Category: Latest Updates

Global supplier of automotive components and composite materials, Meneta Group, has committed to utilizing low-carbon steel from Nordic and US-based steel company SSAB across its global operations, it said March 3.

As a result, the company expects to achieve annual Scope 3 emissions savings of 5,500 to 6,000 mt by 2026, which it intends to expand to 60,000 mt once low-carbon steel provided by SSAB is fully incorporated into its global operations.

“Being able to source sustainably manufactured steel for our global production sites already from 2026 ties in perfectly with Meneta’s existing market-leading role and first-mover status,” said Meneta Group CEO Kim Oestergaard.

“Our goal is to be among the first suppliers in the automotive industry to offer components and materials with significantly reduced CO2 footprints to our global customers,” he added.

Menata’s objectives are aligned with SSAB’s plans to deliver low-carbon steel at a commercial scale during 2026 and to largely eliminate carbon emissions from their own operations around 2030.

According to Menata, SSAB is developing a value chain for low carbon iron- and steel production through the use of renewable electricity and hydrogen instead of coking coal traditionally used for iron ore-based steel production.

“We are extremely happy to welcome Meneta, a forerunner within automotive brake components and sealing materials, as a partner for fossil-free steel products,” said Sales Director in SSAB Europe Jan Meier.

Platts assessed Northwest Europe hot-rolled coil at Eur820/mt ($840/mt) ex-works Ruhr March 3, up from Eur610/mt Dec. 1, 2022, according to data from S&P Global Commodity Insights.

— Euan Sadden

Market activity remained slow in the wire rod and rebar market in Northern Europe amid subdued demand levels.

Mills announced they were targeting price rises on rebar products in Northern Europe on Monday February 27. Targeted price rises were reported at €30-50 per tonne for rebar in Northern Europe.

Increasing scrap costs and expected improved demand in March have prompted producers to raise prices.

The market has not digested price increases, Fastmarkets heard, and the response has been low demand. It remains to be seen whether the market will eventually accept the rise in prices.

The market was not reported to be trading at these increased prices. Prices were also not reported to have changed since last week. As a result, prices remained unchanged in the Northern European longs market.

Fastmarkets’ weekly price assessment for steel reinforcing bar (rebar) domestic, delivered Northern Europe, was €710-730 ($754-775) per tonne on Wednesday, stable week-on-week.

Market activity remained slow in the Northern European rebar market in the week to March 1.

“The mills announced increases, but it isn’t clear whether these prices will be sustainable,” a buyer source said.

“What is clear is that prices are not going to drop any lower. Reduced imports because of Turkey being out of the market and non-competitive import prices means there is increased appetite for domestic stock. We are heading into the warmer months and March normally is a good month in terms of demand,” they added.

However, other market participants were less optimistic.

“Scrap prices are rising so we expect prices to start growing, and producers are united in saying they will raise prices,” a producer source said.

“However, I don’t see demand growing at this moment. The market is currently unchanged,” they added.

International scrap prices, which have been on the rise since December 2022, affect all long steel product prices, which have risen since mid-February.

“Scrap prices are increasing, and the wire rod producers are worried about how high they will go,” a producer source said.

“Customers are asking for rollovers of the same price of February. Whilst presently we are accepting orders at this level, we are going to increase prices based on rising scrap prices,” they added.

Fastmarkets’ daily calculation of the index for steel scrap HMS 1&2 (80:20 mix), North Europe origin, cfr Turkey was $445.00 per tonne on March 1, up from $436.12 per tonne last week.

Market fundamentals remained unchanged in the Northern wire rod market amid weak demand.

Fastmarkets’ weekly price assessment for steel wire rod (mesh quality), domestic, delivered Northern Europe, was €680-720 per tonne, down by €10 per tonne from €690-720 per tonne week on week.

Mills will either keep prices stable in March or target a small price increase, Fastmarkets heard.

Published by: India-Inés Levy

3 Mar 2023

Most flat steel prices in Turkey increased in the week to Friday, March 3, in line with strong demand and limited supplies, sources told Fastmarkets.Flat steel prices have been increasing since two earthquakes struck the Kahramanmaras region of Turkey on Monday, February 6.

10 cities in the region were affected and the port at Iskenderun was damaged.

The biggest steel producer in the region, Iskenderun Iron & Steel (Isdemir) has still not resumed production, but Koç Metalurji and MMK Metalurji have announced they have restarted steel production.

Because of limited steel supplies in the country, sources said, the Turkish government postponed the introduction of higher import duties on flat steel products until April 1, 2023.

Turkish steelmakers had a meeting with the country’s Ministry of Trade to discuss the steel supply plan for reconstruction of the earthquake-affected cities on March 2.

Led by the deputy minister of trade, Ö Volkan Agar, the main topic of the meeting was the need for about 5 million tonnes of steel for reconstruction of the region over the course of the next year. Another meeting will be held by the Ministry of Trade on Tuesday March 7.

Domestic prices
Fastmarkets’ weekly price assessment for steel hot-rolled coil, domestic, exw Turkey was $820-860 per tonne on March 3, rising from $800-850 per tonne on February 24.

Turkish HRC producers were offering the product at $800-870 per tonne ex-works for June production during the week, compared with offers at $800-860 per tonne ex-works last week.

Only one Turkish producer was offering HRC toward the end of the week, while other mills had stopped taking orders, sources said.

The weekly price assessment for steel cold-rolled coil, domestic, exw Turkey was $1,000-1,050 per tonne on Friday, unchanged week-on-week.

Turkish CRC producers were offering the product with 1mm thickness at $1,000-1,050 per tonne ex-works during the past seven days.

HRC exports
The export market for Turkish HRC was slow during the past seven days because producers focused on meeting local demand.

Offers were at $820-830 per tonne FOB for HRC.

As a result, Fastmarkets’ weekly price assessment for steel HRC, export, fob main port Turkey was $820-830 per tonne on March 3, rising from $810-820 per tonne on February 24.

Import prices
China sold HRC at $710 per tonne CFR Turkey for late April shipping and increased its offer price to $725-730 per tonne CFR Turkey for May shipping.

Russia sold HRC at $770 per tonne CFR Turkey. Egypt sold over 30,000 tonnes of HRC to Turkey at $800-810 per tonne CFR during the week.

Russia`s NLMK did not offer any new quantities of HRC for May shipment in the week to Friday, but the company is planning to offer material at about $815-820 per tonne CFR Turkey, sources said.

Fastmarkets’ weekly price assessment for steel HRC, import, cfr main port Turkey was $710-800 per tonne on Friday, rising from $690-760 per tonne on February 24.

China CRC was on offer at $790 per tonne CFR.

Market participants indicated that Russian CRC offers would be about $880 per tonne CFR, an increase in line with HRC prices.

Fastmarkets’ weekly price assessment for steel CRC import, CFR main port Turkey was $790-880 per tonne on March 3, rising from $800-850 per tonne on February 24.

Published by: Serife Durmus

3 Mar 2023

Domestic prices for hot-rolled coil in Northwest Europe increased March 3, supported by limited availability from both domestic and overseas suppliers.

Some steelmakers have withdrawn offers from the market and were expected to return with higher offers at the start of next week, sources said.

“ArcelorMittal and Tata Steel have withdrawn offers on Thursday, and we will see higher prices next week,” a German service center source said. “It seems that offers for HRC will move up by another Eur20/mt to Eur860/mt delivered Germany.”

In the meantime, deals for the material have been reported at Eur810-830/mt ex-works Ruhr. Market participants estimated tradable values within the same range.

Platts assessed domestic prices for hot-rolled coil in Northwest Europe up by Eur15/mt on day to Eur820/mt ex-works Ruhr March 3.

The price increase has been supported by European mills’ solid order books, limited availability, long lead times for imports and an anticipated restocking revival.

European mills have been offering May-June delivery HRC. Some steelmakers in Northwest Europe have had limited volumes to offer due to technical issues at the plants, and a steelmaker in Italy has been reported to focus on sales of non-commodity grade coil.

The mills and majority of market sources expect that distributors would start restocking soon as they have been holding back from purchases of bigger volumes of coil since mid-January.

Import offers of HRC with delivery in late July-August have only been available from Asia at Eur750-790/mt CIF Antwerp. Offers from Turkey have been absent after the February’s earthquakes.

Platts assessed import prices for hot-rolled coil in Northwest Europe up Eur10/mt day on day to Eur760/mt CIF Antwerp.

The main challenge to the bullish mood in the European market remained end-user resistance to higher prices.

“Distributors struggle to transfer price rises to their customers,” a mill source said. “End-users see that there is little ground for demand recovery and, therefore, no good reasons for the price rise.”

Platts is part of S&P Global Commodity Insights.

— Maria Tanatar

EUROMETAL organized last Thursday a Workshop on the supply chain for metals, together with the Luxembourg Center for Logistics & Supply Chain Management (LCL) and the University of Luxembourg.

This unusual event brought together the academic world and the industrial world with a view to awakening students’ interest in the problems and challenges of our sector.

EUROMETAL President Fernando Espada explained the role played by Stockholding and SSC distribution in the steel supply chain and the market shares of both compared to direct deliveries from the mills.

The workshop proceeded with a presentation on Emission allowance trading by prof. dr. Nils Löhndorf from the LCL and an Arcelormittal presentation on logistics in supplying industrial units with raw materials and shipments of finished products by Functional Head Transport & Logistics Flat Europe manager, David De Rocker.

The second session started with a CFL Multimodal presentation on seamless and sustainable mode of transport across Europe, uttered by ​Chief Commercial Officer, Sven Löffler. This was followed by the ​challenges related to the transport of metals by road and waterways presented by Gilles Braquet, Head of Operations at Luxport and Deputy Managing Director at Lorang.

​Sustainability in transport and logistics were also addressed by Luc Haesaerts from Haesaerts Intermodal that has presented us with concrete results based on ecological investments over the last 5 years.

The workshop was concluded with presentation by prof. Benny Mantin of an ongoing study being prepared by LCL for the Luxembourg Ministry of Economy entitled Etude Risk 2050. This study seeks to analyze the vulnerability of the national economy to physical risks like climate change, resource scarcity and biodiversity loss.

The interactions during and after the presentations demonstrated the value and interest of the workshop and also the need to share good practices and information between the different players in the supply chain. Especially at a time when we all have to paddle towards decarbonisation, with all the challenges that this will entail.

This event would not have been possible without the support of our sponsor Marinho Steel Trading, but also the Luxembourg Center for Logistics & Supply Chain Management and the University of Luxembourg who welcomed us in their facilities on Campus Kirchberg.

Freight rates have fallen sharply so far in 2023. After a golden time for the shipping industry, we have seen a progressive weakening of freight rates throughout the past year as congestion eased and global economic growth slowed. Shipping firms did not begin 2023 with much optimism. Prices continued to fall in early 2023, reflecting disruptions to commodity production caused by bad weather and the seasonal Chinese New Year slowdown. The Baltic Dry Index (BDI) decreased 56% from the beginning of January to 21 February to reach the lowest level in over two and a half years (Figure 1, right-hand side).

The decline in earnings across the market is notable. Time charter rates underline the current weakness of the market. A one-year time charter on a Capesize ship in 2022 Q1 would have earned owners $28,000 /day, whereas for 2023 Q1 the Maritime Forecasting and Strategic Advisory (MSI) forecasts $16,000 /day (Figure 1, left-hand side).

We expect a modest recovery in 2023 H2

The question now is whether rates are set to continue this downward trend. As weather problems fade and Chinese economic growth rises, demand should improve from the very weak levels in January and February. However, broader fundamentals do not look strong for 2023. Despite the global slowdown, MSI expects modest growth of 1.8% y/y in cargo volumes this year, following a steady trade outlook for iron ore and a positive outlook for minor bulks. Improved fleet efficiency will, however, translate this into a fall of 1% y/y in deadweight tonnage demand for dry bulk shipping. This means ships will carry more cargo tonnes per deadweight tonnage. At the same time, supply is expected to increase by 3% y/y. Although demolitions are set to grow from their low level in 2022, this year will bring another influx (~30 MDwt) of newly built ships. The net effect from fleet growth and deadweight tonnage demand reduction is a 32.5 MDwt increase in fleet supply.

Demand will partly depend on the nature of recovery in China. Previous surges in Chinese growth – for example after the 2008-09 financial crisis – have been driven by commodity-intensive investment spending. If this recovery is led by consumer spending, particularly on services, it will create less demand for dry bulk freight.

The outlook is rather conservative in the coming quarters. MSI forecasts modest improvements in average rates for the four dry bulk vessel segments towards 2023 H2 as temporary factors such as unfavourable weather fade. The Forward Freight Agreement (FFA) curve shows Capesize rates will improve in 2023 H2, standing as of market close at ~$18,625 /day for 2023 Q3 and $18,275 /day for 2023 Q4, up from $13,600 /day for 2023 Q2.Given the supply-demand fundamentals, however, there is little chance of a return to the high rates of 2021-22.

The container shipping sector outlook for 2023 does not look strong either. Fleet growth is expected to accelerate markedly. The orderbook of newbuild container ships, expected to be delivered between this year and 2027, is equivalent to about one-quarter of the existing carrying capacity, according to Drewry. A combination of sluggish demand and a sharp increase in vessel delivery will likely challenge the container freight market in 2023.

ArcelorMittal and Kirchhoff Automotive have signed a memorandum of understanding to develop low carbon-emissions steel for cars and trucks, the steel company said March 2.

The agreement will help expand the use of low carbon-emissions steel in highly engineered vehicle parts, ArcelorMittal Europe-Flat Products Vice President Yves Koeberlé said.

The agreement covers a project to test the use of ArcelorMittal’s Usibor1500 — a hot formed grade intended for use in automobile structural and safety components, which is made with recycled steel and 100% renewable electricity — in the high-strength parts that Kirchhoff Automotive supplies to original equipment manufacturers, or OEMs, in Europe, Asia and North America.

Usibor1500 is part of ArcelorMittal’s XCarb brand, which is an umbrella term for reduced, low- and zero-carbon steels. The XCarb product family is set to expand as ArcelorMittal invests in the decarbonization of its steelmaking operations across Europe in line with its target to reduce CO2 emissions by 35% by 2030, and to reach carbon neutrality by 2050.

ArcelorMittal’s Europe Flat Products division began manufacturing XCarb recycled and renewably produced steel at its Sestao plant in Spain more than a year ago, marking a new chapter in flat rolled steel production, which allows customers to buy steel with a reduced carbon impact.

On a life cycle basis, Usibor1500 with XCarb substrate has a 70% lower CO2 footprint compared with the same product made via a conventional blast furnace production process, the steel company said.

“The future use of low carbon-emissions steel will enable us to make production significantly more sustainable, as 90% of our carbon footprint is currently determined by the use of conventionally produced steel and aluminium,” according to a statement by Kirchhoff Automotive CEO Wolfgang Kirchhoff.

Kirchhoff Automotive, through its 27 plants, is present in 11 countries across Europe, Asia and North America. It supplies metal and hybrid structures for the body-in-white stage of vehicle assembly and for chassis.

The company began determining the sources of greenhouse gas emissions in its supply chain (Scope 3) last year, both upstream with suppliers and downstream with customers, and is addressing them partly through projects and partnerships like this one with ArcelorMittal.

— Ekaterina Bouckley

German steel market participants held bullish expectations for prices over March, data from S&P Global Commodity Insights’ monthly steel sentiment survey showed.

The March index for market sentiment stood at 75 points, with both distributors and producers scoring equally on the sentiment index. This is a large increase from February’s average of 54 points, indicating bullish expectations for the weeks to come.

“The market is cautiously positive, mills have the upper hand in pricing as they have full order books — sold out until June delivery,” a trader said. “Import offers are limited and only available for August. European mills claim that there will be restocking soon.”

Indeed, with the market now feeling the effects of widespread production cuts in the latter half of 2022, many attribute increasing prices to strong orderbooks and the anticipation of supportive demand, pushing delivery periods into June for the majority of European flat steelmakers.

“Expectations are that the prices [for coil] will be gradually moving up, without any major price jumps,” a service center source said. “European mills do not perceive all the import as a threat, the general feedback is positive with some rebound expected — no downward pressure in the coming week.

“There are no alternatives but to buy in the EU for shorter lead times.”

The lack of competitive import offers give European mills greater power in the market, with the limited offers available only from Asian origins for August delivery.

Evidencing these sentiments, leading steelmaker ArcelorMittal announced price increases across Europe for March trading, with other producers expected to follow the uptrend.

Supply and demand

Amid the likelihood of higher prices, respondents also expected an increase in inventory levels, suggestive of near-term distributor restocking.

The index for inventory sentiment averaged around 59 points for March, with distributors and producers scoring 62.5 and 56.25, respectively.

This is the first time the inventory index has scored above 50 points this year, indicating greater confidence that inventories are reaching critical levels, especially on behalf of producers.

“It seems that the buyers would need to restock in a couple of weeks and then the prices will rise,” a European steelmaker said.

“The last large volume bookings were in January, and since then buyers did not restock,” a German service center said. “They will have to book big volumes in the coming weeks.”

Steelmakers recently announced a spate of restarts across the European market, bringing capacities back online in the context of recovering demand.

The March index for production sentiment mirrored the inventory index, averaging 59 points on the same producer-distributor scores.

Most expected a slight increase, or stability of production, but the restart of some idled furnaces in March-April is not expected to have an immediate impact on supply and prices, according to market participants.

“It takes time for the mills to restart furnaces, and that’s if they do all restart,” a trader said. “If we do see restarts in March-April then additional volumes won’t hit the market until June-July.”

Platts is part of S&P Global Commodity Insights.

— Benjamin Steven, Maria Tanatar, Rabia Arif

The Turkish Trade Ministry and steelmakers, which held a meeting at the ministry March 2 about steel supply for reconstruction projects in earthquake-affected regions, have reached an agreement on establishing a price control mechanism to prevent speculation.

According to an information note from steelmakers seen by S&P Global Commodity Insights, the housing development administration of Turkey is planning to build 350,000 houses in the region within a year.

This will require 5 million mt of steel products, including 3 million mt of rebar, 750,000 mt of wire rod, and 1.25 million mt of sheet metal, according to calculations done at the meeting.

This could easily be met by the domestic market, steelmakers said, although they also brought up the increase in raw material and product prices in the post-earthquake period.

“By detailing the cost items in the production phase, attention has been drawn to the share of raw materials and energy in costs, and our producers have promised that no increase will be made in rebar prices, except for fluctuations in raw material prices,” they said.

Demand for steel for reconstruction projects has seen imported billet and scrap prices rise in recent weeks.

Platts, part of S&P Global, assessed Turkish imports of premium heavy melting scrap 1/2 (80:20) at $452.50/mt CFR March 1, $27.50 above Feb. 1, while its CIS export billet assessment was at $617.50/mt FOB Black Sea, up from $560/mt CFR Feb. 1.

“An agreement was also reached at the meeting on preventing speculative steps that may arise from sellers other than manufacturers and providing a price control mechanism,” producers said in the note.

The steel quantities needed for reconstruction projects could be obtained by producer organizations by prioritizing the domestic market, as in the case of containers, the producers noted.

Another meeting will be held at the Ministry of Commerce March 7 to establish a similar system for rebar supply, as in the case of container production, or to discuss and clarify other applications that could be created, according to the note.

— Viral Shah, Cenk Can

The EU steel industry is on track to achieving its decarbonization goals supported by new mechanisms like the Emissions Trading System (ETS) and the Carbon Border Adjustment Mechanism (CBAM), according to Primetals Technologies’ head of green steel.

“The politicians have finally recognized that the steel sector is one of the most important ones to transition to green production if we want to see the pledged CO2 reduction levels in the EU,” Dr. Alexander Fleischanderl told S&P Global Commodity Insights on Feb. 28.

According to the European Commission, carbon emissions and energy use in European steel production have been halved since 1960, and the sector has the ambition to further achieve cuts of between 80-95% by 2050, compared to 1990 levels.

Fleischanderl highlighted the importance of EU funding regulations like the Clean Steel Partnership (CSP) and Carbon Contracts for Difference (CCfD) alongside the adoption of low-carbon steel labelling and the creation of a premium price segment to enable the steel industry to make a successful transition to low-carbon production practices.

In addition, he noted that there have been numerous public decarbonization commitments from leading steel producers such as ArcelorMittal, Thyssenkrupp Steel Europe, and Salzgitter in recent weeks, with the industry clearly moving from pledges to execution.

“Green steel is currently the main facilitator in Europe as most of the established steel producers are now looking for electric arc furnaces, direct reduction plants and other technologies enabling them to reduce their CO2 footprint,” said Fleischanderl.

“This makes Primetals Technologies confident that the EU steel sector will achieve the targets,” he added.

According to the Fleischanderl, demand for low-carbon steel remains limited, accounting for around 1% of the global market, due in large part to ongoing ambiguity surrounding the definition of “green steel”.

The question of how to classify different categories of steel based on carbon emissions is currently being decided under the lead of the European Steel Technology Platform and the European Steel Association, or Eurofer.

According to Fleischanderl, the EU system for categorizing green steel will most likely be determined by scrap content.

“Green steel will likely be classified with the label A, and the threshold value for the carbon footprint will depend on the so called “sliding scale” principle, which means the more scrap used as secondary raw material, the lower the threshold value,” he said.

Fleischanderl said the goal is to eventually create a premium price segment for the green steel label to offset the higher production costs arising from investing in new low-carbon technologies based on renewable electricity and hydrogen.

“The expectation is that green steel will outperform the market, and the public purchasing side could become an accelerator through the construction of green rails, bridges, buildings, etc,” he said.

On existing steel demand, Fleischanderl said that sales in Europe were “fairly high”, particularly to the automotive sector, with demand expected to remain high for the remainder of 2023.

Platts, part of S&P Global Commodity Insights, assessed domestic prices for hot-rolled coil in Northwest Europe stable at Eur805/mt ($859/mt) EXW Ruhr Feb. 28, up 33.0% from a two-year low of Eur605/mt on Nov. 24.

— Euan Sadden