Pig iron prices continue rising, trade sparse

Merchant pig iron trading activity in the Black Sea export market was focussed narrowly on the Mediterranean and wider European markets in the past week, with limited trading volumes.

The past week has brought no US trade to either CIS or Brazilian suppliers, as US buyers continue to reject offer indications. These remained flat on-week from CIS suppliers, but increased quite considerably from Brazil.

Brazilian suppliers were heard indicating offers at $575-590/tonne fob in the past week, with some sources reckoning one sale took place at $620-630/t cfr. This could however not be confirmed at the time Kallanish went to press.

CIS suppliers’ offer indications were up to a rather wide $600-630/t cfr, but no trade was possible as US buyers look set to continue waiting with purchasing until after the domestic May scrap price settlement. As this is expected to be upwards from current levels, market sources foresee some CIS offers being finally accepted.

Meanwhile, small lots of CIS pig iron continued to be traded to Europe and Turkey at $590-595/t cfr, and $620/t cfr for semi-nodular material. Current levels of demand have supported a $10-15/t price rise on-week. 

China’s plans to reduce exports of finished steel and increase imports of semi-finished steel and metallic products suggest there could be another surge in demand from China, eventually, but this is not expected imminently. Most likely, this demand will come, if at all, towards the fourth quarter, when restrictions are likely to intensify, sources say.

As prices continue to rise, the volume of formula-based long-term contracts outside the spot market has also increased, as buyers and sellers aspire to manage volatility. This trend may also intensify in the coming year, as volatility is unlikely to subside, and will depend a lot on China’s metallics buying.

Katya Ourakova UK

EU importers pay safeguard duties for Indian HRC

EU importers have been paying safeguard duties on Indian hot rolled coil cleared at customs since the end of last week after quotas were quickly exhausted.

Traders confirm the first safeguard duties were paid by importers clearing material on 23 April. That day, the average quota paid was 8%. Since then, any new HRC from India cleared until end of June will face a 25% duty.

“Most buyers with material waiting to be cleared are now doing it slowly, only selecting the material they need urgently,” a trader tells Kallanish. If new quotas are confirmed from the beginning of July, it is likely they will be completely used during the first days of the month.

“We need to keep in mind, nevertheless, that Indian HRC currently at docks in Europe was ordered in January, mainly, meaning even a 25% duty will make them competitive with today’s new offers from domestic mills and importers,” the trader adds.

Currently, new Indian-origin offers are not competitive, similarly to Turkish HRC prices, which are also levied with anti-dumping duties. Some offers of HRC from Asia have been reported this week at €900-920/t ($1,090-1,114) cif Europe, Kallanish understands, but delivery would be at the end of the third quarter.

Emanuele Norsa Italy

ArcelorMittal continues EU coil offer increases

ArcelorMittal has informed customers this week of yet another new offer increase for coil in the European market, Kallanish learns from sources.

Hot rolled coil is now being offered at €1,020/t ($1,236) ex-works base in northern Europe, while cold rolled and hot-dip galvanized coil offers are also increasing, to €1,200/t ex-works base.

The previous offer increase was announced only a week ago. Demand remains well above supply and buyers are forced to accept price hikes to secure enough feedstock. Coil users are suffering due to long delivery times from European mills and a scarcity of import options in the market (see related article).

Emanuele Norsa Italy

Saarstahl, Dillinger syngas-hydrogen pilot plant to operate by mid-year

German steelmakers Dillinger and Saarstahl will start operating a syngas-hydrogen-based pilot plant by mid-year in cooperation with engineering company Paul Wurth in a move that could cut carbon emissions by 12%, the two sister companies said April 29.

The pilot plant currently in construction will use gas produced in the coke oven of the steelmakers’ Rogesa subsidiary and convert it to syngas, enriched with hydrogen and then used as a reducing agent for the reduction of iron ores. The syngas will then be injected into the blast furnace, which should lead to a “significant reduction in coke consumption and thus to a reduction in carbon emissions.”

“The use of process gases for metallurgical purposes makes it possible to cut carbon emissions by up to 12%,” said Karl-Ulrich Kohler, chairman of the management board of Dillinger and Saarstahl. “By using hydrogen, we can further improve and actually nearly double the potential reduction of carbon. The creation of an adequate energy infrastructure is a precondition for this.”

Once the pilot plant is operational, the next project phases will be developing the process to semi-industrial and later to industrial scale with support from public funding with the aim to produce large quantities of synthesis and inject them into a blast furnace.

The project “H2Syngas” is part of a cross-border hydrogen project in the Saar region.

In a report this week, the Energy Transitions Commission said it identified the steel industry as an area where hydrogen application is likely to develop over the longer term “as the relevant application technologies develop and capital assets are replaced.” By 2050, hydrogen could account for 50% of the final energy demand in the steel sector, it said.

The report, Making the Hydrogen Economy Possible, said that, in the shorter term, hydrogen could be co-fired with coal in blast furnaces.

“Using hydrogen as the reduction agent rather than coking coal may increase steel prices by 40%,” it said, but added that the “green consumer premium” would be much less significant in finished products, adding less than 1% to the cost of a vehicle built with 1 mt of steel.

In addition, the ETC highlighted that constraints on the location of hydrogen production facilities could lead to changes in optimal locations for steel plants. Industrial clusters around a set of linked hydrogen infrastructure would be one such model, the commission said.

— Laura Varriale, James Burgess

Strong demand, prices support Erdemir’s sales and profit

Globally strong demand and prices supported the output and sales of Turkey’s largest integrated steelmaker, Erdemir, in the first quarter, while the company’s profit soared.

Erdemir sold 1.81 million mt of flat products in Q1, up from 1.66 million mt sold in Q1 2020.

While the group’s flats sales to the domestic market were up by 9% in the period to 1.6 million mt, its total long product sales to the domestic market fell 23% on the year to 205,000 mt. Erdemir Group exported 213,000 mt of steel in Q1.

The group’s crude steel output totaled 2.31 million mt in January-March, up 3% on year. The group produced 889,000 mt of crude steel at its Eregli steelworks in Q1, down 6% year on year, while its larger Iskenderun works (Isdemir) produced 1.42 million mt, up by 8% on year.

The group’s Q1 revenue reached Lira 10.5 billion ($1.3 billion), up 64% on year, while the company’s income totaled Lira 2.62 billion, up from Lira 300 million registered in the same period the previous year.

The company’s Eregli steelworks produces hot-rolled, cold-rolled and galvanized coils, plate and tinplate, while Isdemir produces billet, wire rod and hot-rolled coils with a total crude steel production capacity of 9.1 million mt/year.

— Cenk Can