Industeel starts construction of new slab caster
Industeel, a European business division of ArcelorMittal Downstream Solutions, has started construction of a vertical caster at its site in Le Creusot, France. This will produce light slab up to 35cm in thickness, Kallanish learns from the company.
The investment of €52 million ($56m) aims at cutting energy consumption, reducing 10% of CO2 emissions annually, as well as reducing scarfing, transformation losses and rolling passes, and optimising the entire process. When the equipment is up and running, its 30,000 tonne/year initial capacity is scheduled to increase to 50,000 t/y. Several steel grades will be produced by the new caster for different industrial sectors including the clean energy and automotive components sectors.
The new vertical slab caster will be produced by Italian equipment maker Danieli. The equipment, which will replace ingot casting, will produce special grades of carbon, stainless steels and nickel-based alloy slab from 1,500-2,100mm widths, and 4 and 6 meters in length. Start-up is planned for May 2025. The Industeel caster will feature a wide selection of Danieli 3Q technological packages.
In 2017 Danieli revamped the other Industeel slab caster at the company’s Charleroi plant in Belgium (see Kallanish passim).
Natalia Capra France
UK conducts HRC safeguard review, expects nine-month suspension
The UK Trade Remedies Authority (TRA) has initiated two reviews of the current safeguards measure on Category 1 steel product hot rolled flat and coil steel, Kallanish notes.
The suspension review and Tariff Rate Quota (TRQ) review are in response to applications from Tata Steel UK (TSUK) and Kromat Trading Ltd. Both reviews respond to TSUK’s recent proposal to close its two blast furnaces in Port Talbot.
If adopted, the production plan TSUK submitted to trade unions for formal consultation on 19 January would significantly reduce TSUK’s capacity to produce hot rolled flat steel for a period, and would require greater imports.
“This would mean that the current level of duty-free TRQs for Category 1 steel would be insufficient for UK industrial needs. Additional imports required in place of reduced domestic production would face tariffs of 25% after they exceeded the current quota size – something we have already started to see happening as imports have increased,” TRA says.
“We are carrying out the reviews in parallel with the consultation between TSUK and trade unions. Should the consultation result in a different production plan, the TRA would take that into account in making a recommendation to the Secretary of State for Business and Trade,” it adds.
Subject to any further comments received from UK producers, the TRA intends to recommend that the safeguard measure on Category 1 products is suspended for nine months.
TRA expects the TRQ review to take longer to carry out than the suspension review. The revised TRQ regime will then replace the temporary suspension of the safeguard measure for this steel category.
Currently, TRQs are allocated to countries based on traditional trade flows. As part of this review, the TRA is considering whether it is appropriate to change the method of allocation to give importers an individual allocation of TRQs. The proposed scheme would not tie quotas to an individual country, meaning importers would be free to choose the source of imports.
“We want to avoid a situation where new imports needed to backfill reduced domestic production pay tariffs of 25%, loading additional costs onto the UK economy,” says TRA chief executive Oliver Griffiths.
Interested parties must register their interest by 25 February.
Adam Smith Poland
Italian coil derivative market stagnates
The Italian coil derivative market is suffering from weak consumption and relatively high upstream prices, in line with the weak sales performance seen in the fourth quarter last year, Kallanish hears.
Service centre clients continue to report weak demand for their products, particularly in the white goods, automotive and earth-moving machinery sectors. In the white goods industry, some clients are said to be postponing the delivery of already purchased material.
Despite the reduced consumption, sheet values have increased by around €150/tonne ($161) compared to the lowest levels seen at the end of 2023, sources say. However, there is no clear indicative price as sales are occurring only for extremely low tonnages and infrequently throughout January and February so far. Hot rolled sheet is at between €820-830/t ex-works, with some €20-30/t more charged for pickled material.
As sales are scant and for small volumes, customers have not accepted to buy volumes at the recently increased prices. Today’s transactions are insufficient for service centres to cover processing costs or the purchasing price of hot rolled coil in recent weeks.
European HRC producers have been mulling another slight increase for April delivery but, given the slow consumption, the further hike has not yet been announced. The outlook for coil derivatives consumption remains negative with squeezed margins. Domestic HRC is now at an average of €770/t base delivered, sources suggest. This however is for very small volumes.
Natalia Capra France
Scrap is the future of steel: Marcel Genet
China’s growing scrap generation will facilitate steelmaking decarbonisation in that country, but the main challenge will be to replace its integrated long steelmaking capacity with electric arc furnaces. The issue of making high-quality steel in EAFs is not down to scrap, meanwhile, but to technology investment, according to Laplace Conseil founder and president Marcel Genet.
“Scrap is the future of steel,” Genet proclaimed at Kallanish Steel Scrap 2024 in Istanbul last week. This is not least because it has the lowest operating cost process over the complete steel cycle, lowest capital cost, and is the lowest CO2 emissions process ready for net zero.
Scrap collectors, traders and steelmakers are however facing growing problems. Scrap is looked down on because of the perception it cannot be used to make the same quality of steel as in a blast furnace, because the recycling process is polluting, and because of low awareness in society. Moreover, integrated steelmakers are using scrap to try avoid decarbonising their production process, Genet pointed out.
Industry fragmentation and conflicting short-term interests, like monthly price negotiations, limit the collective effectiveness of the supply chain. A joint strategy and common agenda could improve the industry’s position, Genet said, while direct reduced iron is “scrap’s best friend” to dilute impurities and grow an accessible market.
China’s steelmaking industry developed so fast that the country had little time to accumulate much end-of-life scrap. But by 2050, Chinese crude steel output is expected to drop below 800 million tonnes/year, while scrap availability is seen surpassing 600mt, narrowing the current deficit considerably.
Genet highlighted US steelmaker Nucor as a company “consistently promoting scalable low-capex technologies in mini plants to beat behemoth plants”. Besides efficiently utilising the capabilities of scrap recycler subsidiary David J Joseph Company to supply very high-quality scrap, Nucor is investing in small modular reactors. “Nucor is providing the best example of how to manage the energy transition,” the consultant observed.
As for scrap quality, meanwhile, “the problem of making automotive sheet in an EAF is not scrap or residues. It’s investment in making high-quality steel. You need to have a tip-top, consistent hot strip mill. You need a thin slab caster. The barrier to entry is not scrap, it’s money to invest in production technology!” Genet concluded.
Adam Smith Poland
Another Polish distributor plans to delist
Bydgoszcz-based steel distributor Drozapol-Profil plans to delist from the Warsaw Stock Exchange by carrying out a compulsory buyout of shares from minority shareholders, Kallanish notes.
The firm’s revenue in the nine months through September 2023 halved on-year to PLN 46.3 million ($11.5m) and the firm sank to a net loss of PLN 5.7m versus a year-earlier profit of PLN 10.9m. Of its total shareholding, 36% is free floated.
The move follows fellow Polish distributor Konsorcjum Stali’s delisting from the stock exchange in 2020. Poland’s third-largest distributor Bowim remains listed on the stock exchange for the time being.
Adam Smith Poland
European apparent steel consumption to improve in 2024, but at slower rate than expected – Eurofer
Apparent demand is expected to recover by 5.6%, rising to 137 million tonnes in 2024, Eurofer said in its first-quarter outlook report on Thursday February 8, revising down its previous upbeat forecast of a 7.6% recovery for the year.
The European regional steel industry association also lowered its expectations for 2023, during which it now expects apparent steel consumption to have fallen by about 6.3% year on year to 129 million tonnes.
In its previous outlook in October, Eurofer said it expected to see a 5.2% year-on-year consumption drop to 132 million tonnes for 2023.
“Improvements in apparent steel consumption are not expected before the first quarter of 2024,” the association said.
But apparent steel consumption in the EU did improve in January, with flat steel prices recovering, supported by restocking.
Fastmarkets’ daily steel hot-rolled coil index domestic, exw Northern Europe averaged €731.73 ($788.32) per tonne in January, sharply up from a monthly average of €688.20 in December 2023. The January average also is the highest since May 2023.
That trend seems to be changing in early February, sources said, and in recent weeks buyers have been trying to reduce inventories and have shown little interest in purchasing.
HRC prices have been edging down in the spot market since February 2, although market participants told Fastmarkets that a full-on downtrend was unlikely because the steel mills have healthy order books and the import options are limited.
“The overall evolution of steel demand remains subject to very high uncertainty,” Eurofer said.
End-user outlook
Automotive
The automotive industry in Europe was one of the few steel-consuming sectors to perform well in 2023, with data from the European Automotive Manufacturers Association showing that new car registrations surged by almost 14% in 2023, with more than 10.5 million new vehicle sales.
Eurofer said automotive output in the bloc will have increased by 8.8% overall in 2023, revised up from its previous recovery rate prediction of 6.4%.
But overall output levels in the sector remain low in historical terms, with the industry continuing to be exposed to external factors and expected to remain at pre-crisis levels seen in 2018-2019. The sector is expected to grow by 0.1% in 2024 and by 0.2% in 2025.
Market participants said that demand for steel coil from the automotive industry has been broadly stable at low levels through 2023 and was not expected to show any significant rebound in 2024.
Construction
The construction industry, meanwhile, is expected to have declined moderately, by 2.1%, in 2023, Eurofer said, revised down from a 1.7% decline forecast in October, after having grown by 4.8% in 2022.
For 2024, Eurofer said construction activity will continue to decline, falling by 0.4% rather than its previous prediction of a 0.2% recovery.
“This negative trend [in construction output] is expected to persist and to extend [through the first half of] 2024, mainly due to the impact of continued monetary policy tightening, via higher mortgage rates, [restricting] housing demand,” Eurofer said.
Among construction sub-sectors, civil engineering is expected to remain the best-performer in 2024 due to support from EU-wide public policies. But Eurofer acknowledged that the effect of policy initiatives has become “increasingly uncertain and difficult to quantify due to the recent deterioration of the economic outlook.”
Weak construction demand has weighed heavily on the European long steel market in recent months, with high interest rates limiting activity, especially in the residential sub-sector, the association said.
“The construction industry is facing pressure from rising interest rates [and] there is a lack of new projects,” a European trading source said.
Fastmarkets’ price assessment for steel reinforcing bar (rebar), domestic, delivered Northern Europe averaged €655 per tonne in January 2024, up slightly by €12.50 per tonne from a monthly average of €642.50 per tonne in December 2023. The assessment however was sharply down from a monthly average €768.13 per tonne in January 2023.
Published by: Julia Bolotova
Polish rebar, wire rod prices decrease slightly amid sluggish demand
Rebar
Polish mills offered rebar at 2,900 zloty ($720) per tonne CPT in the week to Friday, which nets back to around 2,880 zloty per tonne ex-works.
The mills revised their offers downward compared with the previous week, when offers were heard in the range of 2,900-2,950 zloty per tonne CPT, which nets back to around 2,880-2,920 zloty per tonne ex-works. Offers at the higher end of this price range were not available this week, according to Fastmarkets’ sources.
“I don’t think anyone bought anything from Polish mills [even] at their offer price of 2,900 zloty per tonne CPT [last week],” a distributor source told Fastmarkets.
They added that deals for volumes of around 500 tonnes and above were concluded at 2,850-2,860 zloty per tonne CPT last week, which nets back to about 2,830-2,840 zloty per tonne ex-works.
A deal in an even lower range of 2,800-2,820 zloty per tonne CPT for February production was heard last week, which nets back to around 2,780-2,800 zloty per tonne ex-works.
Fastmarkets excluded these transactions from this week’s assessment because they were done in the previous assessment period.
This week, price levels in the range of 2,800-2,820 zloty per tonne CPT were not available in the market, sources told Fastmarkets.
Besides, market activity remained soft this week.
“Demand is still weak, and it will probably not change until March,” the distributor source told Fastmarkets.
“The [market] activity is very low, not much is happening. Buyers are waiting to see where the market direction will go,” a second distributor source told Fastmarkets.
They added that one Polish producer decreased its scrap prices by 50 zloty this week.
“New scrap prices will be available by other producers next week,” the second distributor added. “There are some expectations in the market that other producers might do the same. This can eventually result in slightly decreased rebar prices.”
They estimated workable market levels in the range of 2,850-2,870 zloty per tonne CPT, which nets back to around 2,830-2,840 zloty per tonne ex-works.
A consumer source estimated the tradable market level for volumes above 1,000 tonnes at 2,880 zloty per tonne CPT, which nets back to around 2,860 zloty per tonne ex-works. Fastmarkets excluded this estimation from its final assessment because it is not in line with the volume specifications in its methodology.
As a result, Fastmarkets’ weekly price assessment for steel reinforcing bar (rebar) domestic, exw Poland was 2,830-2,840 zloty per tonne on Friday, down by 40-50 zloty per tonne from 2,880 zloty per tonne on February 2.
Wire rod
Polish mills continued offering wire rod in the range of 3,100-3,300 zloty per tonne CPT in the week to Friday, sources told Fastmarkets. Slightly lower offers were also heard at 3,050 zloty per tonne CPT.
However, demand remained very weak, and no major deals were heard in the market.
The offer price of 3,300 zloty per tonne CPT was not considered tradable by market participants, except for very small volumes.
A third distributor source estimated tradable market levels for wire rod in the range of 2,850-3,000 zloty per tonne CPT, specifying that for volumes between 50 and 100 tonnes the workable price should be closer to 2,850 zloty per tonne CPT.
However, this level was not confirmed by other market participants. They estimated the tradable market level in the range of 2,900-3,000 zloty per tonne CPT.
Thus, Fastmarkets’ weekly price assessment for steel wire rod (drawing quality), domestic, delivered Poland was 2,900-3,000 zloty per tonne on Friday, narrowing downward by 100 zloty per tonne from the previous week’s 2,900-3,100 zloty per tonne.
Import offers of wire rod from Italy to Poland were heard in the range of €675-700 ($727-754) per tonne CPT.
Import offers of the material from European producers were also heard at €660 per tonne CPT.
Ukraine continued to offer mesh-grade wire rod at €660-670 per tonne CPT, and some deals for such material were concluded at prices in that range, Fastmarkets heard.
Published by: Darina Kahramanova
Aperam sees hard times persisting
The European stainless steel market remains “deeply depressed” despite some improvement in the fourth quarter of 2023, says stainless steelmaker Aperam in its 2023 financial report monitored by Kallanish.
“Extreme margin pressure has persisted and volumes reflect an industrial recession in Europe,” comments chief executive Timoteo Di Maulo.
Owing to lower sales volumes and weaker prices, the company’s turnover last year decreased by 19.2% on-year to €6.5 billion ($7 billion). Shipments also declined by 4.8% to 2,198,000 tonnes. Adjusted Ebitda reached €304 million compared to €1.1 billion the previous year.
The stainless and electrical steel division recorded sales of €4.2 billion in 2023 with shipments at 1,550,000t. This reflects a decrease from €5.5 billion turnover and shipments of 1,600,000t in 2022.
The Recycling & Renewables division, the best-performing segment, recorded an Ebitda of €156m last year compared to €86m in 2022 thanks to higher volumes and positive inventory valuation effects. Sales stood at €1.9 billion, against €2.4 billion in 2022. In 2021, the steelmaker acquired German stainless recycling company ELG Haniel for a total value of €357m, including €30m equity (see Kallanish passim).
“This crisis reveals how important the successful integration into raw materials has been for Aperam. In Q4, the Recycling & Renewables division was Aperam’s largest earnings contributor for the first time. Entering 2024, Phase 5 of the ‘Leadership Journey’ – our self-help program – started,” Di Maulo concludes.
The stainless steel market in Europe is going through a phase of destocking and strong stagnation. Steelmakers are grappling with high cost of production and weak sales of coils and derivatives. In the coil derivative sector, aggressive commercial behaviours in certain EU countries are contributing to dragging down prices. The entire supply chain confirms a painful margin squeeze is occurring, Kallanish notes.
Natalia Capra France
Eusider buys Profiltubi, expands tube range offer
Italy’s Eusider has acquired a 100% shareholding in Steel Metal Service Holding Gmbh from investment fund Auctus Capital Partners, Kallanish learns from Eusider.
An Italian antitrust authority document obtained by Kallanish says Steel Metal Service Holding, through Auctus Project Italy, owns Italian tubemaker Profiltubi, which in turn owns re-roller OMV-Officine Metallurgiche Ventura serving the automotive and appliances sectors.
The document states the merger does not “involve the establishment or strengthening of a dominant position”. In an interview with broadsheet Il Sole 24 Ore, Eusider owner Eufrasio Anghileri says the move enables the company to widen its product offer in the tube sector. He adds that last year, the group posted €1 billion ($1.08 billion) in turnover as the company registered weaker prices but mostly stable sales volumes. For 2024, the firm expects stable performance.
Natalia Capra France
Von der Leyen suggests Mauritania-EU green steel exports
European Commission President Ursula von der Leyen has suggested Mauritania use its renewable energy resources to produce low-emission steel for export to Europe, Kallanish notes.
Von der Leyen, together with Spanish Prime Minister Pedro Sanchez and European banking and industry representatives, met with Mauritanian President Mohamed Ould Cheikh El Ghazouani in Nouakchott last week to discuss regional security, migration and green hydrogen development.
The Commission President said the EU wants to produce 10 million tonnes/year of green hydrogen by 2030, but also needs to import another 10mt and is therefore looking for partners abroad. With the right investment and infrastructure, Mauritania can harness over 350 gigawatts of renewable energy from the wind and sun, she added.
But, somewhat surprisingly given the concerns over deindustrialisation in Europe, von der Leyen also suggested Mauritania go into green steel competition with the EU.
“Mauritania is … Africa’s second-largest iron producer and the majority of your iron is exported as raw ore,” she noted. “But if we have clean energy coming into the game, the processing into green steel could stay here in Mauritania and that’s a huge step because this is the added value, this is where the jobs are, this is where the prosperity is.”
“You could export iron and premium green steel. The technology works, but … the production of green steel needs an essential input and that is green hydrogen,” she continued.
“Demand for Mauritania’s green hydrogen and potentially green steel is set to grow exponentially in the European single market … This is an excellent business case,” von der Leyen opined. The Commission will support building the required infrastructure and training the local workforce, she added.
A European business mission will visit Mauritania in March to explore investment opportunities, following up on the 8 February meeting in Nouakchott.