Category: Latest Updates

The Italian distribution sector is registering weak demand for long products, welded tube and sheet after a surge in sales of sheet and tube before the August summer break started. Considering the quiet market, local service centres and distributors fear the current wave of European mill price increases may cause the market to stall again, Kallanish hears.

Some re-rollers are particularly aggressive on tube and sheet prices, with the aim of recovering volumes. Thanks to some interesting prices heard in the market in recent days, sellers are managing to bring in orders.

There is a similar situation for sheet where, despite producers being expected to implement significant increases, some sellers are decreasing values by €20-30/tonne ($19-29) to fill order books. This will however imminently come to an end as all sellers are or will increase their prices, a move that is not being well received downstream.

The slow sales of the past two months are causing stocks to remain high. End-user demand has been particularly subdued this week and low-priced imported material is discouraging buyers from purchasing locally. Following the latest increases, many firms are looking to import cheaper sheet, rebar, merchant bar and sections.

Italian merchant bar prices are hiking to the level of around €750/t base ex-works. Section producers are beginning to communicate an increase of €100/t for the first category of beams. ArcelorMittal is communicating to its clients the decision to raise immediately spot prices for commodity grade longs by €150/t across Europe (see Kallanish passim). The hikes are meant to align prices to skyrocketing gas and electricity rates, Kallanish notes.

Natalia Capra France

The Italian wire rod market remains quiet this week with demand subdued and buyers in wait-and-see mode. Buyers who spoke to Kallanish say they will decidedly refuse to buy at increased prices. Their stocks remain medium-high.

After halting sales, some producers are increasing prices by €100/tonne ($99.8) compared to August levels, reaching €1,000/t for drawing-quality material.

Wire rod derivatives should also increase by €100-150/t. There were strong sales of this product in August when some sellers decided to decrease their prices before withdrawing offers. The increases, in line with all other long products, are mostly due to increasing energy prices that are forcing some mills to extend their August maintenance stoppages into September.

Ferriere Nord, a subsidiary of long steel producer Pittini, has requested access to a temporary layoff scheme for over 750 workers at its plant in Osoppo near Udine, northern Italy (see Kallanish 30 August newsletter). The plant is producing at reduced capacity while Pittini’s facilities in Verona and Potenza are said to be idled. This has however not been confirmed by Pittini.

End-user wire rod demand is reported to be extremely subdued this week. Sales activity has not yet resumed after the August break. Clients are not buying domestic material for October. Some say they only have limited orders for September and are refusing to commit for a longer period.

Because energy prices continue to climb in Italy, quoting is becoming a challenge for mills. Current contract prices in Italy are hovering at €920-950/t ex-works for drawing-quality material, with only low-tonnage sales occurring, sources suggest.

Natalia Capra France

Northern European wire rod prices continue to increase this week due to new purchases and amid higher energy costs in Europe. Most sources say there are new orders from customers, who are restocking.

“The market is very good, people are buying and prices are rising,” a buyer from the Netherlands tells Kallanish. “Prices for mesh have increased by €50-60/tonne [$50-60/t] and steel mills continue to purchase new volumes. Prices will probably soon reach €1,000/t.”

Domestic transaction prices for drawing-quality wire rod are at €940/t ($937/t) ex-works and mesh is at €950/t, sources say.

Producers are asking for €960/t ex-works, on average, for mesh-quality rod.

“Customers have waited and waited to see how the market will react after the summer holidays, and now the moment to buy is there because most steel mills have to purchase new volumes,” another merchant notes. “However, the issue with the high energy costs persists and some plants will have to probably temporarily stop production. And some smaller plants in Europe already did.”

According to him, the extremely low river water levels in Germany and other parts of Europe continue to impact raw materials deliveries and will influence prices.

Scrap prices are also slowly climbing again and not expected to drop soon – this will also put pressure on the market, he adds.

Scrap values in Germany increased slightly, taking old thick scrap sort 3 to €350/t, while the price for new scrap sort 2/8 was at €360/t. In Austria, scrap prices are also up: old thick scrap sort 3 is at €350/t and new scrap sort 2/8 at €365/t.

In Italy, wire rod producers are also expected to increase prices by €100/t compared to August levels, reaching €1,000/t for drawing-quality material (see separate story).

Most northern European wire rod market participants expect prices will continue to increase in the next few weeks due to restocking.

Svetoslav Abrossimov Bulgaria

German steelmaker Thyssenkrupp said Sept. 1 that it has completed the sale of its mining business to Danish engineering, equipment and solutions provider to the mining and cement industries FLSmidth.

Thyssenkrupp has completed the sale, initiated in July 2021, of the mining technologies business unit to the Danish company FLSmidth, which it sees as a step towards becoming a high-performance group, the company said.

Completion of this transaction has also improved the company’s financial position and strengthened its balance sheet, it added.

“With the sale of the mining business, we are further tightening our portfolio and taking a major step towards our goal of becoming a highly efficient group with strong, independent and specialized businesses,” said Thyssenkrupp CEO Volkmar Dinstuhl.

In the past 10 months, Thyssenkrupp had completed the sale of the infrastructure business and the AST stainless steel mill. The sale of mining technologies is now the third of its kind in the current business year.

Thyssenkrupp Mining Technologies offers tailored mining solutions and employs 2,200 people at 40 locations worldwide.

— Ekaterina Bouckley

Outokumpu’s stainless steel operations are currently running normally despite rising electricity prices, Chief Financial Officer Pia Aaltonen-Forsell said in a blog published on the Finnish company’s website Aug. 31, adding that it is adjusting its ferrochrome production to avoid smelting at peak hourly rates.

The stainless steel producer is well hedged from rising electricity prices in the short term, but the hedging percentage may decline in the long term, she said.

The company has hedged a significant amount of energy for this year through long-term contracts and fixed-price contracts, as well as partial ownerships in some energy utilities.

Its focus on energy efficiency and on growing the share of low-carbon energy, instrumental in lowering carbon emissions in the first place, is now also useful to address energy price inflation, the CFO said.

Outokumpu has already signed three new long-term wind-power contracts, which cover a significant part of the electricity needs of its sites in Kemi, Finland, and Germany.

The electric arc furnaces at its mills, although equipped with the best available technology, use large amounts of electricity, and electricity accounts for more than half of the company’s energy consumption, Aaltonen-Forsell said.

To keep this to the minimum, the company is optimizing the most energy intensive part of its operations, production of ferrochrome, she said. This accounts for 55% — versus stainless steel’s 45% — of the company’s total electricity consumption.

Outokumpu is now avoiding the worst peaks in electricity rates by suspending ferrochrome production in hours when electricity prices are the highest, she said.

The impact of this optimization on other operations has been limited, and stainless-steel production continues at a normal level, she added.

“We have several mills in Europe, and can switch stainless steel production from one mill to another [to work around] local energy restrictions, if needed,” said Aaltonen-Forsell.

However, she added that the situation in the European energy market is worrisome for private consumers and companies alike, saying that Outokumpu has prepared for various scenarios, and the winter ahead, which is expected to be difficult.

Outokumpu has previously informed the market that it expects energy costs to increase in the July-September quarter, but if there are disruptions in energy availability or if the electricity price keeps on rising, there could be an impact on its production volumes, Aaltonen-Forsell said, adding that any decision on the possible shutdown of production would be the sum of many factors, including the level of demand and production.

Some other European mills are already temporarily idling furnaces due to high energy prices, according to various market sources.

— Ekaterina Bouckley

Trading activity in the European hot-rolled coil market was muted Sept. 1, with only a few deals settled in Northern Europe as buyers held back from trading as they evaluate high offers.

Platts assessed HRC in Northwest Europe at Eur760/mt ex-works Ruhr, down Eur20 from Aug. 31.

A Northern European producer reported deals at Eur750-Eur770/mt EXW. Two distributors reported unconfirmed transactions at Eur750-Eur760/mt and Eur750/mt, both EXW Ruhr. A third distributor said that a German mill sold HRC at Eur750/mt EXW, which a second producer confirmed as an achievable price.

Both buyers and sellers estimated tradable value at Eur750-Eur760/mt EXW Ruhr. One producer also said that workable prices will increase next week to the common offer level of Eur800/mt EXW Ruhr.

HRC offers in Northern Europe have been heard at Eur800-Eur850/mt EXW.

Most European coil producers increased offers at the end of last week-early this week by at least Eur100, with market participants resolute that further discounts should not yet be offered against the new price level to solidify the uptrend.

One producer, reporting deals at Eur750-Eur760/mt EXW, confirmed their intention to raise target prices week beginning Sept. 5, ceasing sales below Eur800/mt.

Overall transactional activity remained low, both on pre-existing factors driving down demand—namely high inventories and poor end-consumption—as well as a wait-and-see sentiment as buyers digest the effect of increased offers.

“Everyone has just returned to the market and is waiting to see where the realistic price level will be,” said a producer. “At the very least it seems clear that prices won’t decrease any further.”

“Demand is still low, and stocks are still high, but to be honest this increase was necessary,” said a distributor. “If not, demand would fall even lower as sentiment would be for further decrease. Some mills may settle a little lower but in general, the price increase is holding with mills across Europe in solidarity—hopefully, they stay strong.”

In Italy, trade was similarly muted, with offers heard at Eur800-Eur820/mt EXW. A deal was reported delivered into Central Europe at Eur800/mt, the equivalent of Eur740-Eur750/mt EXW Italy.

Platts assessed South European domestic HRC at Eur750/mt EXW Italy, down Eur20 on the day.

The Platts South European import HRC assessment also moved to daily frequency Sept. 1, to better reflect South European trade flows and relevant HRC supply chains.

Deals were reported for substantial tonnages to Italian buyers at Eur670-Eur675/mt CFR ex-India. Indian offers were then withdrawn from the market in anticipation of a price increase, according to trader sources. A Japanese supplier also sold significant volumes of HRC to Italy at Eur670/mt CFR Italy.

Offers of Asian HRC in Italy have been reported at Eur660-Eur680/mt CFR and in Spain at Eur710-Eur720/mt CFR.

“Given the rise in domestic offers, buyers could switch to import coil,” said a trader source. “Asian mills could review prices higher, but now European prices are up Eur100/mt—they can comfortably do so and still offer competitively.”

Platts assessed South European import HRC at Eur670/mt CIF Sept. 1.

Platts is part of S&P Global Commodity Insights.

— Benjamin Steven, Maria Tanatar

Steel plate prices rose in Italy in the week to Wednesday August 31 on a partial recovery in buying activity, market sources told Fastmarkets.
Italy
Trading activity in Italy started to recover in the past week, with buyers seen coming back to the market to restock.

In addition, buyers said they anticipated further price increases given surging energy prices in the country.

Electricity prices in Italy averaged around €400 ($399) per MWh in July, up from about €271 per MWh in the preceding month and up sharply from €103 per MWh in July 2021, according to local energy service company Gestore dei Mercati Energetici.

During the week to Wednesday, several plate bookings were reported between €950-1,000 per tonne exw in the nation. But sources said that higher price end is more representative for smaller volumes.

Sources added that large stockholders were still holding back from trading, while smaller companies have returned to the market this week.

“Large stockholders are trying to lift [plate] prices for end users as well. If they succeed, they’ll come back for plate purchases,” a mill source said.

Plate offers from the local producers were reported at €1,000-1,050 per tonne exw for October-November volumes.

As a result, Fastmarkets’ price assessment for steel domestic plate, 8-40mm, exw Southern Europe, was €950-1,000 per tonne on Wednesday, up by €20-30 per tonne from €930-970 per tonne exw seven days earlier.

Northern Europe
Trading activity in the Northern European steel plate market remained slow in the seven days to Wednesday, with prices seen by market sources as mainly unchanged.

An offer from integrated mill in the region was reported at €1,100-1,150 per tonne exw.

One trading source in the region, however, said that producers could accept lower prices – €1,050 per tonne exw – for larger volumes. This, however, could not be widely confirmed by other sources.

A re-roller from Belgium was offering plate to the market at €1,100 per tonne exw and a booking at this level was reported late last week.

Fastmarkets’ weekly price assessment for steel domestic plate, 8-40mm, exw Northern Europe, was at €1,100-1,150 per tonne on Wednesday, widening from €1,120-1,140 per tonne on August 24.

Poland-origin plate was offered to the south of Germany at €985-1,000 per tonne cpt, late last week, however, sources said that the mill was now targeting at least €100 per tonne higher prices due to surging energy costs.

Published by: Julia Bolotova

European producers have increased cold-rolled and hot-dipped galvanized coil offers in the week to Aug. 31, following ArcelorMittal’s announcement, but trading activity remained muted.

Platts assessed domestic HDG prices in Northern Europe at Eur900/mt ex-works Ruhr, up Eur50 week on week.

Official offers have been reported at Eur920-980/mt ex-works Ruhr and tradable value has been heard at Eur920/mt ex-works Northern Europe.

Due to an absence of transactions, the assessment has been settled at prices between the latest deals and this week’s price indications.

Platts assessed CRC in Northern Europe at Eur875/mt ex-works Ruhr on Aug. 31, up Eur20/mt day on day and up Eur80 week on week. Tradable value has been reported at Eur900/mt ex-works Ruhr and offers have been heard at Eur900-950/mt ex-works Ruhr.

Demand has been slow due to distributors holding high stocks and low steel consumption from end-users, particularly from the automotive industry. Distributors still have high stocks of expensive material booked in the second quarter. And automotive industry demand has been limited due to a combination of a components shortage, high energy costs and lower demand for cars caused by the economic situation.

Although some steelmaker sources reported a higher number of enquires from buyers this week, they have not resulted in transactions, and so far, it remains unclear what volumes the buyers would actually need, sources said.

Steelmakers, however, pushed offers up as they need to cover rising energy costs and the bottom coil prices had been close or below production costs, according to estimations of market participants.

“Electricity costs are already a big problem across Europe,” a trader said. “Each government is trying to find regulations. Steel price was for 100% driven by energy costs. The restocking scale is uncertain and prices are high, steel demand remains very weak from both automotive and white goods industries.”

“To be honest, it would be nice if all the mills held prices higher and resisted lower bids,” a German trader said. “But demand is not there, I think some mills would give up and undermine the price recovery.”

Platts assessed South European CRC at Eur860/mt ex-works Italy on Aug. 31, up Eur60 week on week, and assessed domestic HDG at Eur870/mt ex-works, down Eur50 over the week.

Offers for CRC have been reported at Eur900-920/mt ex-works Italy and for HDG – at Eur930/mt ex-works Italy. The assessments were increased in line with prices for hot-rolled coil, used as feedstock for CRC and HDG, due to lack of deals settled.

— Maria Tanatar, Benjamin Steven

Limited transactional activity was heard at increased price levels Aug. 31, although market participants warned that mills should hold firm so as not to undermine price recovery despite reduced demand.

Platts assessed hot-rolled coil in Northern Europe up Eur20 on the day at Eur780/mt ex-works Ruhr.

Distribution and producer sources alike reported offers and tradable values at the Eur800/mt level, ex-works Ruhr and Northern Europe.

Offers were considered firm in the Northern market, reinforcing the uptrend, and there was some acquiescence to higher prices from buyers in the form of small tonnage deals reported at Eur800/mt ex-works Northern Europe.

“We’ve seen some immediate positive feedback at the Eur800/mt level,” a mill source said. “I think the market sees prices as increasing so those who really need to buy will take purchases right away.”

Market participants were optimistic that higher prices would hold at least for the near term. However, looking to future weeks, this would require a pick-up in demand and solidarity from mills not to resort back to discounted offers. Overall transactional activity remained limited, especially in Germany.

“If the mills guys cut discounts in the first week of increased prices then the market isn’t going to function at all,” a service center source said. “Sustaining the increase requires solidarity and brainstorming otherwise it’s completely senseless.”

Demand remained the primary question, with some producers reportedly selling at or close to a loss in recent weeks to secure volumes.

Sentiment for demand revival was uncertain, although overall inventories remained high. Many buyers were heard to have restocked some material in the week ended Aug. 26 in order to take advantage of expiring, cheaper offers.

“We’ve seen some more inquiries, but it’s hard to tell if this is a genuine need for material or just probing for discounts,” a second mill source said.

“We’ll have to see in the next few weeks,” a second service center source said. “Real restocking could begin this month, but it’s possible everyone just tries to survive to the end of the year on small purchases.”

In the Italian market, offers were also heard higher at Eur800-820/mt ex-works Italy. Sentiments largely mirrored those in the Northern market, with skepticism about demand recovery and concerns over high energy costs.

Platts assessed HRC in South Europe up Eur20 at Eur770/mt ex-works Italy.

Platts is part of S&P Global Commodity Insights.

— Benjamin Steven, Maria Tanatar

The UK has decided to immediately suspend trade remedy measures on hot rolled flat and coil steel imports from Ukraine for nine months, meaning these will not face a higher trade remedy rate, the government said Aug. 31.

The UK’s Trade Remedies Authority had assessed whether the rate of around GBP50/mt ($58.18/mt) should be removed after the Ukraine government asked the UK government to investigate the issue.

The TRA began the investigation on whether to suspend antidumping measures for Ukraine in June and looked into whether there had been a change in market conditions and if the effect was temporary.

It found that the conditions had been met after Russia’s invasion of Ukraine in March and it also found no evidence that suspending the tariffs on Ukraine exports would cause injury to UK producers, it said.

Platts assessed weekly DDP West Midlands UK hot-rolled coil at GBP685/mt on Aug. 26, down 17.5% since the start of 2022, according to S&P Global Commodity Insights data.

The suspension will run for nine-month period, which is the maximum duration allowed for an initial suspension under UK legislation, but can be extended thereafter if required, the government said.

In June, the TRA also started a review into antidumping measures on hot rolled flat and coiled steel from Ukraine, Russia, Brazil and Iran, as well as into anti-subsidy measures on imports of stainless steel bars and rods from India.

— Jacqueline Holman