European Commission approves Liberty acquisition of Dunaferr
The European Commission has approved the acquisition of sole control of ISD Dunaferr and ISD Kokszoló by Liberty Steel, Kallanish notes from a Commission notice.
The Commission concluded that the notified transaction would not raise competition concerns, given the companies’ limited market positions resulting from the proposed transaction. The notified transaction was examined under the simplified merger review procedure.
Liberty won the auction in June to acquire insolvent Hungarian steelmaker Dunaferr (see Kallanish passim). Earlier in the year, it had signed a short-term management contract to keep the plant operating after it ran out of working capital and raw materials.
Last month, Liberty and China’s CISDI Engineering Co. signed an agreement with the Hungarian Ministry of Economic Development to develop a decarbonisation pathway shifting Dunaferr from coal-based steelmaking to electric arc furnace technology. This will see the installation of a new 150-tonne capacity EAF to be supplied by CISDI.
Adam Smith Poland
European end users foresee fourth-quarter coil price stability
End users forecast relative stability, with some mild, €10-20/tonne ($11-21) downward adjustment possible for Italian coil prices in the fourth quarter.
“We do not see any signs of recovery from here until December and, according to our projections, final demand will not jump in Q1 2024 either. Consumption for our products is some 25-30% below pre-pandemic levels of 2019 and we have a similar situation in all European countries,” one major end user tells Kallanish. He adds that despite the low consumption, he does not see prices of coil in Europe collapsing but rather adjusting downwards due to high production costs.
Among the sectors particularly hit by the economic crisis are construction and white goods, but now also automotive since a few weeks. While the automotive sector ordered good coil volumes in the first half of the year, demand seems to be faltering since July and there is pessimism about its future capacity to support coil prices and sales.
The European appliances industry has been hit hard by the crisis, with its performance in the second half proving to be particularly weak. Activity remains at low levels and sources in the industry are lamenting squeezed margins due to high costs of steel and other components.
One executive in the sector foresees future coil capacity cuts in Europe. However, he notes there is uncertainty among European producers when it comes to production cuts and how to handle a protracted period of low consumption.
Meanwhile, the tug-of-war between Italian service centres and producers continues against the backdrop of weak orders and a production slowdown. Mills would like to increase prices on high production costs but service centres do not see any space for hikes in such a market. The market is uneventful and although hot rolled coil values have fallen compared to September, no one is willing to buy. A large service centre says they are able to resist through October without buying any product.
At present, Italian HRC is quoted at €600-630/tonne ($630-661) base ex-works, with the high point of the range increasingly hard for mills to achieve. Cold rolled and hot-dip galvanized coil levels are at €720-740/t and €750/t base ex-works respectively, sources suggest.
Natalia Capra France
Northwest EU plate prices surrender further ground
As northern European demand for plate is not showing any post-summer revival, prices have given in further, and may continue to do so.
S355 grade is now seeking orientation around the €800/tonne ($842) mark, some quoting delivered, some ex-works. One realistic observer sees the range at between €790 and €840. Others refuse to believe mills would go under €800/t, especially German suppliers.
“Mills are offering at around €820/t now. I can try to bid lower than €800, but they would not concede,” one northern German buyer believes. Others, too, do not see the €800/t mark being undercut by much. “Certainly not from Ilsenburg [Salzgitter],” a manager in Lower Saxony says. But he does not exclude the possibility, as he states that “we are sure the floor has not been reached, as new projects are rare.”
The floor could be where one Ruhr-based manager sees it already, at around €750/t, even from domestic mills, he claims. However, there are not many who concur. He also however hears one high offer at above €850, which gives an idea of the current market divergence.
Normally, domestic integrated mills sell commodity grades in a bundle with higher-end plate, at still a relatively higher price than re-rollers. But that connection has dissolved lately, meaning big mills are more willing to sell off commodity grades by themselves, he tells Kallanish.
Prices for high-grade plate are deteriorating as well, although some high-tensile and wear-resistant grades are holding up better than others, one source says.
Christian Koehl Germany
Italian commercial vehicle sales grow 22.8% on year in September
Italian commercial vehicle sales gained 22.8% in September 2023 to 136,283 units sold, compared with 110,998 in the year-ago month, foreign automakers’ association UNRAE showed.
Commercial vehicle sales January-September registered growth of 20.6% (+200,000) to 1,176,882 units sold, compared with 976,082 in the year-ago period, but down 300,000 vehicles (-20.3%) than the pre-COVID 2019 level, the UNRAE data, released Oct. 2, showed.
“The positive result is determined by the overcoming of the critical phase for vehicle production, which affected the car market since September 2021,” UNRAE said. ” “Therefore, commercial vehicles ordered some months ago are now being delivered.”
UNRAE classes vehicles weighing up to 35 mt as commercial.
In full year-2022, commercial vehicle sales in Italy dropped by 13%, or by 160,830 units, posting some 24,000 fewer sales than the previous year, according to data released by UNRAE earlier this year.
Italy’s largest carmaker, Stellantis, formerly known as Fiat-Chrysler, registered 44,608 car sales in September, marking a 24.06% rise on the 35,956 units reached in the year-ago month. Stellantis’ market share in Italy grew to 32.73% compared with the 32.39% share of September 2022.
Stellantis brands include Abarth, Alfa Romeo, Chrysler, Citroën, Dodge, Fiat, Jeep, Lancia, Maserati and Peugeot.
UNRAE is made up of 43 foreign car makers, which sell 60 different brands in Italy.
Platts assessed domestic prices for HRC in South Europe at Eur600/mt EXW Italy Oct. 2, unchanged from the previous assessment.
Platts is part of S&P Global Commodity Insights.
Praxilla Trabattoni
European HRC quota for ‘other countries’ immediately full after start of new period
European importers have exhausted safeguard quota for hot-rolled coil originating from ‘other countries’ in a couple of days after start of the new quota period of Oct. 1- Dec. 31, according to European Commission published data Oct. 3.
Currently 1,041,719 mt of HRC originating from “other countries” are awaiting allocation, exceeding the quota for October-December this year of 933,744 mt.
Not all numbers are final of course, but that is the indication,” a Northwest European trader said.
The current situation matches the original expectations of the market sources, as significant volumes of HRC from Asia, mainly falling under ‘other countries’ category, had been imported in the late spring-early summer due to competitive prices.
Quota from South Korea, which has country-specific quota, was filled by 52.51% from a total quota of 186,030 mt.
“Quota for ‘other countries’ was full in the first days of the fourth quarter, in fact the volumes awaiting allocation exceed the allowed volumes,” an Italian distributor said. “So some buyers will have to pay a duty, maybe around [the equivalent] of 2.5%. Which is not bearable for big buyers as they booked HRC with discounts.”
A service center source said: “And we will see how much HRC will be left at port, and if the importers would choose to pay the quota or to pay to keep the material in ports until January.”
Quotas from major HRC supplying countries that have their own quotas, however, have not been filled: the UK used only 1.05% of its assigned quota; India 2.91%; Serbia 0.67% and Turkey 0.3%. Prices from these countries had not been competitive compared with domestic prices and importers had been avoiding purchases.
Demand in the European coil market has been low due to sufficient stocks, low end-user demand and the influx of imported coil in the start of October supports the negative mood in the market, sources said.
Platts assessed domestic prices for hot-rolled coil in Northwest Europe at Eur625/mt ex-works Ruhr on Oct. 3, unchanged on day.
Platts assessed prices for imported hot-rolled coil in the region at Eur600/mt CIF Antwerp on Oct. 3, down by Eur20/mt.
Platts is part of S&P Global Commodity Insights.
Maria Tanatar
EU HRC importers prepare to pay fourth-quarter duties
European importers of hot rolled coil are bracing to understand the amount of safeguard duties they will have to pay on HRC imports previously ordered and being cleared at EU Customs this week, Kallanish notes.
According to the official system of the European Commission, over 1 million tonnes of HRC from countries that do not have a specific country allocated safeguard measure are being cleared at customs this week. Overall, however, there are 933,743t of tariff-free allocations available for October-December; therefore, the 25% duties on the excess volumes will be divided equally among all importers.
Countries supplying HRC into the EU that do not have a specific country quota include Japan and Egypt, among others.
Similarly, tension is growing among HRC importers from South Korea. The country’s quotas were used completely last quarter and some 186,030t of new quotas are now available, but almost 100,000t are waiting to be cleared at customs.
When it comes to imports of other coils, importers will also face duties on other imports: over 130,000t of metal coated coils from China are waiting to be cleared at customs, more than the allocated quota of 127,995t.
Emanuele Norsa Italy
French rebar buyers wait, observe market following increases
The French rebar market continues to stagnate amid low activity, with the exception being some orders from infrastructure projects, Kallanish hears from market participants.
After producers increased prices last week, distributors registered a mild increase in orders at old values. Some sources doubt the hikes will stick due to lower consumption downstream, and believe the market is headed for production stoppages. Other sellers foresee a more moderate increase of €10-20/tonne ($10.4-20.9).
Following the hikes, the market has become “frozen”. Construction companies, purchasing groups and distributors’ customers are adopting a wait-and-see attitude, looking at each other and other international markets for guidance.
The market will need a few days to adjust before accepting and paying the increases. Meanwhile, prices remain stable compared to September, with the market slow and uneventful. Distributors say business is being carried out from day to day, with practically zero visibility. Rebar prices are mostly stable at €600/t delivered on average, sources suggest.
Last week, some steelmakers in France, Spain and Germany pushed up rebar prices by an average of €50/t compared to early September, as prices were near cost levels.
Steelmakers in Europe are facing high energy and raw material costs, as well as lower consumption of rebar, which is particularly hitting Germany. Rebar makers in Italy also pushed up prices (see Kallanish passim). Some sources expect Italian rebar makers to offer in France at cheaper than domestic prices.
Natalia Capra France
Roba Metals signs off-take agreement with H2GS
The Netherlands’ Roba Metals has signed a seven-year agreement to procure low-emission steel from H2 Green Steel (H2GS)’s future facility in Boden-Luleå, Sweden. The total value of the transaction is about €150 million ($157m), Kallanish learns from Roba Metals.
Since 2021, H2GS has raised more than €1.8 billion of equity in three financing rounds. Its greenfield low-carbon steelmaking plant in Sweden will start producing by the end of 2025, with a ramp-up in 2026. Capacity of 5 million tonnes/year is targeted by 2030. Roba Metals expects its first deliveries in 2026.
“We look forward to having the opportunity to offer our customers the option of near-zero emissions steel from H2 Green Steel as part of our product range in the near future … Not only steel producers, but also stainless steel and aluminium producers are investing heavily in CO2 reduction,” Roba Metals says in a note.
Among the several offtake agreements H2GS has secured, Italian steelmaker and re-roller Marcegaglia, an investor in the company, also signed in May a seven-year off-take agreement. The Boden facility will supply Marcegaglia’s plants in southern Europe, the UK and Poland with low-emissions hot and cold rolled, as well as hot-dipped galvanised coil (see Kallanish passim).
Natalia Capra France
Industeel invests in new La Creusot slab caster
Industeel, part of ArcelorMittal, is investing to upgrade its Le Creusot plant in France and install a new vertical slab caster produced by Italian equipment maker Danieli.
The equipment, which will replace ingot casting, will produce special grades of carbon, stainless steels and nickel-based alloys slab of thicknesses up to 150mm, from 1,500-2,100mm widths, and 4 and 6 meters in length. Start-up is planned for May 2025.
Thanks to this investment, the Le Creusot facility will reduce scarfing, transformation losses and rolling passes, optimising the entire process. The Industeel caster will feature a wide selection of Danieli 3Q technological packages, Danieli explains in a note sent to Kallanish.
Danieli revamped in 2017 the other Industeel slab caster at the company’s Charleroi plant in Belgium, Kallanish notes.
Natalia Capra France
Austria’s steel production decreases in August
Austria’s steelmakers decreased crude steel production in August compared to the previous month, according to worldsteel data.
Output amounted to 438,000 tonnes, down by 33% compared to July and 30.5% less on-year, Kallanish notes.
In January-August, the country produced 4.88 million tonnes of steel, down 6.7% on-year.
In 2022, Austria reduced steel production by 4.7% on-year to 7.51mt.
Overall EU output in August fell by 4.4% on-year to 9.1mt. In January-August, EU steelmakers produced 85.7mt, down 9.8% on-year.
Austria’s largest steelmaker voestalpine recently broke ground on the electric arc furnace project at its Donawitz site, part of the Austrian steelmaker’s “greentec steel” plan for low-emission steelmaking (see Kallanish passim). Danieli has been chosen to supply the engineering, production, and commissioning of the EAF, using DIGIMELTER Technology.
Construction of the 850,000 tonnes/year capacity EAF will begin in 2024, with commissioning scheduled three years later.
Earlier, voestalpine approved an investment of around €1.5 billion for the construction of one EAF at each of its two sites in Austria – Linz and Donawitz. These will ultimately replace two blast furnaces by 2027.
Voestalpine expects good earnings after a strong 2022/23 fiscal year (see Kallanish passim). It recorded the highest level of revenue and the best operating result in its history, surpassing even its record year of 2021/22. The firm said in June that expectations were more cautious because of the war in Ukraine, among other geopolitical tensions worldwide, and persistent inflation in both Europe and North America.
Svetoslav Abrossimov Bulgaria