Category: Latest Updates

In January 2023, the EU car market showed growth of 11.3% in new vehicle registrations compared with the corresponding month last year, reaching a total of 760,041 units, the European Automotive Manufacturers Association (Acea) said on Tuesday February 21.
But this increase was from the historic low base figure of last year, Acea added.

The positive performance was reflected in three of the region’s four key markets, with Spain showing the strongest gains at 51.4%, followed by Italy with 19.0%, and France with a more modest but still solid growth of 8.8%.

But on the other hand, Germany, the Europe’s largest car producer and consumer, recorded a decline of 2.6% in the same period.

On average, the automotive sector consumed around 40% of EU strip mill products and 2.9% of quarto plate products in 2021, according to regional steel association Eurofer. This accounted for around 16% of total steel consumption in the EU, according to the same source.

On average, a car contains 820-1,134kg of steel in the car body, chassis, engine, transmission and other components, depending on the type of vehicle and the manufacturing process, according to the World Steel Association (Worldsteel).

Passenger cars accounted for 82% of all vehicles manufactured in the EU, according to Acea.

The European steel hot-rolled coil market has been quiet recently, with prices largely flat amid a lack of trading. Most mills in Northern Europe claimed to be sold out for April-delivery coil and only able to offer May lead times.

Fastmarkets calculated its daily steel hot-rolled coil index, domestic, exw Northern Europe, at €772.26 ($825.14) per tonne on Tuesday, stable day-on-day.

This compared with an average monthly price in January 2023 of €720.36 per tonne ex-works, versus €920.41 per tonne ex-works in January 2022.

The current signs of recovery in Europe, with the exception of Germany, were foreseen by industry market participants which estimated that, despite many uncertainties ahead – including acute component shortages and lack of consumer confidence caused by the energy crisis and recession concerns – about 9.8 million new cars will be sold in the region this year, up by 5% from 2022.

This figure was, however, still 25% down from pre-Covid pandemic levels in 2019, indicating that the industry was still in a delicate position.

Published by: Elina Virchenko

The Italian distribution sector reports slow domestic demand for coils derivatives and particularly welded tubes, for which prices continue to lag behind the latest hot rolled coil price increases. Demand however is forecast to be supported by the Turkish earthquake

The disaster is causing a drastic reduction of tube volumes traded into Europe. The large northern European buyers are seen purchasing their volumes only in Europe as a consequence. This should sustain southern European re-rollers’ prices and sales, market sources say.

Some high-grade and structural tubes remain in short supply. However, for the moment Italian end-users continue to strongly oppose any reduction in the tube-making coil discounts implemented by re-rollers. Tube discounts are now at 29-30 points. Each point of discount equals €12-13/tonne ($12.7-13.8). Tube producers are pushing their prices up and trying to decrease discounts to the level of 25 points by the end of the month, Kallanish notes.

Some more sustained demand is reported for sheets, for which asking prices are also increasing. Sheet producers are asking some €900/t ex-works for hot rolled sheets with April lead time and €960/t for galvanised grades.

The distributors see prices gradually decreasing in long product markets, affected by continued slow demand, stagnation, and uncertainty. Merchant bar prices are at €910-920/t ex-works with some producers reducing output to balance demand and supply. The first category of beams has also fallen to €950-960/t ex-works while rebar values have declined to €700-720/t ex-works including extras, sources suggest.

Natalia Capra France

Liberty Galati, the largest integrated steel producer in Romania, will resume pig iron and steel making operations in full after restarting its only blast furnace in March, parent company Liberty Steel said Feb. 21.

Flat-rolled steel producer Liberty Galati will restart blast furnace No. 5 in mid-March 2023 on signs of market recovery in Europe supported by improvements in input costs and pricing.

The furnace has undergone a Eur3.67 million maintenance program since December, which has increased its safety, stability and optimized energy use, the company said.

Blast furnace No. 5 achieved 2.1 million mt hot metal output in 2021, the year when the mill also produced its 12-year record high of 2.35 million mt of steel. Liberty Galati did not disclose its Romanian site production for 2022 though.

The company is currently in the process of choosing an electric arc furnaces supplier for the Romanian mill. As part of the Eur1 billion ($1.1 billion) transformation designed to make the Galati plant carbon neutral by 2030, Liberty previously said Galati will see new hybrid EAFs replace older more polluting blast furnaces at the works by 2025.

“We’re also well underway with feasibility studies for the relocation [to Galati] of the plant and equipment from [Dongbu] Steel in South Korea,” said Ajay Aggarwal, president of Liberty Steel Europe and board chairman of Liberty Galati.

Liberty committed to purchase the Dongbu steel plant and its associated equipment from South Korean steel company, KG Steel, in November 2022. The asset comprises two modern electric arc furnaces, two thin slab continuous casters, and a hot strip mill, S&P Global reported earlier.

The company is also considering a spring restart of a blast furnace at its other Eastern European mill, according to several sources, who mentioned slab shortage as a growing issue in Europe. Liberty refused to comment on the restart.

Liberty Ostrava, its flat and long rolled steel and pipe producer in the Czech Republic, idled one of its two blast furnaces (No. 2) for a Eur9.5 million upgrade in July 2022 and continued operating the remaining No. 3 furnace and rolling mills, as S&P Global reported earlier.

— Maria Tanatar, Ekaterina Bouckley

The European Union’s Emissions Trading System (EU ETS) has experienced significant fluctuations in the carbon prices over the years.

As of February 2023, the price of carbon in the EU ETS has exceeded 100 euros per metric ton of CO2. That’s a significant increase from just a few years ago when the price was around only 10 euros per ton. 

The EU carbon price has experienced these fluctuations due to a variety of factors. These include policy changes, market forces, and global trends. 

The EU ETS is a cap-and-trade system that aims to reduce greenhouse gas emissions by putting a price on carbon. The system covers emissions from power plants, energy-intensive industries, and commercial aviation. It is one of the largest and most established carbon markets in the world.

The Drivers Behind the High EU Carbon Price

One of the main drivers of the high carbon price in the EU ETS is the region’s commitment to cut GHG emissions by at least 55% by 2030 compared to 1990 levels. This ambitious goal requires a significant emissions reduction from the energy sector, which is responsible for a large share of the EU’s emissions.

In addition, market forces have also contributed to the price increase. 

Operating on a cap-and-trade system, there’s a limited number of EU allowances available for companies to emit carbon. As the cap decreases over time, the price of allowances increases as companies are willing to pay more to meet their emissions targets.

Global trends have also played a role in the increase in EU carbon prices. There has been a growing awareness of the urgent need to address climate change.

The Future of the EU Carbon Prices

Looking ahead, the future of the EU ETS will depend on a variety of factors, including political will, technological innovation, and global trends. 

The high EU ETS carbon prices provides a powerful incentive for businesses and investors to transition to a sustainable future. However, concerns have been raised about the impact of this on consumers and businesses.

To address these concerns, the EU has implemented measures to protect vulnerable industries and consumers. These include exemptions for certain industries and measures to protect low-income households from energy poverty.

Who Buys EU ETS Offsets?

The primary buyers of EU ETS offsets are companies that have emissions reduction obligations to comply with. These companies may choose to buy offsets to meet a portion of their emissions compliance, as offsets can be less expensive than reducing emissions within their own operations.

EU ETS offsets are from projects that reduce carbon emissions in developing countries, such as renewable energy projects, energy efficiency improvements, and reforestation efforts. These projects generate carbon credits, which can be purchased and used by companies to offset a part of their footprint.

The demand for EU ETS offsets has been driven in part by the increasing ambition of the bloc’s climate targets. This has created a greater need for emissions reductions across the economy. This has further led to an increase in carbon prices and a corresponding increase in the demand for offsets.

Examples of large multinational corporations that are committed to reducing their GHG emissions and may be purchasing EU ETS offsets include companies such as Microsoft, Unilever, and Nestle. 

These companies have made public commitments to reducing their carbon footprints. And they have implemented a variety of measures to achieve these goals, including:

• purchasing renewable energy, 
• improving energy efficiency, and
• investing in emissions reduction projects.

It’s worth noting that there are a growing number of companies that are voluntarily purchasing offsets as part of their efforts to become carbon-neutral or achieve other sustainability goals. 

These companies may include those in the tech industry, such as Salesforce and Google, as well as companies in the fashion industry, such as Burberry and H&M.

The EU Emissions Trading System

The high carbon price is a reflection of the urgent need to address climate change. It also provides a powerful incentive for businesses and investors to transition to a sustainable future.

However, there are concerns about the impact of the high EU carbon prices on consumers and businesses. So, it will be important for the EU to strike a balance between achieving its climate targets and protecting vulnerable groups. 

The future of the EU ETS will depend on various factors. Thus, it will be crucial to continue to monitor its carbon price and its impact on the economy and society.

Source: carboncredits.com

Coil prices are currently climbing in northwestern Europe but some observers express doubt over the sustainability of the uptrend.

ArcelorMittal’s price announcement of €820/tonne ($877) for hot rolled coil has been followed by other mills, according to a Dutch service centre (SSC) buyer. One argument for mid-term stability is rising prices for imports from Asia, and delivery times stretching to 4-5 months, he says.

A Swiss trader, however, cautions there could be a contrary effect with imports. The low prices until December encouraged orders from India, which will arrive later in spring, along with additional volumes not yet pre-sold and free for the market, he tells Kallanish. However, if buyers in Europe are reserved because of real demand remaining shaky, the stockists of this additional material may reduce prices to shift volumes, thereby pulling down prices.

Another factor is the “comeback” of blast furnaces. “Spanish customers tell me the mills are fully booked, and of course they are, when they are running at half their capacity,” a Scandinavian trader points out. But that should soon change, given the run-up of blast furnaces at four mills since January, including Gijón, “with more material coming onto the market soon”, the SSC buyer says.

However, he also points at one previously unforeseen and macabre factor – the earthquake in Turkey/Syria and its devastating consequences. The damage to road infrastructure leading to Turkish mills and to Iskenderun port will mean inquiries are redirected to mills in other countries for material normally bought from Turkey, he says. He even believes this incident encouraged northwest European mills to go for the latest price hikes.

Christian Koehl Germany

Wuppermann Metalltechnik, a manufacturer of tubes, tube and sheet metal components in Altmünster, Austria, has expanded its plant with a new logistics hall for sheet production.

In order to optimally load and transport increased volumes, the new hall section was planned with its own truck access to the main road, Kallanish learns from the company. WMT is creating the pre-requisite space for further growth in the sheet metal processing division, it notes. “Our goal is to continue to grow here at the Altmünster site in the coming years,” says managing director Georg Wildauer. The site currently employs just under 150 people.

Despite the difficult accompanying circumstances in 2022 due to the war in Ukraine, the energy crisis and inflation, the company was able to close the 2022 business year with a good result, it says. Demand is particularly high from customers in the alternative energy generation, service machines and device industries, as well as from manufacturers of components for fully automated warehouse logistics, it notes.

Meanwhile, parent company Wuppermann Group, headquartered in Leverkusen, Germany, is re-evaluating the environmental impact of its heat-to-coat strip galvanizing process compared to the conventional cold strip galvanizing process. To that purpose, it commissioned the renowned Fraunhofer Institute for Environmental, Safety and Energy Technology (UMSICHT). The study now also includes the group’s most recent galvanizing plant at the Hungarian site.

Christian Koehl Germany

Turkish steel producers MMK Metalurji and Koç Metalurji have resumed steel production following the devastating earthquakes that hit the country on February 6, the companies said on Monday February 20.
A 7.7-magnitude earthquake struck the Pazarcik district of Kahramanmaras province early on February 6, which was followed by a 7.6-magnitude quake centered on Kahramanmaras’ Elbistan district. Several other provinces were also affected, including Adana, Adiyaman, Diyarbakir, Gaziantep, Hatay, Kilis, Malatya, Iskenderun, Osmaniye and Sanliurfa.

Steel mills in the region stopped production following the disaster.

About one third of Turkey’s total steel production capacity is located in the region affected by the earthquakes.

Flat steel producer MMK Metalurji, which is located in the Dörtyol province of Hatay and has crude steel capacity of 2.3 million tonnes per year, has restarted production, the company said on Monday.

The company produces hot-rolled coil, cold-rolled coil, hot-dipped galvanized coil and color-coated coil.

“At the first stage, the work of a continuous pickling unit and a reversing mill has been started. Their products should ensure the full capacity utilization of the MMK Group plant in Dilovasi, Kocaeli, with a continuous hot-dip galvanizing unit and a polymer coating unit,” the company said.

“At the same time, with the commissioning of the first production lines, specialists will carry out additional reinforcement of various structures at the facility and preparations for the launch of other units of the complex. The MMK Dortyol port has been operating at full capacity since last week,” the company added.

Meanwhile, Koç Metalurji, located in Osmaniye in southern Turkey, resumed trial production on February 19 and was planning to start steel production on a 12-hour-per-day shift by February 20, a company executive told Fastmarkets.

The steel producer has 1.2-million-tpy crude steel capacity and produces rebar.

Other mills in the region had not announced plans to resume production at the time of publication.

On Friday February 17, Isdemir, located in Islenderun, said it was continuing due diligence studies.

“Studies are continuing to determine the financial aspect of the damage caused by the earthquake. It is considered that the amount of the damage is not at a level that will significantly affect the financial statements of our company,” it said on Friday.

“In addition, our company’s damages due to earthquakes are covered by the insurance coverage. Process-based works at the facilities are continuing in order for our company to start production again. It is planned to restart production in a gradual and controlled manner after the mentioned works are completed,” the company said.

Iskenderun port also halted operations following the earthquakes.

Operations are expected to resume at the port in three months’ time, sources in the region told Fastmarkets.

Published by: Serife Durmus, Cem Turken

Steel, metals, and energy grouping GFG Alliance said Feb. 20 it has acquired the Italian assets of international steel manufacturing, distribution, and trading group Aartee through the 100% purchase of shares in Aartee Group Pte Limited.

News of the acquisition follows GFG Alliance’s Feb. 17 announcement that it has acquired collapsed UK steel firm Aartee Bright Bar with the intention of incorporating ABB into its Liberty Steel Group subsidiary.

The acquisition of Aartee will boost Liberty Steel Group’s presence in Italy, where it already owns Liberty Magona at Piombino, thus improving its competitive advantage in the country, GFG Alliance said in an emailed statement.

Aartee operates in Italy through Aartee Distribuzione Italia, with four processing plants in Italy, at Arcore and Graffignana—both near Milan—Quarto Inferiore, near Bologna, and Rieti. Together, the plants employ around 115 people and have a capacity of more than 160,000 mt/year of specialist steel products.

Aartee has 90% of its sales within Italy, with customers in sectors, including automotive, construction, and white goods. The acquisition will allow Liberty Steel Group “to reduce costs through synergies,” the statement said. Aartee also manages the former Ferretti International plant activities in Italy.

“Aartee Distribuzione Italia is an important part of Italy’s steel supply chain and will allow us to extend our product offering, customer base, and distribution network within Italy,” said Ajay Aggarwal, Liberty Steel Group’s European president. “I look forward to visiting the sites over the next few weeks and welcoming Aartee’s employees, with their excellence and motivation, into our group.”

Prior to running into financial issues during the coronavirus pandemic with the collapse of its major lender, UK-based Greensill Capital, in March 2021, Liberty Steel Group had made several acquisitions, including several works formerly belonging to ArcelorMittal in Europe.

In June, Liberty Steel Group reached a debt standstill agreement with Greensill Bank on debt facilities for its European business.

In November, Liberty Steel Group reported it had reached an agreement to restructure its global debt with some of its main creditors.

Following the November accord, Liberty Steel Group has resumed some merger and acquisition activity. On Nov. 25 it announced it had agreed to buy South Korea’s 3 million mt/year Dongbu steelmaking plant and associated equipment from steelmaker KG Steel, now followed by the two Aartee purchases.

Liberty Steel Group is Europe’s fourth-largest steel manufacturer, with more than 10.5 million mt of annual rolling capacity in the region, according to the company’s website.

Platts assessed hot-rolled coil in Northwest Europe at Eur790/mt ($844.12/mt) ex-works Ruhr Feb. 20, up Eur5 from Feb. 17.

— Diana Kinch

Turkey’s largest integrated long and flat steelmaker Iskenderun Demir ve Celik, or Isdemir, which suspended its production in Southeastern Turkey for due diligence studies after the Feb. 6 earthquakes, said Feb. 18 that it was aiming to restart production gradually.

“Process-based works at the facilities are continuing in order for our company to start production again,” the company said, adding that the amount of the damage is not at a level that will significantly affect the financial statements of the company.

“It is planned to restart production in a gradual and controlled manner after the works are completed,” Isdemir said in a regulatory filing to the public disclosure platform seen by S&P Global Commodity Insights.

Following the company’s statement, Isdemir equities resumed trading again at the Istanbul stock exchange Feb. 20 after a two week break due to the Feb. 16 earthquakes that hit Southeastern Turkey, where Isdemir is located.

Isdemir has the capacity to produce 5.8 million mt/year liquid steel, 3.5 million mt/year flat steel, 2.5 million mt/year billet and 600,000 mt year wire rod.

Some other Turkish steelmakers in the region, like MMK Metalurji and Koc Metalurji, also told S&P Global last week that they were aiming to restart production soon in a controlled manner.

The Turkish government’s demand from domestic producers to supply 4 million mt of rebar within four months for reconstruction works in the region accelerated the mills’ production restart efforts, according to sources.

Producer offer prices for flat steel have also risen to $800/mt ex-works and over in recent days amid higher demand and some availability issues, sources said.

Platts, part of S&P Global, assessed Turkish HRC at $800/mt ex-works Feb. 17, up 4.58% on the week.

— Cenk Can

European steelmaker ArcelorMittal plans to restart its idled 2 million mt/year blast furnace at its flat steel plant at Fos-sur-Mer in France in April, the company’s spokesman told S&P Global Commodity Insights on Feb. 20.

The steelmaker had announced the closure of the blast furnace in November 2022 in response to a negative trend which settled in the European coil market, a surge in energy costs and a rise in import volumes as well as a decline in demand.

Domestic coil prices, however, have been recovering since December 2022, driven by improved demand and reduced availability. By the start of December, distributors had finally resumed restocking after reducing inventories accumulated in the second quarter of 2022. Import offers have also moved up since then, while European steelmakers have kept production rates low and stopped some furnaces.

Platts assessed domestic hot-rolled coil prices in Northwest Europe at Eur790/mt ex-works Ruhr on Feb. 20, up Eur185/mt from Nov. 28, 2022, when they were the lowest.

ArcelorMittal operates two BFs at Fos-sur-Mer with a total capacity of 4 million mt/year. Its other blast furnace remained operating last year.

— Maria Tanatar