Category: Latest Updates

Turkey’s vehicle output increased 5% year on year to 1.08 million units over January-October despite temporary output cuts caused by microchip supply problems and revision works, showed the latest Turkish Automotive Manufacturers’ Association, or OSD, data published Nov. 12.

Turkey’s passenger car production fell 0.3% year on year to 633,369 units in the nine-month period, while commercial vehicle production increased by 12.6% on the year to 443,496 units.

Turkey’s vehicle exports rose 2.7% on the year to 779,317 units, while domestic sales declined 3.7% to 618,723 units, the data showed.

Turkish automakers have revised year-end export targets down by 30,000-40,000 units to around 1 million units, due to lower European demand expectations amid a recession risk, OSD Chairman Cengiz Eroldu said, adding that high special consumption tax on automobiles had a negative effect on domestic sales.

High inflation rates and climbing input costs, such as for energy, increased Turkey’s automobile prices in 2022.

Turkish HRC prices exceeded $1,200/mt mid-March, but have since declined on low demand and cheaper import offers. Platts, part of S&P Global Commodity Insights, assessed Turkish HRC at $655/mt ex-works Nov. 11.

— Cenk Can

Barrett Steel plans to build a 200,000-square-feet dedicated steel distribution centre at its Groveport site in North Lincolnshire, supported by additional investment from PD Ports to double the size of its dedicated transport fleet on the Humber, the port operator says.

The £10 million ($11.8m) facility will support the expansion of Barrett’s footprint on the estuary and also strengthen the distributor’s national distribution network and allow for just-in-time deliveries to be made across the UK.

Groveport, a 190-acre site and the largest in PD Ports’ Humber Cluster, has continued to act as a central steel distribution hub for Barrett Steel and serves as the ideal location for the new facility, PD Ports observes.

“The new Barrett Steel facility is a huge milestone for PD Ports at Groveport. This marks the largest single piece of investment in the site since we first acquired it back in 2015 and demonstrates our intentions to position Groveport as the UK’s leading steel handling hub for steel sourced both domestically and internationally,” PD Ports chief commercial officer Geoff Lippitt says in a note seen by Kallanish.

The warehouse will be the first building in the UK to be constructed using ArcelorMittal’s “XCarb” steel and is primed to be upgraded with the addition of solar panels in the future, the firm concludes.

Adam Smith Poland

ArcelorMittal says it is finishing the €10 million ($10m) upgrade of galvanizing line No.1 at its Avilés plant in Spain, Kallanish learns from the company.

The project includes the implementation of technology for the manufacture of “Magnelis”, the firm’s product with anti-corrosion metallic coating. The plant has already been producing this at galvanizing line No.2 since 2017.

“ArcelorMittal estimates it could end the upgrade of galvanizing line No. 1 for the manufacture of Magnelis as from January 2023,” the company explains. The new corrosion resistance steel products, whose characteristic is a composition coating with a higher content of aluminium and magnesium, will be in thicknesses of 2mm and 3.5 mm, something that is not feasible at line No2.

ArcelorMittal thus expects to meet most demand for Magnelis in the Iberian market. This specific product is manly supplied to the solar energy sector for the construction of photovoltaic park infrastructures. Magnelis offers a substantially lower environmental impact than that of alternative materials, ArcelorMittal claims.

Todor Kirkov Bulgaria

Benteler Steel/Tube says it has succeeded in producing seamless tube from free-cutting steel for the first time, Kallanish hears from the company.

Free-cutting steel has been used for a long time as a solid material, mostly in the form of steel bar in the machining industry. Its high sulphur concentration offers advantages in machining operations such as turning, milling or drilling, with better chip formation and longer tool life.

Benteler claims that its proprietary product Benteler Smartcut combines the advantages of highly machinable free-cutting steels with the geometry advantages of a tube and thus optimises machining. The product line of seamless steel tubes in hot-rolled as well as cold-drawn types offers optimised solutions for various applications. In this way, economical machining can be realised for both smaller and larger quantities, the company says.

“Due to its material properties, Benteler Smartcut offers greatly improved, short chip formation,” says sales director says Jan Schwarzer. “The material concept enables faster machining and, as a result of the stable process, also automated machining, which can reduce costs by up to 40%.”

Christian Koehl Germany

The newly-built hot-dip galvanizing line No.3 at Salzgitter has achieved operational readiness since last month, Kallanish hears from the German steelmaker.

The new production plant with an annual capacity of 500,000 tonnes supplements the two existing hot-dip galvanizing lines. It will shortly be producing high- and ultra-high-strength steels for vehicle body and chassis applications, and for the domestic appliances sector, in applications such as sophisticated surface components, Salzgitter states.

The line will produce sheet with thicknesses of 0.7-2.5mm, in widths of 900-1,700mm. The coils of strip will have a maximum weight of 32 tonnes. This is Salzgitter Group’s largest single investment of the past ten years, with around €200 million ($206m) spent on the complex, built by SMS.

“Even as planning and construction stages progressed, we were already engaged in close discussions with our customers regarding material concepts. The ramp-up phase is now in full swing,” says Michael Brühl, operations director for cold rolled products at Salzgitter Flachstahl, the group’s strip making unit.

Only one month ago, Germany’s other big national steelmaker, thyssenkrupp, inaugurated a new galvanizing line with an annual capacity of 600,000t. Market players have long made Kallanish aware of this foreseeable jump in capacity, noting that it will likely affect pricing of hot-dip galvanized coil.

Christian Koehl Germany

European hot-rolled coil buyers were testing the market with inquiries and questioning the price floor, Fastmarkets heard on Tuesday November 15.
Fastmarkets calculated its daily steel HRC index, domestic, ex-works Northern Europe, at €630.00 ($650.31) per tonne on November 15, down by €11.25 per tonne from €641.25 per tonne on November 14.

The latest calculation of the index was down by €20.00 per tonne week on week and down by €70.00 per tonne month on month.

Producer sources reported indications of achievable prices at €640-650 per tonne EXW for December rolling coil.

At the same time, several distributors reported sales in the region at €620-630 per tonne EXW.

Also, transactions for small tonnages of Italy-origin HRC were heard at €650-670 per tonne delivered to Germany.

Producer sources said that they heard an increased number of inquiries from buyers this week for HRC with January delivery dates.

“Buyers are testing the market. Normally, they would have been restocking for [first-quarter] volumes now, but there is lack of clarity on whether the [HRC] prices have touched the floor,” a mill source told Fastmarkets.

A distributor in the region said that the levels of HRC inventory at some buyers were starting to reduce.

But two big steel service centers reported having sufficient levels of inventory.

Most mills in Northern Europe still have December-rolling HRC to sell. Offers for January production have yet to be announced, but several mills said that they would target at least €700 per tonne EXW.

In general, sources were not ruling out further downward price corrections for fourth-quarter-production HRC, because order books at producers were thin.

Fastmarkets’ calculation of its daily steel HRC index, domestic, exw Italy, was €620.63 per tonne on November 15, up by €0.63 per tonne from €620 per tonne the previous day.

The latest calculation of the Italian index was down by €40.75 per tonne week on week and down by €79.37 per tonne month on month.

Trading was also slow in Italy’s market, sources said.

Offers from local mills were reported at €630-650 per tonne delivered, which would net back to €610-630 per tonne EXW, sources said. The lower end, however, was not widely confirmed by mill sources.

Alternatively, several buyers reported a transaction at €620 per tonne delivered (€600 per tonne EXW).

Import HRC offers from Japan and South Korea were heard at €570-590 per tonne cfr. Southeast Asian suppliers could offer material for January shipment.

Despite the attractive price, the demand for import coil was limited by safeguard risks and long lead times.

“European buyers largely prefer to secure [HRC] tonnages at home,” a distributor source said, “considering the unpredictability of the market.”

The complimentary Fastmarkets webinar “European Flat Steel in 2022” will take place at 10am UK time on November 22.

Stainless steel distributors have started restocking in recent weeks, but prices have remained flat amid persistently slow real demand, Fastmarkets heard during the week to Friday November 11.
Fastmarkets’ weekly price assessment for stainless steel cold-rolled sheet 2mm grade 304 transaction domestic, delivered North Europe was €3,200-3,400 ($3,312-3,519) per tonne on Friday , unchanged week on week.

Significant restocking has not been happening since around May because of bloated inventories that can be traced to the initial weeks of the war in Ukraine.

Amid the disruption to supply chains at the start of the war and the accompanying price jump, distributors built up stocks as much as possible to secure volumes and lock in prices before they climbed any further.

But demand then crashed and until recently, these high inventories and poor real demand have weighed on the market to the extent that most European stainless mills have initiated some degree of production cuts.

While end-user demand has not changed significantly, distributors have begun to restock in November, indicating that inventories have been largely cleared.

The restocking has not involved large tonnages, however, and the increased demand from distributors has not had any effect on prices.

Real demand is expected to remain at current levels until 2023, and perhaps even for the first half of the year.

It was heard, but no not confirmed, that one European mill was planning to undertake extra melting in December in preparation for a significant shutdown in March.

Published by: Ross Yeo

Persistent oversupply has continued to limit trading activity in the European hot-rolled coil market, sources told Fastmarkets on Monday November 14.Fastmarkets calculated its daily steel HRC index, domestic, ex-works Northern Europe at €641.25 ($663.69) per tonne on Monday, down by €3.75 per tonne from €645 per tonne on Friday.

The latest calculation of the index was down by €9.17 per tonne week on week and down by €58.75 per tonne month on month.

Several distributors in the region reported tradeable values for HRC at €630-640 per tonne EXW, and even €620 per tonne EXW in some cases.

Local integrated mills reported higher price levels at €650 per tonne EXW.

Most producers in the region were still able to offer December rolling coil and were holding back from offering January production.

“It is not a question of price; it is a question of demand. Until demand recovers, it makes no sense to talk about price,” a mill source said. “We can keep lowering  prices, but it won’t help to increase sales, because buyers don’t need [HRC],” he added.

Buyers, meanwhile, continued to hold back from trading, making only hand-to-mouth purchases to cover urgent needs.

Distributors and steel service centers were focused on reducing their inventories before the end of the year.

As a result, sources said they expect more price drops before the year ends.

Fastmarkets’ calculation of its daily steel HRC index, domestic, exw Italy was €620 per tonne on Monday, down by €5 per tonne from €625 per tonne on Friday.

The latest calculation of the Italian index was down by €46.25 per tonne week on week and down by €80 per tonne month on month.

HRC offers from local mills were reported at €630-640 per tonne delivered on Monday, which nets back to €610-620 per tonne EXW, sources said.

Italian mills adjusted offers downward late in the previous week in the face of low demand and import pressure, but it did not help to spur buying activity, sources said.

Italian mills were reportedly still able to offer HRC with December delivery to the market, which indicated they may be having difficulty filling their order books.

Import HRC offers from Southeast Asia were heard at €570-590 per tonne cfr, unchanged from Friday.

Published by: Julia Bolotova

Spain-headquartered steelworks dust processor Befesa has announced that it plans to invest around €500 million ($510.8m) in projects to capture the growing opportunities that the decarbonisation and electric vehicle trends are generating in the steel and aluminium industries.

The 5-year Sustainable Global Growth Plan (SGGP) will enable the company to add between €125-155m to Ebitda, it claims.

“Our investments will support electric arc furnace (EAF) steel production growth, triggering increased residues recycling volume in the markets where Befesa operates,” the company says. ”As a clear enabler of the transition to a low-carbon economy, we are well positioned to seize these significant growth opportunities by expanding our recycling capacity.”

The SGGP involves nine projects across Europe, the US and China. These include the upgrade of facilities, growing their capacities, as well as the building of new plants in existing markets and expansion of activities in China.

Befesa expects to present the SGGP in Q4 2022, Kallanish notes.

Todor Kirkov Bulgaria

ArcelorMittal Europe saw steel shipments slashed by 6% and 11% on-year and on-quarter respectively in the third quarter to 7.08 million tonnes due to weaker demand, Kallanish notes.

Crude steel production was down 12% on-year to 8mt due to significantly lower apparent demand and curtailed production in light of higher energy prices. It was also down 3% on-quarter.

Given the weaker macroeconomic conditions and order book, high energy and carbon costs and rising imports, the company announced further, more significant, production curtailments commencing in Q4 – in France, Spain, Germany and Poland. These are designed to bring supply in line with addressable demand, it says.

The European unit reduced gas consumption by 30% in Q3. It says that at current spot levels, natural gas cost per tonne is expected to be lower in Q4.

The firm notes European spot hot rolled coil prices not covering the fixed costs of marginal producers. The impact of destocking in Europe is significant, particularly in the second half of the year, and expected to lead to a contraction of apparent consumption by up to 7% in 2022.

The reduced shipments contributed to a drop of 5% and 20% on-year and on-quarter respectively in Q3 sales to $10.69 billion, while operating income was only $158 million versus $1.93 billion in Q3 2021 and $2.06 billion in Q2 2022.

Ebitda plunged 61% on-quarter to $931m due to the impacts of lower steel shipments, negative price-cost effect, higher energy costs (approximately $0.3 billion higher compared to Q2, with higher market prices partially offset by hedges in place) and negative forex translation impact ($0.1 billion). It was also down 58% on-year.

Average steel selling price fell 11% on-quarter but actually rose 5% on-year in Q3 to $1,150/tonne.

Adam Smith Poland