Northern European wire rod prices remain flat
Northern European wire rod prices are stable again this week, with the market sluggish due to low demand, sources say. Participants do not expect the market to change this month.
“The trade in Europe is very weak. There are not much new deals,” one buyer from the Netherlands tells Kallanish.
Domestic transaction prices for drawing-quality wire rod are at €650/tonne ($702/t) ex-works and mesh-grade wire rod is at €660/t.
Producers are asking for €680/t ex-works, on average, for mesh-quality rod.
“The scrap market in Europe is also weak and prices will probably fall in March, and this is also influencing the wire rod market,” another buy-side participant notes.
German old thick scrap sort 3 is at €350/t, while new scrap sort 2/8 was at €350/t. E40 shredded scrap was at €365/t. In Austria, scrap prices are stable in February. For new scrap, sort 2/8 is at €350/t, with old thick scrap sort 3 at €360/t.
“Imports for countries outside the EU, like Algeria and Egypt, continue not to influence the European wire rod market,” another participant in the market observes. “Offers are being heard from outside the EU at €620-630/t cfr Rotterdam, which is too expensive.”
Italian wire rod prices are relatively stable this month (see Kallanish passim). Drawing quality is between €680-680/t delivered. Domestic material is, however, being challenged by competitive import offers from Northern Africa and from Europe.
Svetoslav Abrossimov Bulgaria
Northwest European coil mills keep making price concessions
The price paid for hot rolled coil from northwestern European mills has come down to around €730/tonne ($790) from the level of above €750 reached in early February. There is some doubt that mills can stabilise the softening because real demand does not support mills’ desire to cover their costs, according to market participants.
“Prices were pushed up since the [Blechexpo] trade fair [in November], but the target of €800/t the mills had called for was never achieved,” one German HRC buyer tells Kallanish. He points to the separate playing field of annual contract talks, in which mills largely succeeded in fetching a figure starting with 8. “That helped in overcoming the €600+ price range that prevailed on the spot market into November,” he observes.
Now that the surge in spot prices has stopped, “buyers have smelt blood; they see that the mills’ bookings were sparse in recent weeks,” another observer says. He notes that mills’ costs for slab have eased somewhat, but only by €10-15/t, which is “not enough [to cover] the drop of €40 or so that some are having to concede in their selling prices.”
“Some mills claimed they did get the €800 they targeted, and I even believe them,” he notes. “But I bet that would be for March deliveries to customers with shortages because they banked on imported material that got stuck at customs clearing in Antwerp.”
According to the other buyer, traders have lowered their offers for imported HRC to €649/t cif Antwerp from €700, citing one offer. “That would not be material sitting at the port, but new rollings that would take another 3-4 months to arrive,” he cautions.
Christian Koehl Germany
UK’s TRA recommends extension of steel safeguard measures until 2026
The current measures, which cover 15 categories of steel would expire on June 30, 2024, if they were not extended.
The TRA began an extension review of the safeguard measure in September 2023. At the time of conducting its review, TRA found that imports would likely increase, adding “that serious injury would recur to UK producers across all 15 categories of steel if the safeguard measures were to be removed,” the TRA department said Feb 21.
TRA conclusions are based on the data provided to the TRA, the overcapacity in the global steel market, the risk of steel being diverted to the UK due to measures in other major markets and the attractiveness of the UK steel market, the TRA explained in its press note.
Safeguard measures are a trade defense instrument as a result of trade diversion and distortions in international trade, setting tariff-free quotas based on historical imports. Once quotas are exhausted, a 25% tariff applies.
“UK Steel is delighted that the TRA has recognized that steel safeguards are more than ever necessary to shield the UK from the inevitable trade diversion of all the surplus material that will be shut out of other key markets,” Gareth Stace, Director General of UK Steel, the association of UK steel producer, said Feb 21.
“Global excess steelmaking capacity of 630 million mt is a shocking 60 times the size of the UK market. Even a small proportion of this steel being diverted to the UK would completely overwhelm our market. Capacity is still growing, mostly state-funded and largely for high-emissions steel,” he said.
According to the association, the reasons why the UK’s steel safeguards were first introduced are not only still in place, but conditions have in fact deteriorated, with the “Trump era Section 232 tariffs continuing to deflect trade to exposed markets.” “In a year alone, global steelmaking overcapacity rocketed by 23% and continues to rise against a backdrop of high costs and weak steel demand.”
The steel safeguard measures were put in place in 2018, when the UK was still part of the EU, in response to US Section 232 tariffs imposed by the former president of the US, Donald Trump, causing trade diversion and excess capacity in global steelmaking. While the US has since agreed tariff-free quotas with some countries and regions, including the EU and the UK, most countries still face 25% tariffs when they export to the US.
The UK transitioned steel safeguard measures for 19 product categories in 2021, of which 15 were maintained. Following the TRA recommendation, the Secretary of State for Business and Trade, Kemi Badenoch, must decide ahead of June 30, 2024, whether to extend the safeguard measure for all or some of the product categories.
UK HRC prices unchanged as government prepares to review safeguard measures
Activity for hot-rolled coil in the UK remained subdued during the week of Feb. 19 as most buyers continued to forgo the market owing to weak end-use demand and uncertainty surrounding the review of the country’s steel safeguard measures by the Trade Remedies Authority.
Market contacts continued to report poor UK demand with little sign of improvement in the near term.
Offers from European mills were generally heard across a range of GBP675-700/mt DDP West Midlands.
Offers for non-EU-origin HRC were heard in a range of GBP620-640/mt DDP West Midlands, with market participants suggesting that uncertainty regarding the future of the UK steel safeguard measures on HRC is weighing on demand.
On Feb. 9 the TRA announced that it would review the suspension of the safeguard import quotas in response to Tata Steel UK’s plan to idle its two blast furnaces later in 2024 and replace them with electric arc furnaces.
At the time the TRA stated that its preliminary view would be to suspend the measure for nine months because Tata Steel is the UK’s sole HRC producer.
Tata Steel hopes to commission its EAF early 2027 and will import steel products for customers from its Dutch and Indian operations or third parties until then.
TRA is collecting feedback until Feb. 25 for the review.
According to traders, the current weakness in the UK market has been exacerbated by uncertainty surrounding the measure which, if suspended, is likely to increase orders for non-EU HRC which is currently priced approximately GBP50/mt sourced material.
“A quota suspension will lead to a run on HRC from all non-EU origins except those currently under sanction,” one trader said, adding that India was a “particularly attractive target” given its prices and lead times to the UK market.
While buyers are reluctant to commit given the uncertainty surrounding the future of the trade measure, market participants noted that buyers cannot wait for a final decision from the TRA with purchasing for May and June currently below the market requirement.
“Distributors need material for May and June, and April will be too late to purchase material for this period,” one supplier told S&P Global commodity Insights.
Platts assessed HRC at GBP670/mt ($846/mt) basis DDP West Midlands Feb. 22, unchanged from Feb. 15.
Author Euan Sadden, euan.sadden@spglobal.
Southern European long steel prices flat, scrap feedstock costs start to fall
“This week has been very low in volumes and prices are unchanged, both for [domestic prices] in Italy and for exports,” a producer source said.
As a result, Fastmarkets’ price assessment for steel reinforcing bar (rebar) domestic, exw Italy was €635-655 ($685-707) per tonne on Wednesday, flat from a week prior.
Market participants had been expecting some upward movement in prices last week due to rising scrap costs. But scrap costs in Turkey’s bellwether market started to fall significantly in past seven days.
Fastmarkets’ calculation of its daily index for steel scrap HMS 1&2 (80:20 mix) North Europe origin, cfr Turkey was $405.46 per tonne on Wednesday, down by $10.56 per tonne week on week from $416.02 per tonne.
The Southern European steel market also remained unchanged in the pricing period.
Fastmarkets’ price assessment for steel reinforcing bar (rebar), domestic, delivered Spain was €630-650 per tonne on Wednesday, unchanged since January 31.
Similarly, Fastmarkets’ price assessment for steel wire rod (mesh quality), domestic, delivered Southern Europe was €650-655 per tonne on Wednesday, also flat since January 31.
Published by: Holly Chant
European HRC prices stabilize in slow market; near-term sentiment remains downbeat
Fastmarkets calculated its daily steel hot-rolled coil index domestic, exw Northern Europe at €723.13 ($781.70) per tonne on Thursday, stable day on day.
The index was down by €14.47 per tonne week on week and by €23.12 per tonne month on month.
Stocks across the entire supply chain were relatively low, some industry sources said, adding that buyers would feel the need to restock in two to three weeks.
But other sources said that most buyers prefer to maintain lower stocks due to high price volatility and slow end-user demand, so no big restocking should be expected.
“Many buyers adapted to the volatile market and learned to live with hand-to-mouth purchases, without building high inventories,” a steel service center source in Germany said.
HRC offers from integrated mills in Northern Europe were heard at €740-760 per tonne ex-works in early February, down from €780-820 per tonne ex-works in January.
Trades for low volumes were reported at €720-730 per tonne ex-works in the region.
A re-roller from Benelux was heard offering HRC at €710-720 per tonne ex-works.
Most mills were heard to be offering April lead times, suggesting that producers had weaker order books than had initially been communicated to the market, Fastmarkets understands.
Despite some price drops observed in the market lately, buying remained weak because buyers were sure that the downtrend was not over, Fastmarkets heard.
“Prices are likely to drop to €700 [per tonne ex-works] but not lower. There is no pressure from imports, and production costs remain high,” a trader in the Benelux area said.
Fastmarkets calculated its daily steel hot-rolled coil index domestic, exw Italy at €720.63 per tonne on Thursday, down by €1.31 per tonne day on day from €721.94 per tonne.
The index was down by €10.20 per tonne week on week and by €14.92 per tonne month on month.
The Italian spot market for HRC was also slow on Thursday, with only occasional low-tonnage deals reported by buyers and sellers.
Domestic buyers claimed they had “sufficient stocks, in line with low demand downstream,” and therefore had no appetite for restocking.
Domestic mills were heard offering April-delivery material around €740-750 per tonne delivered (equivalent to €730-740 per tonne ex-works).
Buyer sources estimated workable prices in the range of €710-720 per tonne ex-works.
Some buyers suggested prices will decline to €700 per tonne ex-works in the next few weeks.
Offers of imported HRC from Asia were reported at €620-650 per tonne CFR, with Vietnamese suppliers offering at the lower end of the range.
Despite lower offers from Asian mills and some room for negotiations, pressure from imports on domestic prices was minimal, sources said.
“June-July delivery times offered by most overseas suppliers are not very inspiring. The market is too volatile,” a buyer in Italy said.
Published by: Julia Bolotova
Slow trading in Europe’s steel beams market, prices static
Fastmarkets’ weekly price assessment for steel beams, domestic, delivered Northern Europe, was €760-790 ($822-854) per tonne on Wednesday, unchanged from a week earlier.
Similarly, Fastmarkets’ weekly price assessment for steel beams, domestic, delivered Southern Europe, was €760-790 per tonne on Wednesday, stable week on week.
Market sources said that trading was slow because there was little need for restocking.
“Stock levels are normal in relation to the [weak demand environment],” a trader in Northern Europe said.
He added that mills have been booking orders on a limited basis, with market participants in wait-and-see mode due to their uncertainty over consumption prospects.
Meanwhile, scrap feedstock costs in Turkey’s bellwether market have dropped significantly in the past seven days amid poor finished long steel sales.
Fastmarkets’ calculation of its daily index for steel scrap, HMS 1&2 (80:20 mix), North Europe origin, cfr Turkey, was $405.46 per tonne on Wednesday, down by $10.56 per tonne week on week from $416.02 per tonne.
Published by: Holly Chant
NLMK Europe partners with Turkish plate distributor
The plate division of NLMK Europe has appointed Turkish steel service centre Askon Demir Çelik as an exclusive partner for distribution of quenched and tempered plate in Turkey, effective 1 February.
“The partnership with Askon Demir Çelik corresponds with NLMK Europe’s strategy of collaborating with well-established organisations, offering them comprehensive support in areas such as strategy, technical expertise, and marketing,” the steelmaker says.
The collaboration will be locally supported by specialists from NLMK Turkey, Kallanish notes.
Plate under the Quard brand has superior abrasion resistance for use in heavy-duty applications in harsh environments, NLMK says. Quend brand plate has exceptional structural resistance, making it suitable for demanding applications that require high-yield strength such as crane booms and chassis of heavy-duty machinery, it adds.
NLMK Clabecq is a Belgian producer of thin premium steel plate with tight thickness tolerances. Its equipment includes a reversible quarto mill, a newly revamped continuous finishing mill with four independent stands, an accelerated cooling system on the same line, as well as a modern quenching and tempering unit.
Askon Demir Çelik has steel service centres in Turkey, specialising in processing wear plate, high-strength steels, and special and commercial quality steels for the mechanical and component sheet manufacturing needs of OEMs and end-users.
NLMK Turkey is a trading unit of Russian steelmaker NLMK which manages export supplies of steel products manufactured at all group companies.
Elina Virchenko UAE
European buyers expect steel CRC, HDG prices to drop on low demand, import pressure
Firm offers for cold-rolled coil from European mills were rare in the market because producers preferred to produce more higher-value-added HDG instead, market sources said.
“European mills trim CRC production and make more HDG, when import pressure is not so bad,” a buyer source told Fastmarkets.
Buyer sources reported CRC offers around €840 ($907) per tonne delivered (€825-830 per tonne ex-works) from mills in Southern Europe, but pointed out that this price was “completely unworkable.”
Buyers estimated tradeable values at €800-810 per tonne ex-works, expecting prices for CRC in the region to drop to that level in March.
“[The price for] HRC [feedstock for CRC production] is sliding lower, so naturally CRC will follow,” a buyer in Italy said. said.
As a result, Fastmarkets’ price assessment for steel cold-rolled coil, domestic, ex-works Southern Europe, was €810-825 per tonne on Wednesday, stable on-week.
Meanwhile, overseas CRC suppliers came back with lower offers after the Lunar New Year holidays.
CRC from South Korea for April shipment was offered to Southern Europe at €720 per tonne CFR, compared with €740-750 per tonne CFR in late January.
From Japan, offers of CRC for end-April shipment were heard at €730-735 per tonne CFR.
Market sources said that competitive offers from overseas suppliers were also dragging European prices downward.
“Asian suppliers can supply very good quality CRC at competitive prices. European mills cannot compete with them due to their higher costs of production,” a buyer in Spain said.
HDG
In the HDG market, competition from imports was not so sharp, sources said. Overseas mills were unable to supply the full range of grades and dimensions required by European buyers, so the majority of demand for HDG in Europe was supplied by local mills, sources told Fastmarkets.
The low demand from the major end-user sectors, automotive and construction, remained the key issue in the market.
HDG offers from Southern European producers were heard at €850-870 per tonne per tonne delivered (€840-860 per tonne ex-works) for HDG, with some mills in the lberian market said to be accepting €840 per tonne delivered for bigger volumes.
Buyers’ estimates of tradeable values for HDG were no higher than €840-850 per tonne delivered.
April delivery was still said to be available from local mills.
As a result, Fastmarkets’ price assessment for steel hot-dipped galvanized coil, domestic, ex-works Southern Europe, was €840-850 per tonne on Wednesday, down by €5 per tonne from €845-855 per tonne seven days earlier.
New offers from Vietnamese suppliers of 0.5mm HDG with Z100 coating were reported at $870-880 per tonne CFR to Southern Europe, down by $10 per tonne compared with end-January offers.
Vietnamese mils were offering end-April-early May shipment.
Published by: Julia Bolotova
Salzgitter signs 122 MW solar PPA with Octopus for green steel project
Salzgitter Flachstahl and Octopus Energy have signed a 10-year power purchase agreement for 112 MW from the Schiebsdorf solar farm currently being built in Brandenburg state in Germany, it said Feb. 21.
UK-based utility Octopus, which manages a Eur7 billion portfolio of green energy projects, is to supply 126 GWh/year to Salzgitter for its Salcos green steel project.
“This latest PPA adds another significant source of clean electricity to power our operations, create green hydrogen and ultimately produce greener steel for our customers,” said Ralph Schaper, Salzgitter’s head of energy procurement.
Salzgitter already secured a 50 MW PPA from EnBW’s new He Dreiht offshore wind farm, 114 MW from Iberdrola’s Baltic Eagle offshore wind project as well as an 80 MW hybrid wind/solar PPA with Friesen Elektra.
Salzgitter in April 2023 received a Eur1 billion state grant for phase 1 of Salcos to produce up to 1.9 million mt/year of crude steel from 2026.
The project includes a 100 MW electrolyzer to produce around 9,000 mt/year of the required hydrogen on site from 2026.
According to Salzgitter, full implementation of stage 1 of Salcos would replace some 2.5 million mt of CO2/year.
Octopus meanwhile plans to invest over Eur1 billion in Germany’s clean energy infrastructure by 2027, it said.
The company acquired the Schiebsdorf solar project in January via its Sky fund. The project is to enter operations later this year and is the largest solar farm in Octopus’ renewable energy portfolio.
Octopus Energy Generation’s fund management unit will also announce more deals “very soon,” said co-head Alex Brierley.
PPA consultancy firm Pexapark advised on the deal. According to Pexapark, some 18 solar PPAs with a combined capacity of 1.77 GW were signed in Germany in 2023 with the country expected to surpass Spain as the top market for PPAs in Europe this year.
The Platts-Pexapark PPA (3Pi) index for a standard 10-year solar PPA in Germany was pegged at Eur43.02/MWh on Feb. 19. This level would put the deal at a theoretical value of around Eur54 million ($57 million) over its 10-year lifespan.
Platts is part of S&P Global Commodity Insights, which is a minority stakeholder in Pexapark.
Author: Andreas Franke, andreas.franke@spglobal.com
