Category: Latest Updates

Italian rebar producers were targeting higher prices in the week to Wednesday November 2, thus reversing the downtrend which has been occurring across long steel markets in Europe. Prices for rebar in the Spanish market remained stable.Depressed demand and an uncertain outlook continued to inhibit trading activity in both markets, sources told Fastmarkets.

Italy
Rebar producers targeted higher prices despite slow demand and ongoing pessimistic sentiment, Fastmarkets heard.

Mills were looking to target and maintain higher prices until Christmas, sources said.

Whether demand is sufficient to absorb these higher prices remains uncertain, they added.

Fastmarkets’ weekly price assessment for steel reinforcing bar (rebar) domestic, exw Italy was €860-890 ($853-883) per tonne on Wednesday, up by €30-55 per tonne from €805-860 per tonne on October 26.

Slow end-user consumption and persistent destocking, in part due to projects being postponed or cancelled, have inhibited demand levels.

Despite no significant increase in demand, Italian producers targeted higher prices in the week to Wednesday.

“Since last Wednesday producers have established new higher prices and they don’t want to sell cheaper than this,” a buyer in Italy said. “I think that they will try to sell at a higher price till Christmas closures.”

With market conditions not expected to improve for the remainder of the year, it remains to be seen whether these prices can be maintained, sources said.

Production cuts have not affected prices because of the ongoing supply-demand imbalance, sources added.

At the same time, energy costs are expected to surge toward winter as demand increases, sources said. Rising prices for rebar in Italy would help cushion mills against rocketing energy prices.

Overall appetite for imports remained depressed, Fastmarkets heard.

“Imports to the south have always been most attractive when domestic prices have reached high levels,” a second buyer in the region said. “With prices going down since the middle of September, imports have become rare.”

Spain
Prices remained stable in the Spanish rebar market in the week to Wednesday, Fastmarkets heard.

Weak end-user consumption and a depressed outlook among buyers continued to plague market activity.

Fastmarkets’ weekly price assessment for steel reinforcing bar (rebar), domestic, delivered, Spain was €800-850 per tonne on Wednesday, unchanged since October 12.

International scrap prices affect the price of all long steel products. Scrap prices have largely stabilized since mid-October.

Fastmarkets’ daily calculation of the index for steel scrap, HMS 1&2 (80:20 mix), North Europe origin, cfr Turkey was €354.41 per tonne on Wednesday, up from €351.83 per tonne a week earlier.

Published by: India-Inés Levy

Steel plate prices were stable to slightly weaker in Italy in the week to Wednesday November 2, with producers struggling to secure sales for fourth-quarter material, Fastmarkets heard.Fastmarkets’ weekly price assessment for steel domestic plate, 8-40mm, exw Southern Europe, was €880-920 ($871-911) per tonne on Wednesday, narrowing downward by €20 per tonne from €880-940 per tonne exw on October 26.

Offers prices from the local re-rollers were reported at €900-950 per tonne exw, depending on a volume, the same as seven days ago. Bids from large buyers were heard at €850-880 per tonne exw.

Transactions were reported at €900-920 per tonne exw during the assessment week, but for limited tonnages.

Several sources said, that for large volumes (over 3,000 tonnes) buyers’ price idea was actually below €850 per tonne exw. No large volumes have been traded recently, however.

Italy-origin plate was offered to Germany at around €900 per tonne exw, which nets back to about €950 per tonne delivered to the south of Germany.

Trading activity in Italy’s plate market remained sluggish over the week; buyers were not looking to restock due to sufficient inventories and on the expectation of a further downtrend in prices.

On the other hand, producers in Italy still had December rolling plate to sell.

Reduced energy prices and the availability of cheap slab have created additional downward pressure on plate prices in the nation.

In Italy, for instance, average wholesale energy prices were €224.77 per megawatt-hour (MWh) in October 2022, down from €429.92 per MWh in September and €543.15 per MWh in August, according to local energy service company Gestore dei Mercati Energetici.

Sentiment for steel slab, the key feedstock for plate production, was also quite negative, with the most recent offers from China and South Korea reported at $580-600 per tonne cfr.

Additionally, import plate offers from Southeast Asia to Italy were reported at quite competitive levels – €790-800 per tonne cfr, mainly from Indonesia and South Korea.

Published by: Julia Bolotova

Southeast Europe (SEE) crude steel production decreased in September compared with the same month last year, according to the latest worldsteel data monitored by Kallanish. Regional output amounted to 368,602 tonnes, down by 15.6% year-on-year.

However, output was more than in August, when SEE production was 345,950t, down by 21.8% on-year (see Kallanish passim).

In January-September, regional production was almost flat on-year at 3.63 million tonnes.

Serbia was again the largest steel producer among the seven countries of SEE, which also include Bulgaria, Croatia, Slovenia, Bosnia, North Macedonia and Moldova.

Serbia’s production of crude steel totalled 1.36mt in January-September, up by 18.6%.

Second-largest producer in the region Bosnia and Herzegovina saw crude steel output almost flat on-year at 680,000t.

Third-largest steel producer Slovenia saw nine-month production drop by 7.8% at 479,560t.

Fourth-largest Bulgaria’s production was flat on-year at 438,100t.

Fifth-largest steel producer Moldova saw its crude steel output down by 0.9% on-year at 423,400t.

North Macedonia produced 182,374t, less by 5.7% on January-September 2021, but Croatia produced 126,607t, almost flat on-year.

Special steelmaker Slovenian Steel Group (SIJ) said earlier it will reduce production by a third in September due to extremely high energy costs and customers being unlikely to accept still higher steel prices (see Kallanish passim). It anticipated a 40% reduction in production volumes in the fourth quarter.

HBIS Group Serbia Iron & Steel’s production in January-September was stable and the firm has increased exports to the EU, despite the energy crisis and global logistical problems. In July, the plant nevertheless idled blast furnace No.1 at its Smederevo works due to low global demand for steel products (see Kallanish passim).

Svetoslav Abrossimov Bulgaria

ArcelorMittal Eisenhüttenstadt has started operating the new freight train terminal it designed together with DB Cargo. The steelmaker highlights it as being particularly environmentally friendly, calling it a “milestone of green logistics”. The official launch was marked by German transport minister Volker Wissing.

With partially automated, state-of-the-art unloading facilities at the steelworks, the environment is protected better from fine dust and emissions, Kallanish learns from the companies. At the same time, lighter wagons and special containers ensure even more efficient utilisation of goods trains, they claim.

For modern rail logistics, DB Cargo has invested in multifunctional double wagons and special containers from Austrian manufacturer Innofreight, which also designed the unloading facility. The new equipment optimises the loading volume and increases the payload per train by up to 20%. Fewer goods trains need to run for the same transport volume, DB Cargo says.

The terminal costs millions of euros, ArcelorMittal says without giving the precise figure. From now on, it will be served by 18 back-and-forth transports from Hamburg, and 13 from Poland. “The new unloading facilities are tangible proof that these investments are money well spent for the future,” says ArcelorMittal Germany chief executive Reiner Blaschek. “With our transformation plan, we can save more than 3.5 million tonnes of CO2 per year in Eisenhüttenstadt by 2030.”

Christian Koehl Germany

EU automotive sector output should rebound by 1.1% on-year in 2023, following a projected 1.7% drop this year, provided that war-related disruptions and economic uncertainty ease substantially, says Eurofer. The 2022 forecast has been revised down from the previous 0.5% contraction due to ongoing supply chain disruptions and the war in Ukraine.

Automotive output returned to growth, albeit modest, in the second quarter, following three consecutive quarters of decline due to severe supply chain issues. Output nevertheless remains well below both pre-pandemic and pre-2019 recession levels, Eurofer points out.

Supply chain issues and war-related disruptions, coupled with low consumer confidence and squeezed incomes due to high inflation, have kept on weighing on vehicle output.

The latest monthly passenger car registrations data show that in August and September passenger car registrations reversed their downward trend in the EU. This increase, however, is largely due to the comparison with the very low figures of September 2021, when the semiconductor shortage seriously hindered vehicle production.

Demand is expected to remain weak until the macroeconomic picture and consumer disposable income substantially improve – “which has become now less likely given the worsening economic outlook and more subdued economic growth perspectives”, Eurofer says in a report seen by Kallanish.

Adam Smith Poland

The European hot-rolled coil markets remained quiet due to holidays Nov. 1, with tradable levels seen stable on the day.

In Northern Europe, market participants viewed the Eur650/mt price level as well-established, ex-works Ruhr, despite an ongoing lack of transactional activity.

Buyers remain largely out of the market, sources said, adding that they were still suffering from high levels of expensive stock purchased earlier in the year and unable to deplete inventories at usual rates due to poor end-user consumption.

Tradable value indications were heard lower on the day, with some expecting prices as low as Eur620/mt ex-works Northern Europe could be settled with larger buyers.

Indeed, buy-side sources expected prices to continue to decline, even into the Eur500s, as demand has little reason to pick up in the near term with most distributors rejecting any intention to restock before the year’s close.

In Italy, sources reported tradable value in a range of Eur650-660/mt ex-works, with the Platts assessment stable at the mid-point, Eur655/mt ex-works Italy.

Platts is part of S&P Global Commodity Insights.

— Benjamin Steven

EU steel-consuming sector output is expected to contract by 0.9% on-year in 2023 as the economic deterioration seen since summer spills over into the first half of next year, says Eurofer. The economic and industrial outlook is expected to improve only from the second quarter of 2023 onwards.

This would be the second Steel Weighted Industrial Production (SWIP) recession since 2013, after the one due to the pandemic in 2020, while output was flat in 2019, Kallanish notes.

Output in H1 2022 saw only limited impact from the outbreak of war in Ukraine, rising 4.9% and 5.7% on-year in the first and second quarters respectively. The growth trend started as a result of the strong rebound following the easing of Covid restrictions in H1 2020.

Growth this year was driven by positive developments in the construction, mechanical engineering and transport sectors, while domestic appliances faltered. Moreover, automotive sector output returned to growth. However, progress has been hampered since summer due to energy prices and production costs rising to nearly unsustainable levels, Eurofer points out.

Steel-using sectors’ output is expected to expand by 1.9% in 2022 versus the previous forecast of 1.1%.

Construction and mechanical engineering output are forecast to rise 5.6% and 3.3% respectively in 2022 but decline 1% and 1.7% respectively on-year in 2023. Conversely, automotive and domestic appliances output are projected to fall 1.7% and 4.5% respectively this year but rebound 1.1% and 1.8% respectively in 2023.

Adam Smith Poland

ArcelorMittal will supply steel for railway infrastructure projects in Spain, Kallanish learns from Spanish state-owned company Adif.

“Adif’s board has approved the award to ArcelorMittal of six contracts for the new railway supply that includes the Mediterranean Corridor, as it passes through Valencia and Catalonia, and some high-speed connections in the national railway network,” Adif says. The combined value of the contracts is €163 million ($161.6m).

ArcelorMittal will fulfil the agreement by supplying 81,200 tonnes of rails, profiled bars or rolled steel from its plant in Gijón, northern Spain, the railway infrastructure company adds.

Todor Kirkov Bulgaria

Miele and Salzgitter Flachstahl have signed a declaration of intent to secure a defined quantity of “green” steel for Miele in the future, Kallanish hears from the steelmaker.

The steel will be produced and delivered by strip steel unit Salzgitter Flachstahl commencing at the end of 2025 under the SALCOS (SAlzgitter Low CO₂ Steelmaking) programme.

In March 2021, Miele was the first company to receive coils from Salzgitter’s newly defined low-carbon route. The steelmaker then said it valued a third-party authentication to present to further customers. Meanwhile, Salzgitter has entered into similar partnering agreements with companies in the automotive industry, cold-rolling specialists and domestic appliance manufacturers.

“This agreement with our long-standing customer Miele is another example of how a market is developing for sustainably produced steel products,” says Salzgitter Flachstahl chief executive Ulrich Grethe.

In a pilot project, Miele is already processing low-CO2 steel for use in stoves and ovens. Thanks to the use of climate-friendly energy sources and steel scrap, the volume of CO2 emitted in the manufacture of this material is reduced by more than 66%, it claims.

Christian Koehl Germany

Crude steel production costs for electric arc furnaces are set to end the current year, on average, at below the production costs of blast furnace mills in Italy, according to the latest calculation made by Siderweb.

The production cost calculation takes into consideration all variable costs including raw materials, energy and other costs.

In 2021, the calculation indicated that the production cost of one tonne of steel at EAF mills equalled €594.98, against €563.04/t for integrated mills using the blast furnace route, Kallanish notes.

The trend has reversed this year despite scrap prices holding firmer than iron ore; coke costs have meanwhile doubled on average. As a result, production cost for one tonne of steel in an EAF is predicted by Siderweb to be on average this year at €681.28, while BF cost is at €778.25/t.

Going into 2023, Siderweb expects BF production costs to continue being elevated, though, in general, input costs will decline. EAF production costs are set to be, on average, at €603.39/t next year and BF costs at €666.23/t. According to Siderweb, in 2023, the differential will be at €63/t, below the differential of almost €100/t in 2022.

All raw material prices are set to decline in 2023, together with electricity and gas costs. Iron ore costs for Italian mills are set to be on average at €100.50/t in 2023, down from over €116/t in 2022. Meanwhile, scrap costs are set to be at €325.05/t, down from some €367/t in 2022.

Emanuele Norsa Italy