Category: Latest Updates

The European Commission is believed to prepare an investigation into hot-dipped galvanized coil imports with Turkish and Russian origin, sources told S&P Global Platts June 11.

An Italian supplier told Platts they received a notification letter from the EC on the matter on June 11.

Market chatter on a possible investigation of HDG imports on Turkey that could lead to anti-dumping duties have been circulating since February, with sourcing saying June 11 that producers had received the EC’s letter.

The EC did not immediately respond to a query for comment

Sources told Platts they were surprised Russia would be a target in the investigation with only one mill there, Severstal, believed to be exporting to Europe regularly. That company did not respond to Platts’ request for comment.

Austrian steelmaker Voestalpine, meanwhile, said it could not comment on the matter before June 14, while another mill source said they could not say anything before the EC made an investigation public.

The Platts weekly assessment for hot-dipped galvanized stood June 9 at Eur1,305/mt EXW Ruhr, up Eur5/mt on the week. European suppliers have been heard booked into late Q4 this year, early Q1 next year with limited material available to buy from European suppliers.

Turkish response

The Turkish Steel Producers’ Association told Platts they have not received any information on an investigation. “We have focused on EU Commission decision on extension of the steel safeguards,” Veysel Yayan, general secretary of the group. “We heard the Commission will announce their decision next week.”

An export manager of Turkish coated coil producer told Platts: “We have also heard these rumors. They will probably start an investigation against HDG imports from Turkey, following the extension of the safeguards.”

According to trade data published by European steel federation Eurofer, 315,378 mt of Turkish origin and 114,559 mt of Russian origin hot-dipped coils have been imported into the EU the first three months of 2021 out of a total of 1.17 million mt hot-dipped imports in the period.

Spain and Italy were the main buyers of Turkish material in that time period, with Belgium and Latvia were the main takers of Russian material this year so far.

Eurofer declined June 11 to comment on the possible investigation.

— Laura Varriale, Cenk Can, Diana Kinch

Turkey’s industrial production index jumped year on year in April, while the export climate index reached a 15-year high in May.

Turkey’s seasonal – and calendar – adjusted industrial production index in April rose by 66% on year, while the manufacturing sector index emerged as the driving force behind Turkey’s total industrial production, according to the latest Turkish Statistical Institute (TUIK) data June 11.

When the subsectors of the industry (based on 2015=100) were examined, the manufacturing index increased by 72.3%, mining and quarrying index increased by 25.5% and electricity, gas, steam and air conditioning supply index increased by 26.6% in April, compared with same month last year.

Recording the highest level in the last 15 years, the Turkey Manufacturing Export Climate Index, compiled jointly by IHS Markit and the Istanbul Chamber of Industry, meanwhile rose from 56.0 in April to 58.4 in May. The index has been running above the 50.0 threshold for the fourth month in a row.

Key export destinations of Turkey such as the UK and the US, accounting for 13% of Turkish manufacturing exports, recorded rising economic activity in May and signaled improving demand for Turkish goods.

With the support of the strong rise seen in industrial output in Turkey, steel consumption in the country jumped 111.5% on year to 3 million mt in April, while Turkish mills’ steel exports rose 35.4% on year to 1.6 million mt.

Turkish mills’ crude steel production rose 46.6% on year to 3.3 million mt in April, according to Turkish Producers’ Association (TCUD) data sent to S&P Global Platts.

— Cenk Can

Dans le magazine, vous découvrirez non seulement de belles réalisations en acier, mais des sujets tels que la sécurité incendie et la construction circulaire seront également présentés.

Vous préférez lire le magazine en ligne? Vous pouvez le faire via ce lien.

Following months of chasing and securing material at any cost, players in the northwest European coil market are seeing the pressure relax somewhat, although this does not mean a turn in price trend.

“The panic purchasing of recent months has waned,” one Ruhr-based stockholder tells Kallanish. “Consumers are much more relaxed now, and more cautious with placing orders. I just talked to a mill on that matter, and they see it like that, too.”

One crucial factor, he points out, is the slowdown of production at carmakers, due to the shortage of semiconductors. German automotive association VDA, in its monthly update, noted that OEMs are by no means utilised to the level they would wish to be. “BMW is reducing production, Mercedes too, and I heard of Volkswagen in Mexico,” the stockholder says. “This means lower steel consumption, which the market will feel.”

Other players share the impression that the “hype” is abating, but are not so sure if the movement of prices is coming to a stop. A buyer in southern Germany notes that spot volumes for the third quarter are becoming increasingly available from southern and Eastern Europe. This, however, does not apply to the northwest EU mills and their lead times stretching way into the fourth quarter, another buyer from central Germany notes.

Both agree that the latest price target announcement from ArcelorMittal – €1,170/tonne ($1,304) for hot rolled coil and €1,300 for cold-rolled and galvanized – remains the mark of orientation for domestic mills. The latter buyer does not rule out that prices could still inch up further, but much more modestly now.

Against that, the Ruhr-based manager says he and his customers are not making any more plans that are based on the assumption that mills’ prices are still rising. Also, he sees transaction prices in his region for HRC at the friendlier level of €1,120-1,140/t.

Christian Koehl Germany

The UK Trade Remedies Authority (TRA) has published its final recommendation on steel safeguard measures. As in the preliminary decision last month, ten products are proposed to see safeguard measures extended for a further three years, with nine slated to be revoked. However, the composition of the products has changed.

UK trade secretary Liz Truss will now decide whether to accept the TRA’s recommendation or to reject it. The current measures expire on 30 June, Kallanish notes.

Categories recommended for extension represented 37% by volume – around 3.9 million tonnes – of average UK steel and iron imports between 2017 and 2019.

The nine products to be revoked represented 18% or 1.9mt of imports. For eight of them, there was no major increase in imports. On stainless steel rod, TRA received evidence a safeguard continuation would hinder the growth of downstream industries which use these products and would face increased costs if imports exceeded the allocated quota. The only known UK producer of stainless wire rod is supportive of the measure being revoked for this reason, TRA says. The initial recommendation to extend the measure was therefore reversed.

Category 25 – large welded tubes, used among other things for offshore wind-farms and in the energy sector – was originally set to be revoked. Having assessed further comments and evidence on this category, TRA has recommended it should now be extended.

TRA also recommended liberalisation of the measure by 3% per year over the three years, increasing the levels of each of the allocated Tariff Rate Quotas. This will ensure the measure balances the needs of UK steel producers and those who use steel products, the authority observes. At the end of the three-year extension, the TRA would consider whether another extension review is necessary.

TRA’s proposal received numerous objections from foreign governments. South Korea said the extension of safeguards by the UK violates the General Agreement on Tariffs and Trade (GATT) 1994 and the WTO Agreement on Safeguards. The UK should immediately terminate safeguards, it added, or, in the case of extending them, only do so for one year.

Turkey also said the extension violates GATT 1994 and the WTO agreement, as well as “relevant WTO jurisprudence due the lack of … prerequisites of a safeguard measure”.

Switzerland meanwhile said transitioning the EU safeguard measures “without prior investigation, notification and adequate opportunity for prior consultations is inconsistent with the United Kingdom’s obligations under the new Trade Agreement between Switzerland and the United Kingdom”.

Brazil added that measures should be immediately terminated, and their extension “could entail suspensions of concessions to the trade of the UK by all Members adversely affected by the measure”.

Adam Smith Germany

The European Commission (EC) has notified EU member states as well as the WTO of its intention to prolong steel safeguard measures for three years beyond 30 June,Kallanish learns from a WTO document.

In its determination following the safeguard review, the Commission found evidence that the measures continue to be necessary to prevent or remedy serious injury or threat to EU steel industry.

The proposal must be voted on and confirmed by member states; it is nevertheless not expected that significant changes will be made to the final measures.

According to the EC proposal, a relaxation of tariff-free quotas of 3% annually would be implemented during the 2021-2024 period. A review of how the measure is working would be carried out before the end of June 2022.

Consultations on the proposal are set to take place between 14 and 18 June.

Emanuele Norsa Italy

The EU will extend the safeguard measures on imports of steel products for another three years, maintaining the product scope unchanged and allowing for a 3% annual liberalization of the tariff-rate quotas, according to an official notification sent to the WTO and released June 11.

The current safeguards system, which has governed imports into the EU since 2018, following an import surge, was due to expire on June 30 after three years in operation.

Provisional safeguard measures have been in place since July 2018 following the US’ decision in March of that year to implement a 25% import tariff on steel under Section 232.

European mills had urged the European Commission to extend the safeguard measures while steel consumers have voiced opposition to the tariffs amid high prices and tight availability in the European steel market.

Separately, the UK Trade Remedies Authority on June 11 recommended the continuation of import safeguards on 10 categories of steel products, ranging from railway materials to stainless-steel bars, based on tariff rate quotas for three years, and to revoke import curbs on a further nine product categories.

The UK secretary of state for international trade must now decide whether to accept or reject the recommendation, which envisages a progressive annual liberalization of the quotas used over the three years on the controlled products.

— Justine Coyne

The European Automobile Manufacturers’ Association (ACEA) says it is disappointed by the European Commission’s proposal to extend safeguard duties by three years beyond 30 June (see related article). The move disregards the interests of downstream users of steel amid acute automotive steel shortages, it adds.

These shortages have led to a slowdown in manufacturing, requiring “constant crisis management of orders” to avoid complete assembly line stoppages, the association comments in a note seen by Kallanish. Meanwhile, prices continue to surge to record highs in the European market, with producers now charging up to €1,300/tonne ($1,578) for automotive steel grades.

Carmakers source over 90% of their steel in the EU, but the safeguard measures limit their ability to balance the domestic material shortage through imports, acting as a lid on an already over-heated market, the association says.

“While the Commission does propose an expansion of the quota for certain automotive grades, the increase is so marginal that it will make no difference to the scarcity of supply or to the inflationary effect of the safeguard,” it adds.

ACEA director general Eric-Mark Huitema laments: “In a market where EU steel producers are dictating prices and reporting record earnings, the idea that domestic steel is under threat of serious injury from imports is scarcely credible. We need imports to fill supply chain gaps. If this proposal is approved by member states in its current form, then the market situation will remain critical for automobile manufacturers for the foreseeable future.”

The European Commission is yet to make a final announcement on extending the safeguard measures. Last week it notified EU member states as well as the WTO of its intention to prolong the measures. According to the EC proposal, a relaxation of tariff-free quotas of 3% annually would be implemented during the 2021-2024 period. Consultations on the proposal are set to take place between 14 and 18 June.

A European steelmaker source suggests the three-year extension, if confirmed, would be a time-saver to avoid having to go through the same process again in 2022. The 3% quota increase would raise tariff-free quota levels even higher above the record import years upon which it was based, he added.

Adam Smith Germany

The Commission has notified the WTO of its intention to renew the steel safeguards for a period of 3 years until June 30, 2024

The notification is attached.

Long steel producer Celsa France and Intersig France, a subsidiary of the Van Merksteijn International Group (VMI Group), the largest European independent manufacturer of steel wires, have signed a commercial agreement to supply the French rebar market, the two companies said June 10.

Celsa will supply wire rod from its Bayonne, France, mill to VMI Group for processing, the group’s French unit, VMI Atlantic, said in a statement. VMI Atlantic is installing new stretching lines to process the rebars into rebar on coils under the registered name “Flex Wire,” it said.

Celsa in Bayonne has one electric-arc furnace with a capacity of 1.2 million mt of crude steel. It also has a billet rolling line and will add a wire rod rolling mill in the next couple of months, Celsa said in its own statement. Celsa France plans to start production at its new rolling mill, which will have a production capacity of 550,000 mt/y, before the end of the current financial year, and thus start supplying both Intersig France and the rest of its French customers, Celsa said.

The agreement will increase vertical integration along the supply chain in France and will boost supplies of locally manufactured and supplied steel, Celsa said.

According to market sources, apparent and real demand for rebar and wire rod is strong across Europe as supply is limited, in particular for rebar in coils, also due to the safeguards put in place by the European Commission that are limiting the imports of products into the EU.The Platts weekly Northern EU rebar benchmark has increased Eur245/mt since end-2020 to Eur790 ex-works on June 4, the date of the latest available data.

“With this alliance the Group culminates in time and form, in an environment of maximum difficulty due to the pandemic, the Strategic Plan 2017-2021 thanks to the start-up of the rolling mill, its main industrial objective, whose construction has meant a total investment of Eur60 million,” Celsa Group Chairman and CEO Francesc Rubiralta said.

Van Merksteijn Group is a family-owned company based in the Netherlands whose portfolio includes wire in coil, reinforcement mesh (including ECO and ECO+ mesh), lattice girders, spacers and fencing products. The group has a total rod processing capacity of 2.3 million mt/year with its subsidiaries in Almelo, the Netherlands; Dendermonde, Belgium; and Saint-Pourçain-sur-Sioule, France. VMI’s mill in Saint-Pourçain-sur-Sioule has a rebar in coils capacity of 60,000-70,000 mt/year, while the mesh plant will have a capacity of 50,000 mt/year.

Celsa Group is Europe’s largest rebar producer and is the largest recycler in Spain and the second-largest in Europe, recycling 8 million mt/year of ferrous scrap. The group’s activity accounts for up to 1.3% of Spain’s industrial GDP, 0.7% of its exports in the industrial sector and 9.9% in the metallurgical sector.

— Annalisa Villa