Category: Latest Updates

Subdued demand from key end-user sectors – including the automotive industry – and high stocks at buyers has kept trade at a minimum in the cold-rolled and hot-dipped galvanized coil markets across Europe, sources said.
There was a substantial gap between mills’ official offers and buyers’ estimations of achievable prices. Sources said the key reasons were weak demand from end-user sectors, competitive imports and surging production costs.

Therefore, European producers were holding back from giving firm indications for CRC and HDG coil recently, amid weak buying activity.

“It does not matter what the price is; there is absolutely no demand. Buyers are not interested in bookings,” a Northern European trading source said.

“Stocks are still high, while demand is low. More and more end-users are [reducing work hours] and cutting output,” another source said.

CRC
Fastmarkets’ weekly price assessment for steel cold-rolled coil domestic, exw Southern Europe was €830-850 ($822-842) per tonne on Wednesday October 5, stable week-on week.

Rare offers were reported at €850-870 per tonne exw in Italy, while buyers’ price ideas did not exceed €830 per tonne exw.

Some producers have even withdrawn offers from the market.

“The costs of annealing [a heat treatment during the cold-rolling process] are very high, so our margins in the CRC segment are squeezed. The price should be over €900 [per tonne exw], but it is not possible for the time being,” one mill source said.

On top of the existing supply-demand imbalances, CRC prices in Southern Europe were under pressure from competitive import offers, sources said.

Market participants said, a supplier from South Korea has reduced its CRC offer price to Italy from €780 per tonne cfr last week to €760 per tonne cfr this week.

Offers from other suppliers in Southeast Asia were heard at €770-810 per tonne cfr Italy.

HDG
Fastmarkets’ weekly price assessment for steel hot-dipped galvanized coil domestic, exw Southern Europe was €870-890 per tonne on October 5, stable week on week.

The assessment was based on lower end of offers and higher end of buyer’s estimations of achievable prices.

Transactions were rare in the market, because Italian buyers had high stocks and preferred to hold back from trading.

Some offers from Southeast Asia of 0.5mm HDG were reported at €930-940 per tonne cfr for early-first-quarter delivery. That price, however, was not considered workable by buyers.

Published by: Julia Bolotova

Mining giant BHP has raised its global finished steel demand forecasts for 2030 and 2050 as decarbonisation of power is expected to boost steel consumption, Kallanish notes.

Compared to the previous tonnages, the firm has lifted its forecasts for steel consumption by 2% or 42 million tonnes for 2030, and 4% or 76mt for 2050, due to increased demand from green power.

The figures were released in a presentation to analysts on a site tour this week. Though the presentation did not include absolute numbers for BHP’s steel demand forecasts for 2030 and 2050, the revision in both absolute and percentage terms implies 2030 and 2050 demand are forecast at around 2.1 billion tonnes and 1.9 billion t respectively. Demand would therefore still decline by some 200 million t between 2030 and 2050.

“Looking solely at steel demand from the wind and solar segment, it is expected to increase five-fold from today to 2050,” BHP says.

According to BHP, power generation currently provides less than 2% of global steel demand.

“That is expected to triple by 2050, noting every percentage point increase in share in that year will equate to between 20mt and 25mt,” it says.

BHP notes the decarbonisation of power will be dominated by onshore wind and solar photovoltaic (PV), with complementary roles to be played by offshore wind, hydro and nuclear energy.

Where pure steel intensity per megawatt of capacity is concerned, wind and hydro power are the clear standouts, it says.

It also says offshore wind capacity requires 190 tonnes of steel per MW, and onshore capacity requires 124t.

Hydro capacity requires 161t, while solar is less steel intensive, at 45t per MW.

“But the sheer scale of the projected solar buildout makes it the second largest contributor to the overall uplift in steel demand from power generation, behind only onshore wind,” it says.

Siew Mung Tan Malaysia

The Italian prime minister’s office, Presidenza del Consiglio dei Ministri, has issued the official approval for Taiwan’s Walsin Lihwa’s buyout of Italian long stainless steelmaker Cogne Acciai Speciali (CAS), Kallanish learns from Cogne.

Approval has also come from the Ministry of Economic Development (Mise) and Taiwan’s antitrust authority. The deal closing will be concluded before the end of the year.

In June, Walsin signed a contract to buy 70% of CAS. The partner will invest over €110 million ($98.1m) in Cogne’s Aosta plant between 2022-2024. The growth strategy involves gaining market share in Europe and Asia and developing the group’s presence in the US. Cogne confirms it intends to boost output by adding shifts and hiring more workers.

The strategy is “to create the world’s largest group in the production of special long stainless steels, with concrete ambitions to further widen the perimeter of operations in Europe and the Americas,” Cogne president Giuseppe Marzorati said in June (see Kallanish passim).

Last year, Cogne achieved a turnover of €645m. Walsin Lihwa’s Basic Material division, the company’s long stainless steel business, employs 7,000 workers and posted a €4.7 billion turnover last year.

Natalia Capra France

New zero emission electric or hydrogen vehicle sales in Norway fell 18.4% year on year in September 2022 to 11,384 units, according to the latest data released Oct. 3 by the Norwegian Road Information Authority.

The volume, however, was up 23.1% from August’s volume and was at a three-month high.

The volume made up 77.7% of the month’s total 14,646 new passenger car registrations, which was also 18.6% lower year on year due to the pandemic and the war in Ukraine creating major production and delivery challenges, although the volume was up 18.5% month on month.

“The figures for both September and the year so far underline the clear turnaround we see in new car sales: The vast majority want to ‘drive green,’ ” authority Director Øyvind Solberg Thorsen said.

“And in a very challenging time, manufacturers and importers have so far managed to deliver a high number of electric cars to customers who ordered a long time ago.”

For the first nine months of 2022, zero emission vehicles totaled 79,930 units, down 0.8% year on year and making up 77.8% of the total 102,760 vehicles sold in Norway during the period.

Increased demand for EVs has driven up battery metal prices, with Platts seaborne lithium carbonate and lithium hydroxide assessments surging 120.4% and 149.2%, respectively, since the start of 2022 to $74,500/mt CIF North Asia and $79,000/mt CIF North Asia as of Oct. 3, S&P Global Commodity Insights data showed.

Registrations of new hybrid cars in September dropped 19.7% year on year to 2,481 units, although this was up 5.3% from August, making up 16.9% of the total sales.

Of these, 1,669 were rechargeable hybrids and 812 were not rechargeable.

Meanwhile, sales of petrol engine cars amounted to only 327 units, or 2.2% of total new vehicle sales in September, the lowest market share since January 2022.

The total dropped 40.3% on the year but was also up 13.5% from the previous month.

Sales of diesel engine cars in Norway in September climbed 11.3% from a year ago but fell 3.8% from August to 454 units, a 3.1% share.

According to S&P Global, Norway’s plug-in light duty EV sales are forecast to reach 161,860 units in 2022, up from 147,120 units in 2021, with this rising to 200,520 units in 2025 and 206,800 in 2030.

Norway has been one of Europe’s front-runners in EV adoption, with its total 2021 light duty PEV sales ranking sixth in the world after China, Germany, the US, the UK and France, according to S&P Global.

EV sales have been boosted by government incentives, including no purchase/import taxes, exemption from 25% VAT on purchase, reduced annual road tax, 50% toll road and ferry charges, cheaper municipal parking fees and access to bus lanes, among others.

— Jacqueline Holman

Transactional levels were relatively stable in the European hot-rolled coil market on Oct. 3, although market participants continued to lament unsatisfactory demand.

Distribution sources reported tradable value in a range of Eur700-730/mt ex-works Ruhr, although the sell side saw workable price levels higher at Eur720-750/mt ex-works Ruhr and Northern Europe.

Repeatable deals for commodity grades were confirmed at around Eur740/mt ex-works Northern Europe by a mill source.

Platts assessed hot-rolled coil stable on the day at Eur730/mt ex-works Ruhr. In South Europe, HRC was also assessed stable at Eur725/mt ex-works Italy.

Market participants reported service centers and distributors were in a destocking or wait-and-see mode, suggesting no intention to purchase substantially in the near-term. Steel consumption from core industries remained poor, limiting the rate at which distributors could deplete relevant inventories.

“The latest info we have from service centers and other distributors is that they are in a destocking or wait-and-see mode,” a mill source said. “General demand will stay down for a few weeks at least before buyers come back for [the first quarter] – prices could rebound then.”

Platts is part of S&P Global Commodity Insights.

— Benjamin Steven, Maria Tanatar

Steelmaker ArcelorMittal said it has postponed the shutdown of one of the blast furnaces at its Bremen site in Germany, and is instead planning to reduce the production of both blast furnaces at the mill in a move to reduce its power costs.

“As an energy-intensive company, we are dependent on our own power supply,” Reiner Blaschek, the CEO of ArcelorMittal Germany, told S&P Global Commodity Insights.

“With the decision to keep both blast furnaces running at a low production level, we are more independent and cost-effective with our own electricity supply. This is an advantage in what is currently a very volatile and difficult market,” he added.

At the beginning of September, ArcelorMittal Germany announced it would temporarily shut down parts of its production facilities at its sites in the country due to weak demand, negative market prospects and extremely increased energy costs.

This also included the 600,000 mt/year direct reduction plant at its Hamburg long steel plant. It said at the time that short-time work had already been in place at its Bremen and Hamburg plants and would remain at its production sites in Duisburg and Eisenhuettenstadt.

The two blast furnaces at Bremen have a combined capacity of 3.8 million mt/year. The company did not disclosed by how much production would be reduced by.

European steelmakers are currently experiencing low demand and high energy costs.

Domestic prices for hot-rolled coil moved down in Europe on Sept. 30 due to low demand from both end-users and distributors. Platts, part of S&P Global, assessed HRC in Northwest Europe at Eur730/mt ex-works Ruhr Sept. 30, down Eur5/mt on the day.

On Sept. 29, ArcelorMittal idled Blast Furnace A at its 4.5 million mt/year Gijon plant in Spain, as planned at the beginning of September, together with other temporary stoppages at sites in Poland and France.

In France, ArcelorMittal stopped production at its 1.8 million mt Blast Furnace 3 in Dunkirk Sept. 19, with relining started and due to last six to seven weeks, the company said.

In Poland, ArcelorMittal previously confirmed to S&P Global that the company’s 2.2 million mt/year No. 3 blast furnace would be idled some time in the first week to 10 days of October.

— Annalisa Villa

Voestalpine has budgeted around Eur196 million ($192 million) for research and development in the current business year, the Austrian steelmaker said Oct. 3.

“Research and development play a major role at voestalpine,” said Herbert Eibensteiner, CEO of voestalpine AG. “By consistently investing in new products and processes, we are solidifying our position as a global player in demanding product segments. Another research focus is greentec steel.”

Greentec steel is voestalpine’s phased plan for green steel production on which part of the existing blast furnace route will be replaced by a hybrid electric steel route.

The first step will be reducing CO2 emissions by one third starting in 2027.

The company is studying how to produce high-quality steel with a different raw material mix as well as digital simulation methods and processes to prepare and support the transformation of steel production.

On the product side, voestalpine R&D is also examining the development of new digital and smart technologies such as “intelligent” cold-rolled steel strip, with conductor tracks for sensors integrated into a special high-quality coating layer.

Voestalpine is a key steel producer for flat products for the automotive and white goods industries as well as the aerospace and oil and gas industries.

Domestic prices for hot-rolled coil moved down in Europe Sept. 30 due to low demand from both end-users and distributors. Platts, part of S&P Global Commodity Insights, assessed hot-rolled coil in Northwest Europe at Eur730/mt ex-works Ruhr Sept. 30, down Eur5/mt on the day.

— Annalisa Villa

Turkish merchant bar and sections producer Kocaer Celik, which is aiming to focus more on value-added steel production with new investments, is also planning to expand distribution channels in overseas markets, the company said Sept. 30.

“In line with our overseas strategic growth plans, we are targeting to raise our business volume and revenues in export markets by expanding distribution channels,” the company said in a statement to the public disclosure platform.

“Within this scope, we are aiming to continue our growth in our existing distribution channel in the UK and to establish similar companies in other countries,” Kocaer said.

The company changed the name of its MyMetal Ltd affiliate in the UK to Kocaer Steel UK Limited, as of Sept. 29, it also said.

Kocaer has a combined steel production capacity of 800,000 mt/year at its three Turkish mills producing merchant bars, beams, channels and sections.

The company built a new 100,000 mt/year hot-dip galvanizing line at the beginning of 2022 to increase its structural steel output.

Value-added steel products currently make up 40% of the company’s total steel production, with Kocaer saying in a statement it aimed to raise this to 50% at the end of 2022 and to 75% in 2024.

It currently exports 84% of its steel output to 140 different countries, it said.

Although long steel export prices at Turkish mills rose sharply, especially in March, prices have declined since then due to a sluggish market environment.

Platts, part of S&P Global Commodity Insights, assessed Turkish exported rebar at $682.5/mt FOB Sept. 27, down from an intra-year high of $970/mt FOB reached March 24.

— Cenk Can

Domestic heavy plate prices were stable in Italy over the week to Sept. 30 despite a slowdown in demand.

Platts assessed plate in Southern Europe at Eur1,000/mt ex-works Italy Sept. 30, unchanged over the week.

Deals and tradable value have been reported at Eur1,000-1,050/mt ex-works Italy.

Domestic prices in Germany moved down on the week as steelmakers gave discounts to settle deals.

Platts assessed plate in Northern Europe Eur25 lower on the week at Eur1,075/mt ex-works Ruhr Sept. 30.

Transactions and achievable prices have been reported at Eur1,070-1,080/mt ex-works Ruhr, while offers have been heard at Eur1,050-1,100/mt ex-works Ruhr.

Demand for heavy plate has softened this week as a majority of stockholders have already booked required volumes earlier in September. Slower trading activity, however, was unlikely to result in a price decline as demand from projects and other buyers remained healthy and as mills had good order books.

“Plate demand has declined a bit this week, mainly as stockholders have booked what they needed over the past couple of weeks,” an Italian source said. “Rerollers in Italy have sold out October and part of November rolling, so the demand slowdown had no negative impact on prices.”

In addition, the ability of steelmakers to give discounts was limited by elevated energy costs.

Platts assessed import slab in Southern Europe at $600/mt CIF Italy Sept. 30, unchanged over the week.

Cheap import offers from South Korea have disappeared from the market this week after the deals had been settled at $570-$600/mt CIF Italy earlier this month.

But offers from Asia still have been reported at $600/mt CIF Italy and from India — at $650/mt CIF Italy.

Platts is part of S&P Global Commodity Insights.

— Maria Tanatar

In an about-turn from a recent interim recommendation, the UK’s Trade Remedies Authority has proposed to keep anti-dumping measures of between 18.4% and 22.5% on imports of steel rebar from China, the authority stated Sept. 30.

The measures are applicable on imports of high fatigue performance steel concrete reinforcement bars from China into the UK that are typically used in the construction industry, it said.

The TRA has changed its original proposal to abolish the duties due to the availability of additional data and economic forecasts since the July publication of a Statement of Essential Facts (SEF) and receipt of new responses from participants in the trade case, it said. The TRA no longer considers that keeping the measures in place would result in supply issues for HFP Rebar.

In July 2016, definitive anti-dumping duties on the product were imposed by the European Commission, and the TRA’s recent review of the product’s status is a transition review, initiated in April 2021, following the UK’s exit from the European Union, the SEF noted.

The EC, however, allowed the EU’s anti-dumping measures on the Chinese HFP rebars to expire in July 2021 without review.

The TRA was formally and legally established in 2021 as an independent arm’s-length body of the UK’s Department for International Trade, or DIT.

In a statement issued Sept. 30 detailing the reasons for the TRA’s about-turn on its previous recommendation, the TRA said that the likelihood of dumping and injury occurring from the imports continues, and therefore it is recommending to keep the current anti-dumping amount.

The TRA had previously “identified a risk that the Russian invasion of Ukraine may lead to a shortfall in supply of HFP Rebar in the UK as a result of a significant reduction in imports from Russia, Belarus, and Ukraine, which have historically been significant sources of HFP Rebar for the UK market,” it said in a public notice. “The import data, which has become available since the publication of the SEF, shows that imports from Russia, Ukraine, and Belarus have fallen as anticipated; however, these have been replaced by imports from other countries such as Portugal, Spain and Turkey.”

In addition, recent forecasts for the construction sector and the UK economy as a whole now indicate that demand for HFP rebar is unlikely to rise as previously anticipated. As a result, the continuation of the anti-dumping duties on Chinese imports would not have any significant impact on supplies to the UK’s construction industry, it said.

“New evidence suggests that international supply has proven to be more resilient than we anticipated and the forecasts for demand look weaker,” the TRA said in the public notice. “We no longer consider undersupply of HFP Rebar to be likely. We, therefore, conclude that maintaining the measure is in the economic interests of the UK.”

Import data from the UK’s tax and customs body HMRC shows that imports of rebar into the UK from all origins rose over January-May to around 230,000 mt, up from around 170,000 mt and 200,000 mt in the same period of 2021 and 2019, respectively, before the impact of COVID-19. Imports were just under 150,000 mt in January-May 2020, a period when the market was impacted by COVID-19, the data showed.

UK importers of the Chinese rebars were cited in the original 2016 EC decision to impose duties as CMC Ltd, Eurosteel Ltd and Ronly Ltd.

Following the latest recommendation from the TRA, interested parties have until Oct.14 to comment. The TRA will then produce a final recommendation, which will be sent to the secretary of state for international trade to take the final decision on whether to uphold the TRA’s recommendation.

— Diana Kinch