Category: Latest Updates

Domestic prices for cold-rolled and hot-dipped galvanized coil in South Europe increased in the week to Feb. 1 supported by higher import offers and good order books of the European mills.

Platts assessed domestic prices of cold-rolled coil in Italy at Eur845/mt ex-works Italy, up Eur15/mt week on week.

Market participants estimated tradable values at Eur840-860/mt ex-works Italy, with offers reported at the equivalent of Eur880/mt ex-works South Europe.

Import offers for CRC in Italy were reported at Eur800-810/mt CIF Italy from India and Far East mills.

Platts assessed domestic prices of hot-dipped galvanized coil in South Europe at Eur865/mt ex-works Italy on Feb. 1, up Eur15/mt week on week.

The assessment was based on achievable prices heard at Eur850-880/mt ex-works Italy.

Domestic prices for downstream coil products were supported by good order books of the European mills. With the steelmakers having sold out the first-quarter rolling coil, they were reported to offer second-quarter production material.

In addition, the availability of CRC was seen reduced by some steelmakers in both Germany and Italy with some mills not offering the material. According to market sources, those steelmakers were focused on the production and sales of HDG material.

“The mills try to sell more coated steel, as the material has higher added value, which is normal,” a German distributor said. “And there are some new galvanizing lines running, while cold-rolling capacities were unchanged, so there is less CRC in the market.”

Platts assessed domestic prices of cold-rolled coil in Northwest Europe at Eur855/mt ex-works Ruhr on Feb. 1, up Eur5/mt day on day, but down Eur20/mt week on week.

The assessment was based on tradable values heard around Eur850-860/mt ex-works Ruhr. However, official offers of Eur880-900/mt ex-works Ruhr were deemed “unrealistic” by several market sources.

Import offers were reported at Eur830-840/mt CIF Antwerp for the material from Asia.

Platts assessed domestic prices for hot-dipped galvanized coil in the region at Eur890/mt ex-works Ruhr, down Eur35/mt week on week.

Tradable values and offers were reported at Eur850-900/mt ex-works Ruhr and Eur900-920/mt ex-works Ruhr, respectively.

The drop in the domestic prices of the CRC and HDG in the Platts assessments was caused by the absence of unrealistic high offers from mills seen in the previous week and buyers’ cautious bearish stance.

Platts is part of S&P Global Commodity Insights.

— Maria Tanatar

Italian integrated flat steel producer Acciaierie d’Italia (ADI) has confirmed its plans to boost crude steel production to 4 million mt in 2023 and to 5 million mt in 2024, the company told S&P Global Commodity Insights Feb. 1.

This is up from production of below 3 million mt in 2022, according to market participants’ estimates.

Previously market sources said the company was producing 10,000 mt/day of pig iron from the two blast furnaces.

The steelmaker also confirmed its intention to restart Blast Furnace 2 this year and to start the relining of Blast Furnace 5 in the second half of 2023.

The move follows the Ministry of Finance’s move to give a government grant of Eur680 million ($742 million) to the company, which the latter has said would be used to invest in the plant and support production capacity.

The BF5 relining is scheduled to start in the second half of 2023, while the construction of an electric arc furnace is also expected to start in H2.

“Over the years we have always maintained that without the refurbishment of the BF5 and the verticalization of the downstream systems there will be no future for the plant,” the Italian Union of Metalworkers said.

Currently ADI operates BF1 and BF4. The steelmaker idled production at BF2 in July last year in response to low demand, declining steel prices and high production costs, while 3.5 million mt/year capacity BF5 has been idled since 2015.

“We welcome the news and the willingness to revamp Furnace 5, which will be a priority for achieving the production objectives to make the site strategic at national and international level,” another industry union UGL said. “The company has also expressed its intention to operate with three kilns in the second half of 2023, arguing that if there are funds for the procurement of raw materials, it does not preclude a higher production than that declared…i.e. 4 million mt.”

However, the outlook of some market participants on the news regarding the production rise at ADI was more mixed. “We have seen a lot of plans related to restarting furnaces at Acciaierie d’Italia in the past, and they rarely materialized,” an Italian trader said.

Recently, several European steelmakers — SSAB in Finland, ArcelorMittal in Italy and US Steel Kosice in Slovakia — have resumed operations at blast furnaces idled in 2022. The return of these capacities in the market have made buyers concerned that the increased availability might put an end to the upward price trend in the EU coil market. Full order books for mills have been one of the main drivers behind flat steel price recovery, with European steelmakers selling out of rolling coil in the first quarter.

Platts, part of S&P Global Commodity Insights, assessed domestic hot-rolled coil prices in Southern Europe at Eur745/mt ex-works Italy on Jan. 31, up by Eur10/mt week on week and Eur65/mt on the month.

— Maria Tanatar

The coming two years offer a narrow but clear window of opportunity, during which action must be taken if there is to be a revitalisation of the UK steel industry through breakthrough technology, the Energy Transitions Commission (ETC) says in a report seen by Kallanish.

This is because certain UK blast furnaces will potentially require a relining investment decision as early as 2025.

To avoid “carbon lock-in” – reinvestment into existing integrated mills and preserving carbon-intensive steelmaking – or “import lock-in” – foregoing investment and turning to imports to meet demand – the UK must create conditions for investment into a route to breakthrough steel.

These conditions include effective carbon pricing on both domestic production and steel imports, lower costs associated with sourcing and processing scrap steel, a market for differentiated, higher-priced low-carbon steel, and government guarantees to de-risk new technology. Direct government funding support for breakthrough ironmaking technology would go one step further and extend the investment case to cover both iron- and steelmaking processes, ETC says.

Effective carbon pricing will be critical. The UK government is currently considering funding to support the country’s existing integrated steelmaking sites to decarbonise. Transitioning to breakthrough technology would be a good use of this funding, but not if the resulting sites remain uncompetitive with steel imports that face lower or zero carbon costs, ETC points out.

Large scrap volumes are already available in the UK, but government regulatory action is needed to make its use more affordable. Restricting scrap exports is problematic, but measures to reduce electricity costs for steelmakers would make scrap intake more economical. Lowering or waiving network charges for industrial electricity consumers is an option, like the arrangements already in place in several European countries.

The right demand signals could be achieved through an alliance of UK steel buyers, similar to the First Movers Coalition or SteelZero efforts globally, underpinned by firm volume-based commitments. “Alongside private sector demand, the power of green public procurement should not be underestimated,” ETC observes. The government should also make firm commitments to ensure a portion of its steel procurement is met with near-zero-emissions steel.

Changes to UK content rules, such as requirements that bids for public tenders include greater proportions of domestically produced steel, could add further support.

“Should the pathway of breakthrough steel be chosen, an immediate priority would be the formation of a consortium of private sector stakeholders of the steel value chain (spanning energy suppliers, iron ore miners, steelmaking equipment manufacturers, steelmakers, buyers, and finance). Coalescing around a specific breakthrough project proposal, this consortium would be well placed to set out a robust case to government and swiftly act upon policy decisions,” ETC concludes.

Adam Smith Poland

Italian plate prices are increasing in contracts following the hike attempts by local producers in January, Kallanish learns from market participants.

Plate re-rollers are now quoting and obtaining €900/tonne ($979) for the basic S275 grade and €950/t for the higher 355 grade. This is up from January levels of €850/t ex-works.

Sellers are reporting good order intake thanks to the resurfacing of apparent demand from the second half of December. January was good in terms of sales volumes thanks also to distributors’ restocking. Italian producers are quoting end-March lead times.

Domestic contracts have increased this month to €870-900/t ex-works for S275. Because of the increasing prices of slab and energy costs, plate values are expected to continue to surge to the level of €1,000/t ex-works in February.

Asian-origin slab is now offered at $750/t cfr Italy.

Natalia Capra France

Much like 2022, 2023 will be a tale of two halves for steel. The first half will stay muted due to macro woes, while the second half looks set to fare better as global economic activity revives and Chinese construction gathers pace.   

India, the US and China would be the key demand drivers in 2023.  

In this report, we draw on insight from the Steel Research Suite to set out our predictions and explore the outlook for 2023. 

This includes:  

• Are the gloomy days over for Chinese property markets?  
• Optimism grips new green metallic hubs  
• IIJA: the make or break for US steel consumption 
• and more  

European producers maintained high offers for cold-rolled and hot-dipped galvanized coil during the week to Wednesday February 1, citing good order books and limited availability, and buyers resisted higher prices due to still-slow end-user demand, sources told Fastmarkets.
Buying interest in CRC and HDG in Europe was limited during the assessment week, since buyers seemed to be digesting the recent price rises.

“End-users are not willing to accept higher prices [for CRC and HDG], so it’s ‘wait-and-see’ in the market,” a steel service center told Fastmarkets. “We are only booking what is strictly necessary.”

CRC offer prices were heard at €880-900 ($955-976) per tonne EXW, and HDG offer prices were reported at €900-930 per tonne EXW for April delivery.

European mills have gradually sold out first-quarter volumes of CRC and HDG and were therefore not hungry for orders.

Buyers reported tradeable values of €850-870 per tonne EXW for CRC and €860-900 per tonne for HDG.

Fastmarkets’ weekly price assessment for steel CRC domestic, exw Northern Europe was €860-880 per tonne on Wednesday, up by €30 per tonne from €830-850 per tonne on January 25.

Fastmarkets’ corresponding weekly price assessment for steel HDG domestic, exw Northern Europe was €870-900 per tonne on Wednesday, up by €30-40 per tonne from €840-850 per tonne on January 25.

Both assessments were a reflection of the lower end of offers, rare deals, and estimates of achievable prices made in the week to February 1.

Southern Europe
In Southern Europe, CRC offers were heard at €880 per tonne EXW, and HDG offers in the region were heard at €900 per tonne EXW.

Italy-origin CRC was offered to Germany at €900 per tonne CPT during the week, and HDG at €930 per tonne CPT.

Mills in the region reported increased numbers of inquiries from buyers during the assessment week, but traded volumes remained limited, they said, since buyers were resisting higher offers.

Notably, buyers estimated tradable values for CRC at €830-850 per tonne EXW and at €850-870 per tonne EXW.

Fastmarkets’ weekly price assessment for steel CRC domestic exw Southern Europe was €850-870 per tonne on Wednesday, up by €30-40 per tonne from €820-830 per tonne seven days before.

The corresponding weekly price assessment for steel HDG domestic exw Southern Europe was €870-880 per tonne on February 1, up by €30-40 per tonne from €830-850 per tonne seven days before.

Both assessments were a reflection of the lower end of offers, rare deals, and estimates of achievable prices made in the week to February 1.

Given the bullish sentiment in the domestic market, European buyers started to show interest in overseas bookings. Import offers, however, were limited, and most suppliers could offer April shipment at the earliest.

Late in the week to January 27, a booking of South Korea-origin CRC was heard at €820 per tonne CFR to Southern Europe. But as of January 31, offers from Southeast Asian suppliers had already been reported at €850-870 per tonne CFR

CRC with March shipment from Turkey was offered to Southern Europe at €960 per tonne CFR, according to two buyer sources. But the price was completely unworkable for the European market, sources said.

There were also few import HDG offers.

Sources reported only one offer during the assessment week, for 0.5 mm HDG from Vietnam at around €900-910 per tonne CFR.

Published by: Julia Bolotova

The semiconductor shortage continues to hamper automotive production, Kallanish notes.

Japanese auto producer Toyota’s Turkey-based subsidiary, Toyota Otomotiv A.S., will halt production at its Sakarya plant for 14 days from next week due to the chip shortage.

Maintenance and repair works will be carried out during the 14-day suspension, Turkish media reports.

On the other hand, things are still more complicated at Toyota’s Czech plant where production is set to stop for the whole of February on account of the semiconductor shortage.

Toyota Europe spokespeople did not respond to request for comment by Tuesday deadline.

The group’s 2022 output reached 9.027 million units, posting an increase of 5.2% from a year earlier. The firm said this week the future is difficult to predict because of semiconductor shortages and Covid-19.

Burcak Alpman Turkey

Sources in the French rebar sector are reporting a rather weak level of sales in January and forecasting a similar level of order intake in February, Kallanish hears.

Participants say this is part of the “new consumption normal”.

The local construction sector is going through a period of strong uncertainty and considerably lower private residential sales. The economic downturn is contributing to sluggish sales. Distributors say their clients have very low stocks but the rule today is to keep light stocks and buy only when necessary, without committing to any higher volumes.

“Demand is still there but consumers’ confidence is low and nobody wants to take a risk,” a seller says. Domestic prices are relatively stable compared to the end of January, with a few offers heard from Italian producers who are quoting prices some €20-30/tonne ($21-32) higher than French suppliers. Some offers from Spain, however, are reported in southern France, but the appetite for material remains limited.

Domestic rebar prices have lost some €40-50/t on December. Including size extras, contracts are hovering at €700-730/t delivered, sources suggest.

Natalia Capra France

French stainless steel producer Aperam is increasing its February alloy surcharges for its austenitic range of flat stainless steels for Europe. The steelmaker is pushing up 304 prices by only €30/tonne ($32) month-on-month, and more significantly for other grades such as 316 where the cost of molybdenum skyrocketed in January, Kallanish notes.

Aperam’s surcharges for grade 304 (1.4301) will increase from €2,906/t in January to €2,930/t, effective 1 February. Grade 316 will hike from €4,693/t to as much as €5,012/t this month. Grade 309S, a heat-resistant stainless steel used in high-temperature applications, will go up also significantly from €3,731/t to €4,066/t. The surcharge for the most popular ferritic grade, 409, will however decrease from €851/t to €834/t, the company reveals.

Offers for nickel cash buyers meanwhile have been volatile over the past weeks. They reached $30,420/t on 30 December and fell to $29,065/t on 27 January.

Meanwhile, Aperam applied a €879/t energy surcharge to its contracts in January, down from €901/t in December. The company is expected to publish another surcharge for February in the coming days. The energy surcharge is composed of electricity, gas costs, and CO2 emission allowance costs.

The reference for the electricity costs is the “producer price index in industrial production sold in France − CPA 35.11 and 35.14 − wholesale electricity”, reported by national institute of statistics Insee.

The reference for gas costs is also provided by Insee in its “producer price index in industrial production sold in France − CPF 35.23 − wholesale of gas, on spot markets”. The carbon emission allowance cost is based on “carbon emissions futures – EUA daily future/front December futures, daily close prices” reported by ICE. The reference period for the energy composite index is the third quarter of 2021, the company reveals.

Natalia Capra France

Turkey’s increase of customs duties on the most imported flat steel products announced over the weekend is unlikely to affect imports of lower-priced products. However, it may affect some end users’ capacity to produce at a profit, several market participants tell Kallanish.

Ankara increased import duties on steel products falling under HS codes 7208.10.00.10.00 to 7208.10.00.90.11 from 9% to 15%, except for welded pipe producers and some re-rollers, whose duties will rise from 6% to 13%. The same duty of 13% will apply to alloyed hot rolled coil under HS codes 7225.30.90.00.11 and 7225.30.90.00.19. Import duties on unalloyed cold rolled coil under HS code heading 7209 increased from 10% to 17%.

The customs duty on steel plate will increase to 15-20% from 9-15%, and on hot-dip galvanised coil, tinplate and PPGI from 15% to 20%.

Meanwhile, import duties on dynamo steel sheet remain at 6%, on stainless HRC at 2%, and on stainless CRC at 8%, Kallanish notes.

Although some Turkish steel market participants do not appear concerned about these measures, thought to have largely resulted from lobbying by domestic producers, some participants, including pipe producers, are concerned. Having been under pressure to obtain appropriately priced feedstock for the past several years, they went as far as to call on Ankara to suspend import duties for HRC altogether in summer 2021.

The Steel Pipe Manufacturers Association (Cebid) pointed out at the time the unused capacity of the industry to expand product range and exports with investments into production of higher value-added products. Instead, even with the previous duty on HRC at 9% and 6%, competitiveness was reduced by limited resources.

Others are not so concerned, citing suppliers’ ability to adjust prices to match buyers’ expectations, especially in the last year, when Russian suppliers’ export markets have been severely constrained by Western sanctions. Additionally, a majority of imports of HRC are brought in under the internal processing mechanism, when the duty is repaid back when the material is exported, they point out.

Turkish exporters of HRC have themselves been hit by not being able to sell in the European market, as their prices were unworkable, with anti-dumping duty added, in the past couple of years. Turkish mills have been lobbying for better protection of their domestic market in the past, especially since sanctions on Russia appeared to have seen the Turkish market flooded with material. Asian-origin imports have also increased significantly in the past year.

Katya Ourakova UK