Category: Latest Updates

A cross-sector grouping of companies has set up a new consortium, GravitHy, to build a 2 million mt/year direct reduced iron plant in the south of France, with the output to be used either on-site as a feedstock to produce “green steel” or else traded globally as hot-briquetted iron, the partners said in a statement June 30.

The project, which plans to mobilize Eur2.2 billion ($2.3 billion) worth of investment at commissioning, will build its first plant in the area of Fos-sur-Mer, in southern France, with construction set to start in 2024. The consortium aims for the plant to be fully operational by 2027, subject to the required regulatory approvals, the partners added.

The company said that the new project, which will use low-carbon hydrogen to produce DRI, will support the growing demand for zero-carbon steel, while also contributing to Europe’s “Fit for 55” climate ambitions to decarbonize hard-to-abate industries.

“There is considerable appetite to transform energy-intensive industries in France, with the steel sector high on the agenda,” according to Karine Vernier, GravitHy’s consortium leader. “GravitHy will be a vital component in the French government’s proposed steel roadmap and its ambitions to cut CO2 emissions by 40% by 2030. It’s time to make a step-change in technology, to replace old blast furnaces with DRIs produced from green and low-carbon hydrogen and combined with electric arc furnaces.”

The steel sector is responsible for 8% of global energy demand and 7% of CO2 emissions — including process emissions — annually, making it one of the biggest carbon-emitting industries.

GravitHy’s founders include EIT InnoEnergy, Engie, FORVIA, GROUPE IDEC, Plug and Primetals Technologies.

Asian seaborne iron ore prices weakened June 29 as a recent price rebound lacked support from end-users. The 62% Fe Iron Ore Index was at $123.20/dry mt CFR North China June 29, down $1.80/dmt from June 28, according to the Platts assessment from S&P Global Commodity Insights.

— Annalisa Villa

Market sources expected that hot-rolled coil prices were close to the bottom June 30, with some buyers reportedly ready to return to limited purchasing once certain material would not suffer near-term devaluation.

In the Northern market, Platts assessed hot-rolled coil stable on the day, at Eur840/mt ex-works Ruhr.

Tradable value ranges were reported at Eur830-860/mt ex-works Ruhr from distribution sources. A trader source reported deals at Eur830-840/mt, achieved against offers heard around Eur850/mt, both ex-works Ruhr.

Buyers were heard as trying to achieve lower, citing offers heard at sub-Eur800/mt delivered Ruhr ex-Central Europe. However, Northern European mills were reluctant to negotiate prices at lower than Eur850/mt ex-works Ruhr, attempting to establish Eur850/mt ex-works Ruhr as a firm offer floor. Buy-side sources agreed that prices were in close proximity to a floor, with demand recovery expected in the near term for autumn orders due to restocking.

“I think prices are touching ground finally,” a service center source said. “There will be some demand recovery for September — obviously we won’t see crazy volumes or crazy prices like just after war in Ukraine started — but the second half of 2022 should be better, with market activity picking up again.”

Higher offers were also heard in the import market on the day, with offers reported at Eur780-800/mt CFR Antwerp ex-Asia by a trader source. Imported hot-rolled coil was assessed up Eur20/mt at Eur760/mt CIF Antwerp June 30.

The trader said some buyers were ready to return to the market but were reluctant to resume purchasing without certainty that material would not be devalued in the near term.

“Customers have registered interest in ordering material, but there’s still uncertainty over whether prices are truly at the bottom,” the source said. “They’re already unhappy that prices have decreased so quickly — they don’t want to repeat losses on future restocking.”

In the Southern market, achievable prices were heard at Eur730-780/mt ex-works Italy.

A trader source rejected the Eur730/mt level as unrealistic for domestic transactions, ex-works Italy, seeing tradable value higher at Eur750-780/mt ex-works Italy.

Competitive import offers were reported by traders at Eur685-695/mt CFR Italy ex-Turkey, excluding duties, with Japanese and South Korean material available at the higher end of import offers at Eur740-750/mt CFR Italy.

As in North Europe, the sentiment was that prices were close to the bottom, with distributors heard as likely to return in late July to restock for September. Mills were said to share that outlook, evidenced by a general lack of production cut announcements, against source expectations.

“This market is like slow hara-kiri,” a trader source said. “Either production needs to go down or demand up to put an end to it. Clearly, demand is an issue, and declining prices are a side effect.”

South European HRC was assessed down Eur10/mt June 30 at Eur770/mt ex-works Italy, according to S&P Global Commodity Insights data.

— Benjamin Steven, Maria Tanatar

The US released on June 30 the final list of 570 import products, including several steel and aluminum items, from Russia and Belarus that will be subject to a higher 35% tariff starting July 27, according to a Federal Register notice.

For steel products, a 35% tariff will be applied to certain powders under US International Trade Commission HS code 72052900, certain ferrous scrap and waste under code 72044900, various pipe products under 7300 subcodes and some semi-finished products under the 72071200 and 72249000 codes.

For aluminum products, several types of bar, rod, wire, plate, sheet and strip will be subject to the 35% tariff.

The duty hike also applies to some ferroalloys such as ferromanganese and ferrosilicon.

USITC HS Codes Impacted Item description
72021150 Ferromanganese containing by weight more than 4% of carbon
72022110 Ferrosilicon containing by weight more than 55% but not more than 80% of silicon and more than 3% of calcium
72022900 Ferrosilicon containing by weight 55% or less of silicon
72023000 Ferrosilicon manganese
72024100 Ferrochromium containing by weight more than 4% of carbon
72024910 Ferrochromium containing by weight more than 3% but not more than 4% of carbon
72027000 Ferromolybdenum
72044900 Certain ferrous waste and scrap nesoi
72052900 Pig iron, spiegeleisen, and iron or steel (other than alloy steel) powders
72071200 Iron or nonalloy steel semi-finished products, with less than 0.25% carbon, w/rect. cross sect. (exclud. sq.), nesoi
72249000 Alloy (other than stainless) steel, semi-finished products
various codes under 7300 Certain steel pipe products
76042930 Aluminum alloy, bars and rods, having a round cross section
76042950 Aluminum alloy, bars and rods, other than with a round cross section
76051100 Aluminum (other than alloy), wire, with a maximum cross-sectional dimension over 7 mm
76061230 Aluminum alloy, plates/sheets/strip, with thickness over 0.2mm, rectangular (incl. sq), not clad
76061260 Aluminum alloy, plates/sheets/strip, with thickness over 0.2mm, rectangular (incl. sq), clad

Source: Federal Register, US International Trade Commission

The White House first announced its intent to raise tariffs to 35% on certain products imported from Russia and Belarus in a June 27 proclamation.

“I have determined that increasing the column 2 rates of duty to 35% ad valorem on certain other products of the Russian Federation, the importation of which has not already been prohibited, is warranted and consistent with the foreign policy interests of the United States,” President Joe Biden said in the proclamation.

In a separate statement, US Trade Representative Katherine Tai said the affected products would include “steel and aluminum; minerals, ores, and metals; chemicals; arms and ammunition; wood and paper products; aircraft & parts; and automotive parts.”

The raising of “column 2” rates is tied to the US’ previous action of suspending normal trade relations with Russia and Belarus in April to escalate pressure on Russian President Vladimir Putin for the country’s invasion of Ukraine.

The US Harmonized Tariff Schedule, compiled by the USITC, outlines separate duty rates for favored trade partners (column 1 duties) and non-favored trade partners (column 2 duties).

The April removal of normal trade relations allowed the US to apply column 2 duty rates on imports from Russia and Belarus until January 2024.

For metals, column 2 duty rates reach up to 20% for finished steel, 18.5% for most unwrought aluminum, 11% for high purity aluminum, and 10.5% for some categories of value-add aluminum products.

The US may restore normal trade status with either country pending permission from Congress.

— Nick Lazzaro

The price of stainless steel in Europe fell further in the week ended Friday July 1 amid continued poor demand from distributors, sources told Fastmarkets.

Fastmarkets’ weekly assessment for stainless steel cold-rolled sheet 2mm grade 304 base price domestic, delivered Northern Europe was €1,250-1,300 (1,306-1,358) per tonne on Friday July 1, down by €50 per tonne week on week.

Meanwhile, Fastmarkets’ weekly assessment for stainless steel cold-rolled sheet 2mm grade 304 transaction domestic, delivered North Europe was €4,000-4,200 per tonne on Friday, down from €4,200-4,300 per tonne the week before.

While demand from end-users was generally described as reasonable, demand from distributors and service centers was widely said to have all but disappeared amid very high stock levels.

When nickel prices exploded in March following Russia’s invasion of Ukraine, panic set in and purchases were increased or brought forward to avoid paying even higher prices the next week, resulting in a market flush with highly-priced material.

Germany was said to be particularly oversupplied. One German distributor said it had only ordered 50% of its usual volumes for June, July and August, and that it was not facing any shortfall.

EU safeguarding measures reset on July 1, meaning material stored in warehouses can be released and adding to the oversupply. With this coinciding with the start of the traditional slow season, prospects for improved demand are slim before September at the earliest.

Asian material from counties not affected by anti-dumping duties was available at €3,400-3,500 per tonne ddp, for September delivery, sources said.

Base prices currently on offer are for September rolling and one distributor forecast September alloy surcharges to be approximately €2,600 per tonne.

“This means base prices are still too high, they aren’t competing with Asian material. And they need to, they are really struggling with the distribution business,” one distributor said. “They have room to go lower too, they’ve all had record results recently.”

Faced with such weak fundamentals, several mills are embarking on longer-than-usual maintenance turnarounds this summer.

“A lot of people expect the market to pick up again in September. Until then, it’s going to be very weak,” another distributor said.

Published by Ross Yeo

Industry experts discussed investment, business collaboration, and public procurement opportunities in steelwork and infrastructure sectors in both Portugal/EU and Canada during Portugal-Canada Steelwork / Construction / Public Procurement Opportunities Webinar + B2B Event that took place on the 29th of June.

This initiative allowed participants (construction companies, steel processing companies, contractors, consultants, public entities, and trade associations) from both Portugal and Canada to meet online and to discuss potential business collaboration opportunities, current R&D projects, new industry trends, implementation of innovative technologies, as well as, exchanging information about various steelwork/infrastructure projects on both continents.

In this weblink you can find and download the presentations of the event.

European domestic steel sections prices continued to soften in the week to June 29 as buyers held back from booking orders, expecting prices to move down further.

Platts’ European medium sections price (category 1, S235 JR) assessment was at Eur1,240/mt delivered June 29, down Eur60/mt week on week.

One Benelux-based distributor source put a tradable value for beams around Eur1,180/mt delivered, adding that purchasing activity was still halted as customers continued to hold back, expecting prices to move down further. Mills were also not reporting any sales, the source noted.

Another distributor in the Benelux region noted that tradable value for category 1 medium sections was around Eur1,180/mt delivered Benelux.

“I think there is demand, but people are waiting until they need the material because they think prices will move down,” he said, adding, “Mills are also under pressure because order books are not good.”

The source reported that most mills were scheduled to go on maintenance breaks after mid-July for one month.

“Everyone is talking about very low prices, but there are no transactions in the market,” one European mill source said, adding that the market was hearing levels around Eur1,180/mt delivered, but those seemed more like buyers’ targets. He also reported that the mill sold small tonnages around Eur1,340/mt delivered, adding that the general workable level in the market seemed to be around Eur1,300/mt delivered.

Elsewhere, Northwest European domestic rebar prices also softened in the week to June 29. S&P Global Commodity Insights’ assessment of Platts’ TSI Northwest Europe Rebar was down Eur65/mt to Eur1,020/mt ex-works June 29.

One European trader noted that offers in Germany for rebars were reportedly as high as Eur1,080/mt delivered. One Benelux-based distributor source indicated a tradable value at Eur1,045/mt delivered Benelux. One Italian mill source indicated workable levels in Germany around Eur1,030/mt delivered, adding that the mill was offering rebars to German customers around Eur980/mt delivered.

One seller source, however, noted that realistic workable levels for rebars in the Northwest European market were around Eur1,030-Eur1,040/mt delivered.

— Rabia Arif, Staff

European producers tried to avoid domestic hot-rolled coil price cuts on June 29 despite weak demand from both end consumers and distributors, sources said.

Platts assessed HRC in Northern Europe at Eur840/mt ex-works Ruhr, unchanged day on day, according to data from S&P Global Commodity Insights.

HRC prices targeted by the Northern European steelmakers have been reported at Eur850-880/mt ex-works. Transactions have been settled between local producers and buyers at Eur840-850/mt delivered. Deals for Italian HRC have been reported at the equivalent of Eur840-850/mt ex-works Ruhr. Achievable prices have been heard at Eur830-850/mt ex-works.

Buyers in the region have been nodding at Eur800/mt ex-works level for HRC. Such prices could only be achieved in special deals settled at Eur800-850/mt ex-works that do not reflect the market level, a mill source said.

Offers of HRC from Central European mills have been reported at Eur780-790/mt delivered Ruhr.

Weak flat steel demand across Europe were caused by a combination of high stocks of distributors, logistics problems in ports, and lower steel demand from end consumers, including the automotive segment.

Negative trends settled in the European market have also continued to buyers’ decisions to avoid purchases, as they believe that prices could drop further.

HRC in Southern Europe was assessed at Eur780/mt ex-works Italy June 29, stable on tje day.

Offers and tradable values have been reported at Eur780-800/mt ex-works Italy.

As a result, European mills have been avoiding discussing prices unless they were sure that the negotiations would end up with a deal, and they also tried to maintain prices stable, as offer cuts failed to stimulate buyers’ interest in the past. Demand, however, might pick up in mid-July when distributors will start restocking for September, a producer said.

“There is no point for mills to cut prices now, that would not make buyers to make deals,” the producer said. “Prices are not the issue now, demand is. And the truth is that the end users are inactive, and they do not consume much; and distributors have a lot of material in stocks.”

As a result, transactions remained scarce in the European HRC market, and market participants have been struggling to determine actual market price due to low number of deals.

“There are almost no transactions in the market, so very difficult to tell if any of the sporadic deals done for very specific coil to restock is an actual market representation,” a trader said. “Mills try not to actively offer, as that only results in higher number of bids, price discussions and price decline without any volumes traded.”

Adding uncertainty in the market, some steelmakers were reported adding clauses in their contracts that would allow them to either increase coil prices retroactively or to cancel orders in case of natural gas supply disruption from Russia.

Import offers of HRC in Northern Europe have been reported at Eur740/mt CFR Antwerp. Additionally, Turkish material has been available to Southern European buyers at Eur700/mt CFR Italian ports, including anti-dumping duties. Despite competitive price interest overseas, coil has been limited due to long lead times compared to the domestic mills and due to risks related to safeguard measures and problems in the EU ports.

— Maria Tanatar, Benjamin Steven

Energy and ferrous scrap supply are at the top of the agenda for the Italian steel association Federacciai, the association’s new president, Antonio Gozzi, told S&P Global Commodity Insights June 29, the first day of his mandate.

Gozzi is replacing Alessandro Banzato as president until 2024, and this is his second time at the helm after serving as president over the 2012-2018 period. He is also the chairman and CEO of Duferco Italia Holding, a company active in steel production, energy, engineering, logistics and shipping.

“Italy is the second-largest European steel producer and is very much unique as 80% of its crude steel output is produced via electric furnace, which means its steel is mostly green, but it also means that the industry needs to have a lot of energy and scrap,” Gozzi said.

“My priority will be to be focus on working on new green energies contracts, looking into new contracts from renewable energies as well as from nuclear sources from outside Italy.”

Italian steel producers are facing high energy costs after Russia’s invasion of Ukraine.

“I am working also to stabilize energy prices as we have created a consortium for scouting for the possibility to build some direct reduced iron plants outside of Italy, where gas is cheap,” Gozzi said.

Familiar with energy industry

Gozzi is familiar with the energy industry, as he is also president of Interconnector Energy Italia, a consortium of high-energy-use private Italian based companies, and through his work with the University of Genoa as an associate professor on issues relating to industry, energy and shipping.

“I will be also focusing on trying to keep scrap inside our borders,” he said.

According to Eurostat, Italy imported 6 million mt of scrap in 2021 from European countries and exported 600,000 mt. Overall, European countries exported 49 million mt of scrap and imported 37 million mt.

“To achieve the European Commission’s CO2 reduction target, some blast furnace-basic oxygen furnace steelmaking in Europe is expected to be converted to electric arc furnace production, a move that will make scrap even less available and more important, so we have to act together with European partners to keep our important raw materials within the border,” Gozzi said.

Scrap as critical raw material

In March 2022, Italy classified scrap as a critical raw material for the first time and its export is subject to a notification obligation 10 days before to be exported toward a first step to recognize scrap as a strategic resource.

In 2021, Italy increased crude steel production by 19.8% to 24.41 million mt amid strong demand for both long and flat products, surpassing 2019’s 23.192 million mt, which was the last full year before the pandemic.

“In 2021 we saw a rebound from such a low level reached due to all the COVID restrictions,” Gozzi said.

“I think this year the demand is still very good, but not as much as last year, when it was very much an extraordinary year,” he said.

Turkish deepsea import ferrous scrap prices were unchanged on the day June 28, as sellers raised offers and buyers remained hesitant amid slow finished steel demand, sources said.

Platts Turkish imports of premium heavy melting scrap 1/2 (80:20) was assessed June 28 at $332.50/mt CFR, unchanged on the day.

— Annalisa Villa

International trade secretary Anne-Marie Trevelyan told the UK House of Commons June 29 that the UK government had made a “final” decision to extend the nation’s steel import safeguards for a further two years “in the national interest,” despite this possibly breaching World Trade Organization rules.

“These are unusual times,” Trevelyan told parliamentarians from various political parties, who were generally supportive of protecting UK producers as they invest in decarbonization. She cited “persistent global overcapacity” and “a threat of serious injury” to UK producers should the safeguards not be prolonged.

Safeguards using quotas and tariffs will therefore be extended on imports of products from 15 categories from July 1 until June 30, 2024, after which time they can no longer be extended, the trade secretary said. The extension on five of these product categories is controversial, as the government had originally said it would phase out these controls June 30: the further extension is moreover seen to target products coming from certain developing nations and particularly China.

“The government wishes to make it clear to Parliament that the decision to extend the safeguard on the five product categories departs from our international legal obligations under the relevant WTO agreement, as relates to the five product categories,” Trevelyan told the House of Commons. “However, from time to time, issues may arise where the national interest requires action to be taken which may be in tension with normal rules or procedures.”

International consultations are “ongoing”

The UK trade department clarified in an email that “the final decision on the steel safeguard has been made. International consultations are ongoing. The most up-to-date data has been used in determining the tariff rate quotas, including on the developing country exemptions.”

Trevelyan noted that she has been and continues to be in consultations with the WTO on the matter and that she “stand(s) ready to take up any concerns.”

The WTO declined to comment when S&P Global Commodity Insights contacted it June 29.

Categories

The five product categories that will be granted a further extension are category 6, tin mill products; 7, non-alloy and other alloy quarto plates; 12, merchant bars and light sections; 16, non-alloy and other alloy wire rods; and 17, angles, shapes, and sections of iron or non-alloy steel.

Following consultation with downstream users who have raised concerns about product sourcing, Trevelyan, however, said she had enlarged the tariff rate quota on category 12a.

The 10 categories on which the safeguards extension had already been expected are 1, non-alloy and other alloy hot-rolled sheet and strip; 2,non-alloy and other alloy cold-rolled sheet; 4, metallic coated sheet; 5, organic coated sheet; 13, rebar; 19, railway material; 20, gas pipe; 21, hollow section; 25, large welded tube; and 26, other welded tube.

Trevelyan also said the government has decided to suspend the safeguard measure for steel goods coming from Ukraine for the next two years. This follows an earlier removal of all tariffs under a UK-Ukraine trade accord to support Ukraine’s economy in the wake of Russia’s invasion of that country.

Steelmakers’ association UK Steel welcomed the trade secretary’s statement, saying it will give UK steelmakers “the stability required to plan, invest and work with the government on the major challenges we now face—not least the decarbonization of the industry.”

The association recently estimated that weakening the controls could bring damages of GBP150 million ($184 million) to the UK steel industry amid continuing global market distortions.

“The decision to maintain the UK’s steel safeguard in full once again shows that the government is backing Britain’s steel industry,” commented UK director general Gareth Stace.

Platts assessed steel hot-rolled coil in Northern Europe at Eur840/mt ex-works Ruhr, unchanged day on day, according to data from S&P Global.

European producers tried to avoid domestic HRC price cuts June 29 despite weak demand from both end consumers and distributors, sources said.

New steel trade deal with the US

The UK steel safeguards system had been under review since late 2021. It mirrors the EU safeguards system, put in place in mid-2018 in response to the US’s imposition of Section 232 import tariffs of 25% on steel imports in March 2018. The EU recently renewed its steel safeguards until mid-2024.

Trevelyan, however, also noted that the UK government has recently secured “an expansive removal of Section 232 tariffs on imports of UK steel and [aluminum] products into the USA, which came into effect earlier this month. The tariff-free volumes we have secured mean that UK steel and [aluminum] exports to the US can return to levels not seen since before 2018.”

UK industry is partly dependent on imported steel, as it produces only around 70% of its annual requirement of around 10.2 million mt crude steel, according to UK Steel.

— Diana Kinch

Outokumpu says it will divest two plate service centres, in Italy and the Netherlands.

In the Netherlands, the company is selling its Aalten unit to Roba Metals, a family-owned business. The deal should be closed by the end of September. Outokumpu will thereafter continue to supply plate produced at Degerfors to the unit, Kallanish notes.

“The divestment does not affect our other coil and plate operations in Europe. We continue to work together,” says Outokumpu’s Antti Maununiemi.

In Italy, the Castelleone plate service centre is being taken over by the Mariotti stainless steel group, the biggest costumer of Outokumpu in Italy. Outokumpu’s other coil service centre in the same area will remain under the group’s control.

“Mariotti is looking to complete their offering on the market and in special products. For Outokumpu, Mariotti has been a very good customer of ours, and the cooperation continues with Outokumpu as a supplier and Castelleone service centre as a part of our customer’s operations. We are glad to have found Mariotti Group as the best owner to further develop the business in Italy,” says Marc-Simon Schaar from Outokumpu.

Emanuele Norsa Italy