Hungary’s flat steel producer Dunaferr restarts hot strip mill

Hungary’s sole flat steel producer, Dunaferr, has restarted hot strip mill that was idled since December 2022, according to UK-registered Liberty Steel which operates the Dunaferr plant and distributes its output in compliance with the agreement the two signed in February.

The steelworks will start providing its customers premium rolled products later in March, Liberty Steel said to S&P Global Commodity Insights in an email March 20.

“We have signed an operational and commercial agreement with the Dunaferr plant in February to help stabilize its operations,” a spokesperson for Liberty Steel told S&P Global but declined to specify for how long the arrangement will remain in effect.

The restart of hot strip mill follows the February resumption of 660,000 mt/year blast furnace no 2, the basic oxygen converter shop and cold rolling operations, S&P Global reported earlier.

Last month, Liberty also secured a deal with the Hungarian state allowing it to draw a credit line in state-owned EXIM Hungary in order to restart and stabilize operations at Dunaferr, S&P Global reported.

A municipal court in Dunaujvaros ordered the liquidation of Dunaferr, with the steelworks, including its two blast furnaces with a 1.2 million mt/year combined capacity, previously idled since the third quarter 2022, S&P Global reported earlier.

In February, Hungarian Prime Minister Viktor Orban said the government would pay the wages of Dunaferr’s workers for the next six months, during which, it would expect to find a new owner for the plant.

Platts, part of S&P Global, assessed domestic hot-rolled coil prices in Northwest Europe at Eur850/mt ex-works Ruhr March 17, and those in south Europe at Eur820/mt ex-works Italy, both stable on the day.

— Ekaterina Bouckley

Italian steel market confronts pickled coil shortage

Availability of pickled coil, particularly of higher thickness, has been significantly below normal in Italian market, sources told S&P Global Commodity Insights in the week to March 20.

Technological issues on one of Arvedi’s lines and low water levels affecting production at Delna site, owned by CLN, are behind the shortage.

“Supply of pickled and oiled coil in Italy is generally tight, and any issues causing production to drop immediately hit the market,” an Italian trader said.

Arvedi has had technological issues on its push-pull pickling line for processing of coil with 8-12 mm thickness, and the line has been stopped, a source close to the mill said. The company did not respond to S&P Global’s requests for comment.

The Delna plant is having “full revamping of one pickling line processing thicknesses over 6 mm, and low levels of water in lakes and rivers are affecting production,” the source from the company said.

An Italian distributor said Delna can’t offer “from 6 mm and up because of lack of water issues,”

Delna’s pickling line that can process coil with thickness from 1.5 mm to 15 mm has a capacity 450,000 mt/year. Another line that processes coil from 1.4 mm to 7 mm has capacity of 400,000 mt/year.

As a result, the premium for pickled coil over dry HRC increased to about Eur40-50/mt from around Eur20-30/mt, according to market sources.

Platts assessed domestic prices for hot-rolled coil in South Europe at Eur820/mt ex-works Italy March 20.

— Maria Tanatar

EUROMETAL Steel Net Forum Iberia: EU steel production growing slower than GDP

Although the forecast for steel production and consumption in the EU is positive for this and the coming years, according to Professor Roland Dohrn from the University of Duisburg-Essen, who shared his presentation at the EUROMETAL Steel Net Forum Iberia, in Porto, Portugal, on March 17, it still has chances for a downward revision. At the same time, the EU GDP forecast for 2023 has been revised downwards compared to last year, while 2024 will see higher results “because after a bad year there is always a catch-up”, according to Professor Dohrn.

More specifically, while steel production worldwide fell by 4.3 percent to 1.83 billion mt, steel production in the EU fell by 10.5 percent year on year, to 136.7 million tons in 2022, according to the WorldSteel Association. Meanwhile, it is worth mentioning that last year the situation in the European steel industry was affected by the high prices for energy, the high volatility of prices and demand, which were mainly caused by the military aggression of the Russian Federation against Ukraine. This year, however, according to representatives of the sector, the challenge from energy prices has lost its power somehow, but the war in Ukraine will continue to affect the world and Europe as well as it has a strong impact on the food sector, and inflation in the EU is highly dependent on this sector. In particular, the inflation rate in Europe is forecast to drop by 5.5 percent in 2023, while in 2024 it may show a two percent recovery.

In 2022, all the leading European steel producers reduced their production last year, including Germany, down by 8.4 percent, Italy down 11.6 percent, France down 13 percent and Spain down by around 19 percent. At the same time, this year, according to EUROFER, production of steel may drop by 0.6 percent and may increase by 1.8 percent in 2024, while EU GDP is likely to increase by 0.1 percent and 1.9 percent, respectively in 2023 and in 2024. “Production of steel mills grows slower than GDP in the EU,” Professor Dohrn said. Meanwhile, following a 4.6 percent drop in apparent steel consumption in 2022, this year it is forecast to decrease by 1.6 percent and to rebound by 1.6 percent next year.

Apparent steel consumption grew slower than production of steel given the lower steel input per produced unit in some sectors like electric vehicles. Besides, the EU has been witnessing changing production patterns within sectors; for example, thermal isolation of existing houses needs less steel than new buildings.

At the same time, in terms of end-user demand, in the construction sector, which has a 35 percent share in total steel consumption, it is expected to drop by 1.6 percent year on year in 2023 but to increase by 1.6 percent next year. End-user demand in the automotive sector, which has an 18 percent share in total steel consumption, is forecast to increase by 1.1 percent compared to last year, but to drop by 0.6 percent in 2024, according to the presentation made by Juan Mañá Herranz from ArcelorMittal Spain.

German scrap exports hit lowest level since 2009

Ferrous scrap exports from Germany decreased significantly in 2022, show data from the German federal statistics office.

In January-December, shipments totalled 7.7 million tonnes, down 14% on 2021, Kallanish notes. This was the lowest export volume since the economic and financial crisis of 2009, say local experts.

In the preceding years, 2016 to 2021, annual exports differed only minimally, between 8.6mt and 8.8mt, Kallanish gathers from an overview issued by steel federation WV Stahl.

Despite the sharply reduced trade volume, the export value of scrap exports increased. According to German Federal Statistical Office (Destatis) data, this amounted to €4.9 billion ($5.2 billion) in 2022, compared to €4.5 billion in the previous year.

The main target country is traditionally the Netherlands, but exports to this destination fell even more significantly, by 17.8% to almost 1.6mt, according to recycling federation BVSE. To Italy, the second-largest buyer country, 12-month exports dropped by 13% to 1.46mt.

Turkey is the most important customer outside the EU. German direct exports here totalled 624,956t, down by 5% on-year in 2022.

However, the surge continued in deliveries to India, which at 198,474t were up 187% on-year.

Scrap imports by the German steel industry also fell last year by 12% on-year to 4.3mt. The value of all scrap imports last year was at €2.2 billion, the same level as the previous year, despite the significant drop in volumes.

The most important trading partner here was also the Netherlands, which provided 931,565t, down by 3.1% on-year.

The second-largest supplier was Czech Republic with 809,542t, down 15.3%, and third-largest was Poland with 648,684t, down by 20.4% on-year.

German scrap prices have increased in March amid higher demand and exports (see Kallanish passim). Local market participants expect this trend to continue in the next few weeks amid restocking from Turkish mills in the aftermath of the devastating earthquake.

Svetoslav Abrossimov Bulgaria

EUROMETAL Steel Net Forum Iberia 2023 gathers 170 participants in Porto

The EUROMETAL Steel Net Forum Iberia 2023 took place last Friday in Porto. More than 170 delegates participated in this event organized in collaboration with Associação Portuguesa dos Grossistas de Aços, Metais e Ferramentas (Açomefer) and Unión de Almacenistas de Hierros de España (UAHE).

We appreciate the great support of sponsors Megasa, Reibus International, Arcelormittal and CL Grupo Industrial that made this event possible.

Here you will find a list of some repercussions of the event in the press:

• EUROMETAL Steel Net Forum Iberia: EU steel production growing slower than GDP March 20, 2023
• Industry expert flags decoupling of European steel user consumption from production: EUROMETAL event March 20, 2023
• Iberian steel stockists expect prices to remain elevated amid ongoing market uncertainty March 20, 2023
• Distributors cautiously positive about 2023 steel price outlook: EUROMETAL forum March 20, 2023
• European sections prices, demand to remain strong: EUROMETAL conference March 20, 2023
• Spanish distributors see challenging scenario in 2023 March 20, 2023
• Iberian distributors embrace ‘new normal’, old concerns persist March 20, 2023