €570/t ($620/t) ex-works and €645/t delivered, respectively.
In Italy, rebar sales prices remained at €560-570/t ex-works, including extras for sizes, but mills announced offers at up to €600/t ex-works, referring to increasing scrap costs. Buyers were sceptical about the price increases as mills still needed to fill their April order books and there were no expectations for substantial increases in consumption. Buyers that needed to replenish stocks placed orders in late March, when there were signs that prices had bottomed out.
In the nearby markets, no fresh offers were reported. Rebar was quoted at €570-580/t fca late last week, when some Italian mills were eager for new sales. In particular, the tradeable value for rebar in Poland was reported at €615-620/t delivered this week, while in late March deals were concluded slightly below this. In the meantime, offers for Polish rebar stood at €625-630/t delivered to domestic buyers, while in nearby markets prices were pegged at €625-640/t delivered. Similar prices were available for overseas material from docks in the Baltic region.
In Germany, prices for small-to-medium purchases of rebar remained at €630-640/t delivered. Spanish rebar was still quoted at €615/t cfr to northwest Europe, with small discounts deemed available. But mills are likely to try and increase prices should they see demand.
In the Balkan region, Bulgarian rebar prices settled at 1,190-1,210 lev/t (€608-619/t) delivered late last week, while in Romania rebar was available at €630-640/t delivered.
But some customers showed more interest in overseas offers in late March. Rebar was mainly booked from Turkey, as prices were at $585-590/t fob, which would be below €600/t delivered in any region. Egyptian rebar was quoted at $580-590/t fob, but was available for later shipment.
Southern and northwestern European customers were booking Asian wire rod at $520/t fob in late March, which is estimated at no higher than $600/t cfr depending on the ports. Some buyers expressed concerns that the next “other countries” quota could be exhausted promptly again, as almost 83,771t were awaiting clearance in the first days of April. Turkish allocation was estimated to be filled promptly in this period too.
Trade restrictions supported stronger prices for wire rod in Europe, with mills announcing up to €20/t price increases. In particular, new offers for drawing quality material in the Italian market were indicated at €650/t delivered. In other markets, mills pushed up offers from €660/t delivered to up to €680/t delivered. Mesh quality wire rod in Germany and other nearby markets was available at €620-630/t delivered.
Reliance acquires US steel service center Mid-West Materials
Reliance, one of North America’s largest metals service center companies, has expanded its footprint in Ohio by acquiring all the outstanding equity interests of flat-rolled steel service center Mid-West Materials, the companies said April 2.
“The addition of Mid-West Materials increases our flat-rolled presence in the critical markets in and around Ohio, which primarily service North American OEMs,” Reliance CEO Karla Lewis said in a statement. “Mid-West Materials aligns well with our acquisition criteria of a well-run company that is immediately accretive to our earnings and expands our offerings to customers with modern, high-performance processing capabilities.”
Lewis said Mid-West’s facilities will benefit from Reliance’s scale and “access to capital for investments in value-added processing capabilities and the knowledge base and breadth of expertise throughout our extensive family of companies.”
Mid-West is based in Perry, Ohio. It supplies hot-rolled, high strength hot-rolled, coated and cold-rolled products to the trailer manufacturing, agriculture, metal fabrication and building products markets. Its sales totaled about $87 million in 2023.
The terms of the acquisition were not disclosed.
The Scottsdale, Arizona-based Reliance, formerly named Reliance Steel & Aluminum, operates from over 315 locations in 13 countries. It provides value-added metals processing and distribution services. The company reported net income of $1.34 billion on sales of $14.81 billion in 2023.
In February, Reliance announced the completed acquisition of Cooksey Iron & Metal and the pending acquisition of American Alloy Steel, both metal service centers.
Reliance’s acquisitions come as US steel prices remain at historically elevated levels, though they have fallen from record highs seen in 2021. Platts assessed the daily TSI US hot-rolled coil index at $825/st on an ex-works Indiana basis April 2, according to S&P Global Commodity Insights data.
ArcelorMittal Zenica to shut coke plant
ArcelorMittal’s Zenica, Bosnia-based long steelworks plans to close its coke battery as a result of rising costs and reduced steel demand, Kallanish notes.
However, the company will continue to produce steel through the blast furnace route, sourcing coke from external sources, it says.
According to the company, significant maintenance efforts over the past ten years have not been able to extend the coke battery’s life. It has concluded that further upgrades are not feasible and would not meet high environmental standards.
“This is a difficult day for the company, but ArcelorMittal Zenica will make every effort to ensure that the closure of the coke battery has as little impact as possible on the local economy,” says the plant’s chief executive, Nikhil Mehta. “We are committed to stabilising the company’s operations and our goal is to ensure the self-sustainability of our business.”
ArcelorMittal Zenica reported a net loss of BAM 159 million ($88.2m) last year compared with a net profit of BAM 41m in 2022 (see Kallanish passim).
Shipments were at their lowest level for the last 14 years, due to a 12% year-on-year drop in demand, and a 20% increase in the cost of electricity, resulting in additional costs of BAM 4m.
The firm does not expect the market outlook to improve in the coming months.
In January, Zenica resumed production after pausing output at its rolling mills in November, due to weak market conditions (see Kallanish passim).
ArcelorMittal Zenica is the largest producer of long products in the Balkans with a capacity of 700,000 tonnes/year. The basic product range includes rebar in bars and coils, wire rod, mesh and lattice girders.
Svetoslav Abrossimov Bulgaria
Stahl Gerlafingen closes production line
Stahl Gerlafingen has confirmed its intention to close one of its two rolling lines.
The Swiss maker of long products, a unit of Italy’s Beltrame group, warned of the move earlier (see Kallanish 20 March). Shortly before Easter, its management sent out an announcement stating that the closure of its line for merchant bar and sections is “unavoidable”.
The company bemoans that its merchant bar exports have been de-facto banned by the EU, of which Switzerland is not a member. “The export of wide merchant bar, which used to generate good revenue, has been practically made impossible by the EU since July 2023,” Stahl Gerlafingen says in a statement sent to Kallanish upon request.
Swiss mills are also hurting from high costs for electricity in the country, and especially from record-high grid fees, Stahl Gerlafingen points out. The closure of the production line would mean the loss of 95 of around 600 jobs at the mill.
The closure would not affect the production of rebar, which accounts for two thirds of the mill’s annual output of 700,000 tonnes, and which serves half of the country’s annual demand for rebar.
Christian Koehl Germany
SSAB proceeds with Luleå zero-emission EAF conversion
SSAB says it will proceed with its overall technological transition, involving the construction of a fossil-free electric arc furnace mini-mill in Luleå, Sweden.
The new Luleå mill will have a crude steel capacity of 2.5 million tonnes/year, and consist of two EAFs, advanced secondary metallurgy, a direct strip rolling mill, and a cold rolling complex, Kallanish hears. It will be supplied with a mix of fossil-free sponge iron from the Hybrit demonstration plant in Gällivare and recycled scrap.
The total mini-mill investment is estimated at €4.5 billion ($4.8 billion), including contingencies. By investing in new technologies, SSAB is avoiding investments otherwise required in existing plant and equipment of €2 billion during the next ten years, the company points out. The plan is to fund the investment with own cash flows and within SSAB’s financial targets.
The new mini-mill will have a better cost position with lower fixed costs, higher efficiency, shorter lead times and eliminated CO2 costs, SSAB notes. The mill design includes a production increase of 0.5m t/y, and mix improvement with 1m t/y increase of special and premium steel grades. Startup of the new mill is planned at the end of 2028, with full capacity to be achieved one year later.
SSAB decided in 2023 to transform the Oxelösund mill to fossil-free production, with Luleå now the second step. As a third step, it plans the transformation of the Raahe, Finland-based steelworks.
Meanwhile, LKAB, SSAB’s partner in the Hybrit pilot plant, has bemoaned bureaucratic hurdles potentially delaying production. “The transition in Sweden is still hindered by time-consuming and unforeseeable permitting processes. We have already been forced to postpone scheduling for the Hybrit demonstration plant to late 2027 and there is a great risk of a delay well into 2028,” says LKAB chief executive Jan Moström.
Ideally, another direct reduction plant with Hybrit technology is projected to be built around 2030, to further increase supply of fossil-free sponge iron.
Christian Koehl Germany
European HRC market slow after holiday break; sources expect prices to slide further
Fastmarkets’ indices were not published on March 29 and April 1 because of the Easter holiday in the UK.
The index was down by €6.25 per tonne week on week and by €54.25 per tonne month on month.
Trading remained slow on Tuesday in Northern Europe, with offers from integrated mills reported at €670-690 per tonne ex-works at lead times of around four to six weeks.
A Benelux-based reroller was offering HRC at €650 per tonne ex-works, but sources said the price could be negotiated for firm bids.
Buyers estimated the tradable level at around €650-670 per tonne ex-works on Tuesday.
“The downtrend [in the HRC market] is not over yet, so no one is really ready to buy [HRC right now],” a buyer in Germany told Fastmarkets.
Sources said there was still room for further price reductions, with the persistent downtrend in global raw materials prices adding to their pessimistic outlook.
“Iron ore prices hit two-year lows [on April 2], with mills [under] constant pressure from buyers to reduce [their finished steel] prices,” a steel service center source said.
Buyers still believed output cuts were inevitable among European flat steel producers and expected some equipment to be taken offline in April and May to balance the market.
Meanwhile, mills continued to hold back from making any official statements regarding reductions in steel output.
In Southern Europe, Fastmarkets’ corresponding daily steel hot-rolled coil index domestic, exw Italy was calculated at €643.75 per tonne on Tuesday, down by €1.25 per tonne from €645.00 per tonne on March 28.
The index was down by €7.92 per tonne week on week and by €64.17 per tonne month on month.
Offers from one local supplier in Italy for May-delivery HRC were reported at €650-660 per tonne delivered, which nets back to €640-650 per tonne ex-works.
Most sources said prices in Italy had yet to hit rock bottom.
“It looks like we are moving toward the €600 [per tonne ex-works] mark,” a buyer source said.
Import offers were limited in Italy on Tuesday, with HRC on offer from Asia at €570-580 per tonne CFR for June-July arrival, sources said.
But Italian buyers were cautious about making new HRC bookings from Japan, Taiwan, Vietnam and South Korea, due to the uncertainty over potential safeguard duties after June 30.
According to European customs statistics, the “other countries” HRC quota for the second quarter of 2024 was already at 80% as of April 1, with 740,890 tonnes of the total 923,594-tonne quarterly allowance already awaiting allocation.
The “other countries” category includes Japan, Vietnam, Taiwan and Egypt.
British Steel secures planning permission to install EAF at Teesside plant
The company said its application had been approved by Redcar and Cleveland Borough Council following a detailed consultation period.
British Steel is also awaiting a decision from North Lincolnshire Council regarding its application to build another EAF at its Scunthorpe site.
EAF technology utilizes an electric current to melt scrap steel or iron and produce steel, whereas traditional blast furnaces rely on coke, a carbon-intensive fuel made from coal, to produce steel.
Under the existing proposals, British Steel’s Teesside operations will consist of one 100-mt EAF, one 100-mt ladle furnace, one 100-mt vacuum degasser and two continuous casters, supplying the company’s Teesside Beam Mill and Skinningrove works.
At Scunthorpe, the company is proposing an operation consisting of one 130-mt EAF; two 130-mt ladle furnaces, one 130-mt degasser and two continuous casters.
The company advised that its proposed shift to EAF steelmaking at Teesside and Scunthorpe remains subject to appropriate support from the UK government.
British Steel said it was moving ahead with preparations at both sites, including the undertaking of environmental and technical studies to ensure that its proposals can be delivered at the earliest opportunity while discussions with the UK government progress.
The proposed installation of EAFs in place of the existing blast furnaces at Scunthorpe and Teesside are part of a GBP1.25-billion ($1.57-billion) decarbonization plan unveiled Nov. 6 2023.
Under the schedule put forward by British Steel, the new furnaces could be operational by late 2025 with the company seeking to maintain current operations until a smooth transition to EAF steelmaking can be implemented.
“We are committed to working with the UK Government and need to reach an agreement quickly so we can achieve our ambitious goals, secure thousands of jobs and keep making the steel Britain needs for generations to come,” said British Steel president and CEO Xijun Cao.
British Steel first unveiled its Low-Carbon Roadmap in October 2021 pledging to invest in a range of technologies to deliver net-zero steel by 2050, and significantly reduce its CO2 intensity by 2030 and 2035.
Turkey-based Ussuri eyes Romania low-emission HRC mill
Turkey-based investment firm Ussuri Capital, headed by former Metinvest marketing director Roman Kurashev, plans to commission a greenfield cold rolling and galvanizing plant in Romania in 2027. The pre-feasibility study was completed in March.
The plant will have a 400,000 tonnes/year capacity push-pickling line, 6-hi cold rolling mill with 250,000 t/y capacity and equal capacity hot-dip galvanizing line, and a 130,000 t/y continuous colour-coating line.
Capital expenditure is estimated at €160 million ($172m). The firm is targeting annual revenue of €386m and Ebitda of €45m by 2032. It is currently carrying out due diligence on plant location and capital structure.
In Phase 2, planned for 2026-2030, the firm will install a 1.25 million tonnes/year electric arc furnace fed by local scrap, and same capacity hot strip mill for ultra-thin hot rolled coil. This will feed the downstream units as well as be sold on the merchant market. Capex is projected at €715-800m, with Phase 2 revenue seen at €1.04 billion and Ebitda at $270m in 2032.
Hot rolled coil feedstock will initially be imported from non-EU sources, both blast furnace-oxygen converter and electric arc furnace-based producers, depending on price and availability. Ussuri is relying on the 2026-2032 phaseout of emissions allowances raising EU domestic steelmaking costs and therefore steel prices by the same rate as the Carbon Border Adjustment Mechanism (CBAM) raises the cost of steel imports.
“We view the CO2 tax as just a cost from a unit economics point of view. So, it doesn’t particularly affect the economics of the re-rolling stage. The increase in prices will be paid by consumers in the end,” an Ussuri representative tells Kallanish.
Due to the mammoth size of the task, the firm sees only 40% at most of flat steel capacity in Europe being of the low-emission variety by 2034. Much of the steel in Europe will still be made using traditional technologies and steel prices will be elevated.
Adam Smith Poland