Category: Latest Updates

Steel sales at EU steel service and distribution businesses slowed in the first half of the year while stocks rose, particularly for strip mills’ products, European steel distributors’ lobby group Eurometal said Aug. 16.

In January-June 2022 sales volumes of steel coil and sheet products by EU steel service and distribution centers slipped by 1.1% on the year, after they inched up 0.1% in January-May.

Inventories within the distribution sector, meanwhile, rose to be the equivalent of two-and-a-half months of material,

Expressed in days of shipments, stocks of strip mills’ products within the EU steel distribution sector were at 79 days in June 2022 compared with 53 days in the same month last year.

Domestic prices for hot-rolled coil in both the north and south of Europe were unchanged on the day Aug. 15. Platts, part of S&P Global Commodity Insights, assessed Northwest European HRC at Eur750/mt ($761/mt) ex-works Ruhr and South European at Eur720/mt ex-works Italy. Compared with 2021 year-end levels, North and South European prices came off by 18.6% and by 13.8% respectively, according to Platts data.

Shipments grouped as Multi-Product and Proximity Steel Stockholding Distribution by EU and UK steel distributors fell 12.8% on the year in H1, with all products declining within the category.

In June stocks rose 4.4% on the year, with all products except profiles and merchant bars recording an increase.

Compared with May 2022, June stocks fell 2.3%, despite a rise for rebars, plates and tubular products.

Eurometal’s market monitoring system tracks EU steel distribution shipments and stocks for two business segments — Flat and Multi-Product and Proximity Steel Stockholding Distribution.

— Ekaterina Bouckley

Turkey’s coated steel coil exports, most of them hot-dip galvanized coil, were 10% lower year on year at 868,800 mt in the first half of 2022, as demand from the EU fell substantially, according to Turkish Statistical Institute data.

HDG exports to Spain fell 53% year on year to 123,500 mt in H1 and exports to Greece fell 18% to 53,300 mt, although Romania imported 73,000 mt, up 38%.

Turkey’s other EU export destinations were Italy at 50,200 mt, down 50% year on year, Portugal at 40,000 mt, down 37%, and Bulgaria at 34,500 mt, up 5%.

Amid low EU demand, coated coil exports to the US rose to 99,000 mt, up from 33,000 mt a year ago.

Other export destinations were Canada at 47,500 mt and Egypt at 31,300 mt.

The total revenue generated from the overall exports rose 23% on the year to $1.15 billion in H1, amid higher global steel prices, according to the data.

Due to the collapse of the CIS raw materials supply chain, Turkish mills’ HDG prices exceeded $1,400/mt in mid-March, but have declined since April on low demand and lower HRC prices, with Turkish domestic HDG was assessed at $790/mt EXW Aug. 12, according to S&P Global data.

Looking ahead, with the European Commission imposing antidumping duties on HDG steel coils and sheets imports from Russia and Turkey for five years from Aug. 12, exports to the EU could fall further in the coming months, industry sources said.

The antidumping duties are 10.5% for MMK Metalurji, 2.4% for Tatmetal, and 11.0% for all other companies, including Tezcan.

— Cenk Can

UK-based steelmaker British Steel has raised its prices for structural sections by GBP100/mt ($120.35/mt) for all new orders with immediate effect, it said in an Aug. 15 letter to customers seen by S&P Global Commodity Insights.

The company attributed the increase to a surge in energy prices and the significant impact on steelmaking costs.

Electricity costs make up a large portion of steelmaking costs, accounting for up to 20% of the costs of converting basic raw materials into steel.

UK day-ahead baseload electricity was assessed by Platts at GBP381.85/MWh Aug. 15, up 260% year on year. The baseload Calendar 2023 contract was assessed at GBP449.65/MWh, a new record and up 350% year on year.

The UK usually produces around 7 million mt/year of crude steel, about 70% of the country’s annual requirement, although this dropped to 6.05 million mt in 2021.

The UK government said Aug. 12 that it was consulting on the option to increase support for high electricity-using businesses like the steel industry. It is aiming to boost the level of exemption for certain environmental and policy costs from 85% to up to 100%.

— Jacqueline Holman, Benjamin Steven

European hot-rolled coil prices remained stable Aug. 16 on minimal trade, although sentiments on price direction were uncertain.

Platts assessed hot-rolled coil in Northwest Europe stable at Eur750/mt ex-works Ruhr Aug. 16.

Market participants saw tradable value was circulating around the Eur750/mt level. Only one service center source suggesting material could be available cheaper, citing a workable range at Eur740-750/mt ex-works Ruhr.

By way of contrast, a second service center source had not seen said lower levels in the market, instead reporting the lowest offers were received at Eur770/mt ex-works Ruhr.

This suggested a degree of uncertainty as to current price levels in Northern Europe, which was confirmed by a trader source in the day.

“Prices are questionable at the moment,” the trader said. “There have been some deals, but you can hardly judge the market on August trading. No one buys serious volumes and there is a clear lack of outlook at present.”

Previously, mills were heard withholding offers for late-fourth quarter, which was speculated as price protection, but the trader suggested that mills would now settle orders for November-December delivery at current spot prices, dampening bullish expectations for the near-term despite rising production costs.

“Mills are still trying to sell more volumes into the market, keeping the prices down, but demand isn’t really recovering in kind,” a third service center source Aug. 16.

A second trader agreed the sentiment, stating that prices could even fall below the current Eur750/mt stabilization point without much surprise from the market.

Buyers continued to avoid the import market, given ongoing uncertainties on price direction, especially since import and domestic prices were in close proximity when factoring in transportation and other related domestic costs.

In the Southern market, the Platts HRC assessment remained stable at Eur720/mt ex-works Italy on muted trading and demand.

A third trader reported prices of Eur700-740/mt as achievable depending on the buyer, while a fourth confirmed the Eur720/mt level was tradable, both basis ex-works Italy.

Platts is part of S&P Global Commodity Insights.

— Benjamin Steven, Maria Tanatar

The US International Trade Commission has determined that, without countervailing duty orders, cold rolled steel products from Japan, South Korea, China, India and the UK would materially damage the US market, Kallanish learns.

Cold rolled steel products from Brazil were also under review, but the Commission determined that revoking countervailing measures and antidumping duties would not lead to the continuation of material damage in the US.

The Commission instituted reviews 1 June, 2021, determined on 7 September that it would conduct full reviews, and on 24 May conducted its hearing.

Katherine Hiner, acting secretary to the Commission, decided to continue countervailing duties on 9 August.

Kristen DiLandro USA

The European Commission has imposed a definitive anti-dumping duty on imports of various coated flat steel from Russia and Turkey. The collection of these duties is however suspended during the period of EU safeguard measure application, Kallanish notes.

This follows the conclusion of an investigation initiated in June 2021 and decision not to impose preliminary measures in January 2022.

The products investigated fall under HS codes 7210410020, 7210410030, 7210490020, 7210490030, 7210610020, 7210610030, 7210690020, 7210690030, 7210908092, 7212300020, 7212300030, 7212506120, 7212506130, 7212506920, 7212506930, 7212509014, 7212509092, 7225920020, 7225920030, 7225990022, 7225990023, 7225990041, 7225990092, 7225990093, 7226993010, 7226993030, 7226997013, 7226997093 and 7226997094.

The probe found that EU consumption of these products was 10.69 million tonnes of the investigation period, the 2020 calendar year, versus 11.49mt in 2017. Imports from the countries concerned reached 1.1mt in the IP versus 196,643t in 2017. EU production was 9.8mt in the IP versus 10.92mt in 2017, with capacity utilisation down to 73% from 90%.

The duties are 36.6% for MMK, 10.3% for NLMK, 31.3% for Severstal and 37.4% for all other Russian companies. The tariff is 10.5% for MMK Turkey, 2.4% for Tatmetal, 11% for Tezcan, 8% for other Turkish cooperating companies and 11% for all other Turkish companies.

Adam Smith Poland

The UK government says it is considering further relief for energy-intensive industries, such as steel, under new proposals to help subsidise their electricity costs.

The government is consulting on the option to increase the level of exemption for certain environmental and policy costs from 85% of costs up to 100%.

“This reflects higher UK industrial electricity prices than those of other countries including in Europe, which could hamper investment, competition and commercial viability for hundreds of businesses in industries including steel, paper, glass, ceramics, and cement, and risk them relocating from the UK,” the government says in a note.

“The publication of this consultation is a significant step forward in delivering competitive electricity prices for the UK steel sector and should provide some much-needed relief in the face of extremely challenging circumstances at the current time,” says UK Steel director general Gareth Stace. “While there remain difficulties, this announcement demonstrates that UK government understands the challenges of British industry and continues to support steelmakers and steel communities across the country.”

This is a consultation on a targeted support scheme for energy intensive industries, as announced in April in the government’s Energy Security Strategy. Launching this consultation now provides the future government with the option to introduce this scheme given current high electricity prices, the government says.

The separate EII Exemption Scheme meanwhile allows big energy users to claim an exemption of up to 85% of their Contract of Differences (CoD) and Renewables Obligation (RO) costs. The government said in April it would extend for three years the EII compensation scheme and increase its aid intensity to up to 100%, or 1.5% of GVA (see Kallanish passim).

Adam Smith Poland

European hot-rolled coil prices were broadly flat on Monday August 15 amid public holidays, with market sentiment remaining dull, Fastmarkets has heard. Trading activity in the EU HRC market was practically non-existent on August 15 due to public holidays in most member-states.

During the week ended August 12, mills in Northern Europe had taken an aggressive approach to selling excess volumes and filling the gaps in their order books. Traded volumes, however, remained limited due to there being sufficient stocks at buyers.

“Stockholders and steel service centers are mainly focused on selling their devaluing [HRC] stocks rather than buying new material,” a trading source in the region told Fastmarkets.

Market sources suggested that buying activity in the region might not recover until early in the fourth quarter of this year.

Fastmarkets calculated its daily steel HRC index, domestic, ex-works Northern Europe, at €770.00 ($789.64) per tonne on Monday, down by just €4.17 per tonne from €774.17 per tonne on Friday.

The latest calculation of the index was down by €53.75 per tonne week on week and by €81.67 per tonne month on month.

Monday’s index was based on market participants’ estimates of achievable prices heard at €750-780 per tonne exw.

Market sources were questioning whether the HRC price was at rock-bottom once again.

“One month ago, the market was discussing the [HRC] price bottom at €840-850 per tonne exw. Now we are heading closer to €700 per tonne exw,” another trading source told Fastmarkets.

Fastmarkets’ calculation of its daily steel HRC index, domestic, exw Italy, was €770.00 per tonne on Monday, stable day on day.

The latest calculation of the Italian index was down by €2.50 per tonne week on week, but flat month on month.

Italy’s market remained quiet on Monday, sources said. Mills and buyers in the nation were both out of the market but should return in late August-early September.

Before the summer stoppages, transactions for HRC in the nation were heard at €750-770 per tonne exw.

Official offers from domestic mills were heard at €780-800 per tonne exw.

Published by: Julia Bolotova

Domestic prices for hot-rolled coil in both the north and south of Europe were unchanged on Aug. 15 as market activity has been limited.

Tradable value for HRC in Germany has been reported at Eur750-760/mt ex-works Ruhr with majority of sources citing Eur750/mt ex-works Ruhr as an achievable price. Deals had been heard at those prices a week prior.

Platts assessed hot-rolled coil in Northwest Europe at Eur750/mt ex-works Ruhr on Aug. 15, unchanged day on day.

Trading activity in Northern Europe has been slow due to seasonal factors, high inventories of distributors and uncertain outlook among buyers on demand in September.

“There is no clear idea on what the future holds for the market,” a distributor said. “Mood is depressed, the mills need to reduce production and stop dragging prices down. The latest price drop is entirely on European mills, they started to give discounts when everyone though that the market reached bottom.”

The situation has been similar in Italy, but the majority of the country’s mills topped operation for long summer maintenance and another producer temporarily idled furnaces and had limited volumes available for spot buyers.

This, however, did not help to protect prices from decline in Italy, sources said. One producer was reported to sell volumes at low prices to secure sales.

RC in South Europe was assessed stable day on day at Eur720/mt ex-works Italy on Aug. 15.

Market sources estimated tradable value at Eur720-740/mt ex-works Italy. The assessment, however, was left unchanged as the latest deals have been heard at Eur700-720/mt ex-works Italy.

The price decrease from current levels, however, has been questioned by some market sources as steelmakers face rising energy, transportation and emission costs.

— Maria Tanatar

South Korean steelmaker Posco has begun working with Primetals to design a 100% hydrogen-reduced ironmaking plant (HyRex), taking the first step towards its roadmap to carbon neutrality by 2050.

Kallanish learns from local media that Posco will begin plant design in August and demonstrate the commercial viability of hydrogen-reduced steel by 2030. If HyREX proves successful, it will gradually replace Posco’s blast furnace after optimisation, and help the steel mill become carbon neutral by 2050. The steelmaker aims to launch its 1 million tonnes/year HyRex plant in 2028 at the earliest.

HyREX (Hydrogen Reduction) is a steelmaking method that manufactures molten metal using iron ore fines and hydrogen, based on Posco’s FINEX fluidized reduction technology.

Hydrogen reduction steelmaking is an innovative technology that produces iron using hydrogen instead of fossil fuels, Posco says. When fossil fuels such as coal and natural gas react chemically with iron ore, they generate carbon dioxide, while hydrogen only generates water. Therefore, hydrogen reduction steelmaking can dramatically reduce carbon emissions in the steelmaking process.

Kallanish Asia