Category: Latest Updates

Slow demand continued to drag on wire rod prices in Poland in the week to Friday July 7, with a rebound unlikely in the short term, sources told Fastmarkets.Official offers for July-rolling low-carbon drawing-quality wire rod by local steelmakers were reported at 2,800-2,900 ($689-713) zloty per tonne CPT, down from 3,100-3,200 zloty per tonne CPT for June-rolling material.

Transactions, however, were reported at lower levels — at 2,750-2,800 zloty per tonne CPT — during the assessment week.

Traded volumes remained thin amid ongoing weakness in the key consuming industry — construction.

“Nobody books more than a truck [of wire rod], nobody is restocking, there is no clarity on whether the downtrend has stopped,” a distributor said.

Fastmarkets’ weekly price assessment for steel wire rod (drawing quality), domestic, delivered Poland was 2,750-2,800 zloty ($676-689) per tonne on July 7, narrowing downward by 100 zloty per tonne from 2,750-2,900 zloty per tonne on June 30.

Import wire rod offers to Poland were stable to slightly higher during the week to Friday.

Notably, an Italian mill has increased offer prices by €10 ($11) per tonne, to €620 per tonne CPT for July delivery, citing rising output costs.

Sources reported offers from one Ukrainian supplier at €560-570 per tonne DAP border, which would net back to €590-600 per tonne CPT in southern Poland, stable over the week.

Another Ukrainian supplier was offering wire rod from stock at €610-615 per tonne CPT, depending on tonnage, sources said.

Limited tonnages of Moldova-origin drawing-quality wire rod were offered to Poland at €625 per tonne CPT.

Published by: Julia Bolotova

Trading in steel scrap in the global markets was limited in the week to Friday July 7 due to a lack of support from the finished steel markets.• Turkish mills make minimum deep-sea bookings due to weaker steel sales
• US deep-sea exports follow fragile Turkish rebar market downward
• Scrap prices in China rangebound due to weak fundamentals for finished steel
• Vietnam import market falls due to slow finished steel demand, weaker alternative markets
• Taiwan market bearish on lack of support from finished steel
• Indian demand also undermined by poor domestic steel sales; scrap import prices down.

Turkey
Turkish steelmakers kept their deep sea scrap buying slow in the week to July 7, amid limited sales in the country’s domestic and export markets for finished steel, sources told Fastmarkets.

The most recent deep-sea deals were heard on July 4, when a steel mill in the Marmara region booked a US cargo, comprising HMS 1&2 (85:15) at $381 per tonne, and shredded and bonus at $399 per tonne CFR. The same mill also booked a European cargo of HMS 1&2 (80:20) at $369 per tonne CFR.

Pricing history
steel scrap, HMS 1&2 (80:20 mix), Northern Europe origin, cfr Turkey.
steel scrap, HMS 1&2 (80:20), US origin, cfr Turkey.

United States
“Very weak” sentiment in the Turkish rebar market put further pressure on US deep-sea export prices to the region, which tracked incrementally lower in a fresh deal heard over the US’ Fourth of July holiday.

Pricing history
steel scrap, HMS 1&2 (80:20), export index, fob New York.
steel scrap, shredded scrap, export index, fob New York.
steel scrap, HMS 1&2 (80:20), export index, fob Los Angeles.

Vietnam
Spot prices for ferrous scrap imported into Vietnam dropped in the week to July 7 due to slow demand for finished steel products and a downtrend in alternative markets, Fastmarkets heard.

Pricing history
steel scrap, HMS 1&2 (80:20), cfr Vietnam.

China
Domestic scrap prices were steady in China over the week with demand and supply both soft. Prices for scrap imported into China were also rangebound due to thin trading. Factors such as buyers’ pessimism about near-term steel demand, and a persistent gap between bids and offers, contributed to a muted market for scrap imports.

Pricing history
steel scrap, index, heavy recycled steel materials, cfr north China.
steel scrap, index, heavy recycled steel materials, cfr east China.

Taiwan
Spot prices for containerized steel scrap imported into Taiwan dropped over the week, with market participants expecting more of a downtrend to come due to weakness in Taiwan’s finished steel market. Deal prices for US-origin containerized HMS 1&2 (80:20) fell to $365 per tonne CFR Taiwan on Thursday, from $370-375 per tonne early in the week.

Pricing history
steel scrap, HMS 1&2 (80:20 mix), US material import, cfr main port Taiwan.

India
Import prices to India dropped this week amid slow buying interest, with sources pointing to poor finished steel sales domestically. Steel sales have been poor for much of this year and, with the monsoon season having started, were not expected to to improve before September.

Pricing history
steel scrap, shredded, index, import, cfr Nhava Sheva, India.

Published by: Cem Turken, Lee Allen, Amy Hinton, Ross Yeo, Tianran Zhao

Trading remained thin in the European hot-rolled coil market on Friday July 7, with prices broadly unchanged due to a lack of demand, sources told Fastmarkets.Fastmarkets’ daily steel HRC index, domestic, exw Northern Europe was calculated at €682.00 ($743.14) per tonne on Friday, up by €0.12 per tonne from €681.88 per tonne on Thursday.

The latest calculation of the Northern European index was up by €7.90 per tonne week on week, but down by €26.13 per tonne month on month.

Buyers in the region estimated the tradable level at €670-700 per tonne EXW for September-delivery HRC.

One source reported that a mill in Central Europe was trying to push offers up to around €750 per tonne EXW on Friday, but this could not be widely confirmed by the time of publication.

Traded volumes remained limited in the region, however, amid continued sluggish demand from end users, sources said.

“Sales are slow, there are no signs of restocking in the market yet,” a mill source told Fastmarkets.

Fastmarkets calculated its corresponding daily steel HRC index, domestic, exw Italy at €662.00 per tonne on Friday, up by €3 per tonne from €659.00 per tonne the previous day.

The Italian index was up by €12.00 per tonne week on week, but down by €8.87 per tonne month on month.

Italian producers have recently been trying to increase prices, aiming for €680-700 per tonne EXW in their offers, but no deals have been done at that level because buyers are reluctant to accept higher prices when sales are so slow.

Transactions were reported at €650-660 per tonne EXW in the week to Friday, but mainly for limited tonnages and trading remained slow in the Italian HRC market, with buyers still holding back from restocking.

“[Steel service centers and] distributors are banking on a continued downtrend in the domestic and import [HRC] markets and have therefore been selling [processed HRC] downstream very aggressively,” a producer source in Italy said.

Sources said they expect buying activity to pick up in the Italian HRC market toward the end of July, when restocking takes place ahead of the summer stoppages at steel mills.

They added, however, that the restocking is likely to be limited due to looming uncertainty regarding post-holiday season demand and price trends.

HRC was on offer from a few Asian mills at €610-630 per tonne CFR Italy in the week to Friday, Fastmarkets understands, mainly for September shipment. And one Indian mill was offering HRC at €600 per tonne CFR for mid-October shipment.

The shrinking gap with domestic prices, along with the long lead times, have limited buying interest in overseas coil in recent weeks.

Published by: Julia Bolotova

Turkish merchant bar producers are seen struggling to sell in the global arena as buyers decrease their price targets each day.

On Friday, producers’ export quotes were pegged mostly at around $640-670/tonne fob Turkey for angles, $650-680/t for IPN-UPN sections, $660-690/t for flat bars, and $650-680/t for IPE sections.

Although the number of inquiries was high during last week, Turkish mills struggled to convert these into sales. This was mostly due to decreasing billet prices. Buyers further decreased their price targets as billet values continued to fall.

One Turkish merchant bar producer tells Kallanish: “While we were negotiating with European buyers, Kardemir announced lower billet prices. Although Kardemir’s prices do not represent our costs, as our previously bought higher-priced material has not yet arrived, buyers are revising their price targets based on Kardemir’s prices.”

Another producer says he received many inquiries from the Gulf Cooperation Council and the EU but failed to convert most into deals.

“Buyers’ bids are at around $620-630/t fob for angles. $635-640/t could be considered but $620/t is way too low,” says a re-roller and adds: “My previously bought billet at $555-560/t cfr has not yet arrived.”

In the billet market, the latest CIS-origin billet was concluded at $500-510/t cfr Tukey following Kardemir’s billet sales at $565-570/t ex-works on Wednesday.

Burcak Alpman Turkey

Production and registration of new cars rose again gently Germany, but is still lagging behind pre-Covid figures, says automotive association VDA in its statistics for the first half of 2023.

In June, the production level at German car plants was higher on-year for the 14th month in a row. Last month, 389,900 passenger cars rolled off production lines, 31% more than in June 2022, Kallanish hears from VDA.

In the first half of the year, a total of just over 2.2 million passenger cars were produced. This corresponds to an increase of 32% compared to the same period last year. Despite the positive trend of recent months, production remains significantly below the pre-crisis level, at 10% fewer vehicles than in the first half of 2019.

VDA president Hildegard Müller warns that the upward trend could expire going forward. “Passenger car production in Germany increased significantly in the first half, primarily due to the efforts to ease tensions in supply chains,” she says. “Looking at the overall economic situation and at new orders, we expect that the high growth rates will weaken soon, and that the high order backlog will be slowly reduced.”

Overall, new orders dropped by 9% from H1 2022, with mainly domestic orders weakening. Domestic orders in the first six months fell by 27% year-on-year. Foreign orders were down 5%.

Christian Koehl Germany

Italian welded tube prices are increasing by some €35/tonne ($38) compared to the end of June following re-rollers’ hikes at the end of last month.

The hikes are in line with higher hot rolled coil contracts in Europe. Tube prices however continue to lag behind HRC values amid uncertainty dominating the market.

Over the past ten days, tube sellers have noticed some increased confidence and better demand also from the distribution sector, which continues to grapple with weak downstream consumption. Thanks to the latest increases achieved in Italy, discounts have lowered to 36-37 points. In the coming week, re-rollers are targeting to reach 35 points and will continue to implement gradual increases, Kallanish notes.

Tube sales in July are reported to be higher than the June average despite the market remaining challenging.

European HRC producers are pushing up values and quoting in Italy at €700/t base ex-works or delivered depending on mill, client and volume. Contracts have not yet reached this level as steelmakers are also going for gradual hikes considering the market fragility.

The target to reach 35 points for tube discounts is based on HRC prices at €650/t ex-works. If in the next few days, domestic values continue to increase, re-rollers will have to target 30 points of discounts before the sector shuts down for August stoppages, sources say.

Tube producers in Europe, like steelmakers, are facing high production, financial, transport and energy costs that the market downstream refuses to absorb. Many re-rollers have reduced output to balance demand and supply.

Natalia Capra France

Italian wire rod prices are stable on-month. Both sellers and buyers however continue to report low volumes. Some sales were achieved in June but with orders being carried out back-to-back. Sellers say they are playing it by ear and are reporting persisting low visibility, Kallanish notes.

The market is missing large volumes. All distributors and drawing mills are buying one or two truckloads per week. Producers are implementing stoppages and often supplying customers from stock. Price increases have been mulled but multiple sources say in this market any price rise would not stick, and the relative price stability is already considered a success.

For July, buyers have bet on price falls, but producers aim to hold on to current levels. Steelmakers may have to face higher production costs. Scrap prices are not falling this month in Italy due to shortages. The Italian government may end the tax credit for energy-intensive sectors such as steel and scrap the exemption from electricity transport and distribution charges. As Federacciai president Antonio Gozzi warned last week, this move risks increasing electricity costs in the country by 35% for steelmakers (see Kallanish 4 July).

Wire rod producers will now consider their results for the first half of the year. Based on their margins, volumes achieved, costs and government help, they will decide on their pricing, volume and production strategy for the months to come.

While some small restocking is expected in July and longer maintenance stoppages are planned in August, all eyes are on September which is nevertheless not seen bringing back significant sales volumes. Import prices at present are at domestic levels. Italian drawing-quality wire rod remains at €570-600/t delivered, sources suggest.

Natalia Capra France

Rebar prices have begun to recover in Spain after losing more than €50/tonne ($54.4/t) since May. The rebound is thought to be a measure by mills to bolster the market before their upcoming maintenance stops, amid stagnant international demand and uncertainty in the domestic construction sector, sources tell Kallanish.

“Last week, Megasa raised its price by almost €10-15/t for 16mm rebar. It was understood that the other main market players followed this increase,” a local source explains. “Levels fell more than expected since May and we are now observing a rebound, although not expecting to recover anytime soon the €50/t that was lost,” another market participant explains. “Demand for rebar is sluggish amid the construction sector’s lower production, so the mills’ upcoming maintenance stops could explain the rise in prices.”

The general expectation is that rebar prices will go up slightly further next week. Rebar is currently being sold domestically in Spain at €325-327/t ($353.91-356.03) base. Including €262/t size extras and €23/t loading expenses, the transaction value is at €610-612/t ex-works. Some offers have also been heard at €607/t delivered for 16mm rebar.

On the other hand, the Spanish scrap market remains quiet, with most collectors saying they are expecting the last price drop observed in the international market to soon materialise in the country.

“Last week, some collectors began to offer material, although in small tonnages, at lower prices than the rest of the market players due to a lack of liquidity,” says a trader. “The market expects prices to lose strength soon, matching international levels after Spanish collectors remained on the sidelines during the last downward movement seen in Turkey,” another source observes.  

New E8 quality scrap in Spain is offered at €395/t delivered. Type E40 and demolition quality grade E3 are sold at €385/t and €370/t, respectively. Meanwhile, E1 quality stands at €345/t delivered.

Todor Kirkov Bulgaria

Romanian steel wire producer Dan Steel, based in Beclean, which has been in bankruptcy proceedings since the beginning of the year, will undergo another auction round, at a lower asking price, according to Romanian media reports.

CITR Cluj Branch, together with Prime Insolv Practice, as judicial liquidators, are organising the auction later this month. The starting price of the auction is €23 million ($25m), down from €25m and €28m in the previous auctions respectively.

CITR did not reply to Kallanish request for comment before deadline.

In April, it said its aim is to attract potential investors to bring the plant back to life, as one of the main employers of the city of Beclean (see Kallanish passim).

Dan Steel Group was active in the production of wire and wire products, with a production capacity exceeding 100,000 tonnes/year. The asset comprises over 40 hectares of land, buildings with a total usable area of ​​75,460 square meters and related equipment.

Dan Steel produces a range of carbon and galvanized steel wire, as well as welded mesh, fencing and nails. The company imported feedstock from Ukraine, Italy, Poland, Belarus and Moldova, from suppliers such as ArcelorMittal, Metinvest, Belarussian Steel Works and Moldova Steel Works. The firm’s main competitors are IS Campia Turzii, Ductil Steel Buzau, and Metalicplas. The main export markets in 2019 were Hungary and Slovakia.

In 2019, the firm suffered from weaker domestic demand compared to 2018 and had planned to increase exports to new markets after shipments abroad also declined on-year (see Kallanish passim). Production fell 26% on-year in 2022 to 31,994 tonnes.

In 2020, Dan Steel was directed into insolvency proceedings following a request from creditor Unicredit Leasing Corporation.

The company has accumulated debt of over €35m, which has created additional pressure on its financial situation.

Svetoslav Abrossimov Bulgaria

Now that the second half-year has commenced, European negotiations for long-term supply contracts valid until December remain ongoing between a number of buy- and sell-side participants.

One major regional mill tells Kallanish it concluded a number of negotiations last week, and this week expects to conclude the remainder. Other observers are not so sure that the game will be over that soon. “We have not signed yet, as we are waiting for the big buyers to go ahead and set the price, but to my knowledge this has not happened yet,” one German manager says.

In fact, none of the buyer companies contacted have concluded a deal. “At the moment, the negotiations are suspended, given that even our customers are not clear about the market,” a buyer at a processor says. “I, myself, do not have a clear idea about prices. He is however positive that prices will not be above those of the first half-year, despite mills’ initial attempts to the contrary.

One mill source basically concurs. “Generally, we have landed at rollovers, with some minor increases” in contracts that were signed “at the low end” half a year ago. Back then, the negotiation period was shaken by a massive and largely unexpected surge in spot prices. While December began with HRC hardly at €650/tonne ($704), prices surged to €750 over the course of January and then continued their way upwards.

This time, the direction is opposed, and the current price cycle is not at its beginning but nearing its end. Coincidentally, the apparent price floor is equal to that seen seven months ago, at around €650/t.

Long-term contracts traditionally include a premium of at least €100/t over the temporary spot price.

Christian Koehl Germany