Northwest European buyers doubt coil price hike move
Managers at large coil purchasing companies in Germany and Austria were taken by surprise on Wednesday by ArcelorMittal’s hot rolled coil price hike in Europe to €590/tonne ($652) ex-works.
“Only today, I received an effective-price offer from ArcelorMittal, but when I re-calculate it, it is certainly lower than that [€590],” one Austrian source told Kallanish on Wednesday. He could not give a comparable base price, as the offer concerned a special specification, but notes it would not be in line with the new price hike.
“The latest move, from last week to this, was down a bit further,” says one unawares German service centre manager, assessing the latest offer at slightly below €550/t ex-works.
Another manager doubts that mills’ production capacities for the fourth quarter are already filled enough to justify such a move. “There must be some other background to it,” he says, suggesting that mills might try to flex their muscles in advance of the upcoming Euroblech fair.
“And anyway, who would pay that [€590]?” the Austrian source wonders, in view of continued sluggish demand in Europe. His latest order from a western European mill last week was at €580/t delivered, which would translate to €530/t ex-works, close to the low point of the latest cycle heard by other sources.
One well-connected observer does however confirm he heard of the new offer, and that ArcelorMittal would not book any additional volumes at previous, lower prices. “It’s not official, really, because they have failed to exert it often enough in the past,” he says, but he notes that mills do have a point, as competition from Asia is waning somewhat.
Sources reported on Wednesday that ArcelorMittal is raising coil offers in Europe, with immediate effect (see separate story).
Christian Koehl Germany
EU HRC market gears up for mill consolidation
The European hot-rolled coil (HRC) market is gearing up for potential consolidation over the coming year, as mills grapple with tough market conditions.
The share prices of key European producers have rallied in recent days, despite continued weakness in HRC prices. Global steelmaker ArcelorMittal’s shares traded above €22/share ($24/share) on the Luxembourg Stock Exchange at 12:30 GMT today, up from €19.70/share on 10 September. This strength is partly attributable to the expected release of economic stimulus measures in China, and the US Federal Reserve’s recent interest rate cut, sources suggest. But market strength could also be because of growing talk that a new wave of consolidation is on its way, fuelled by decarbonisation efforts and the strained positions’ of some mills.
There has long been talk that steel coil producer Tata Steel Netherlands could be sold, after the Dutch state agreed to contribute to its decarbonisation spend. Recent difficulties at Germany’s ThyssenKrupp have also sparked suggestions it could be an acquisition target. Czech Republic energy company EP Corporate Group (EPCG) recently completed its purchase of a 20pc stake in ThyssenKrupp’s Steel Europe division, and could increase this to 50pc in the near future. EPCG owner Daniel Kretinsky may be seeking a strategic partner to help run the business, sparking talks that other mills could bid for a stake in the company.
ThyssenKrupp shares were trading at €3.20/share on Deutsche Borse Xetra at 12:30 GMT today, up from €2.78/share on 10 September.
Concerns over strong positions in niche markets, particularly tin plate, saw Tata Steel and Thyssekrupp call off their proposed joint venture in May 2019. But the market is in a different position now. Some mills have reduced capacity but new entrants are trying to join the market as green producers. And the global market is oversupplied, putting European producers in a difficult financial predicament, especially given their capital-intensive efforts to decarbonise. In the case of ThyssenKrupp, expectations that the mill will reduce its production footprint could partially alleviate potential competition concerns in the event of a takeover.
ArcelorMittal Eisenhüttenstadt launches hot strip mill automation platform
ArcelorMittal Eisenhüttenstadt has produced the first coil after upgrading the automation solution at its hot-rolling mill. It is the first mill be fully equipped with Primetals’ latest state-of-the-art automation platform, Kallanish hears from the technology supplier.
The implementation was carried out during scheduled maintenance periods in two steps for the finishing mill and coiler area, and the roughing mill, respectively. With the new automation equipment and software, operators at the hot-rolling mill now benefit from higher availability, according to Primetals.
During the migration, core functions remained in operation, allowing operators and maintenance staff to immediately navigate the software with ease. The automation devices were mainly installed in the former system’s control cabinets, resulting in a short and swift implementation period. Joint preparations and top-level performance of the automation platform were key factors in bringing the plant back to normal production in a short time, Primetals notes.
Christian Koehl Germany
ArcelorMittal completes first phase of Differdange decarbonisation project
ArcelorMittal is implementing the decarbonisation project initial phase at its Luxembourg long products facility in Differdange.
It has successfully relocated the black slag pits from their previous position on the outskirts of the site, which was in close proximity to the neighbourhood. A previously unused hall has been transformed into a space to receive the liquid slag in close proximity to the electric arc furnace.
Modifications were made to the facility without interrupting production. This included expanding the storage space and pits inside the hall, as well as installing cladding to insulate the building from the outside. The steelmaker states in a note obtained by Kallanish that placing the slag pits in a covered hall has the advantage of reducing the main nuisances caused by the pouring of slag. The Luxembourg state provided up to 30% of the funding for the pit relocation.
In the second phase, Differdange will install a former converter secondary dedusting system from the ArcelorMittal Florange plant by the end of the year. The new dedusting unit will be connected to local canopy hoods for the rolling mill and steel plant by the end of 2025.
ArcelorMittal is investing in decarbonisation, product quality and increasing capacity at its Luxembourg long products facilities in Differdange and Belval. The company aims to commission new and revamped equipment at both plants between 2024 and 2026. The investment will improve environmental footprint, relocate by-products management areas within the plants, reduce overall emissions, and increase output at Belval.
The company is also launching the “Steelup” project at Belval that involves a new digitised “no man on the floor” EAF with increased safety, a 15% energy consumption reduction, and 15% heavy sections productivity hike. The project includes a new vacuum degassing system to reduce dissolved gas and a continuous casting transformation system for new high-carbon steel grades and heavier beam blanks.
The modernisation will help to reach a certified low carbon footprint for steel of below 300kg per tonne, cutting CO2 by 200,000 t/year. The Belval site will obtain the XCarb label for rails produced from mill A.
The new Belval EAF costs about €67 million ($74.2m), including €15m from state subsidies. The Differdange revamp will cost around €18m, including €5m from the local government.
ArcelorMittal Luxembourg produced 1.9 million tonnes of crude steel in 2022 and employs 3,368 workers. The new Belval EAF will increase ArcelorMittal Luxembourg production to 2.5 million t/y of steel.
Natalia Capra France
ArcelorMittal Europe boosts shipments but selling prices slump
ArcelorMittal Europe steel shipments grew 4% on-year in the second quarter to 7.4 million tonnes, driven by a 7% jump in long steel deliveries, Kallanish notes.
On-quarter, flat steel sales fell, but longs deliveries surged 14%, ensuring 2% overall shipments growth.
Crude steel production surged 18% on-year to 8.04mt, also up 6% versus the previous quarter.
Average steel selling price dropped 11% on-year and 2% on-quarter to $929/tonne. Despite higher volumes, therefore, sales fell 10% on-year to $7.8 billion in Q2, although this was flat on-quarter.
Operating income more than halved on-year to $194 million. However, it rose on-quarter as lower costs more than offset lower average steel selling prices, while shipments grew. Ebitda, at $462m, followed a similar trend.
The firm said European steel prices were at below marginal cost in Q2, impacted by excess Chinese capacity resulting in “aggressive” exports from the country.
ArcelorMittal Europe’s first-half-of-2024 shipments inched down 1% on-year to 14.7mt, although crude steel output grew 8% to 15.6mt. Sales fell 12% to $15.7 billion and operating income dropped 65% to $263m.
Europe saw continued real demand deterioration, with weakness across most end-use markets. In January-May, light vehicle assembly was down 3.3% on-year, manufacturing output down 3.4% and machinery output down 6.9%, the steelmaker points out.
ArcelorMittal has lowered its apparent flat steel demand growth forecast for Europe in 2024 to 0-2%, down from the previous 2-4% forecast.
Adam Smith Poland
ArcelorMittal increases offer prices for long steel products across Europe
The new prices were effective immediately and the company has been offering its long steel products across Europe at the higher levels. But, according to industry sources, the increased prices have not yet been accepted in deals.
The main reason behind the decision to increase the offer prices was the high production costs, according to market sources.
ArcelorMittal tried to increase its prices for long steel products across Europe at the beginning of June.
But due to slow demand from the construction sector, the main consumer of long steel products, prices in Northern Europe have been gradually declining since the start of June.
For example, Fastmarkets’ weekly price assessment for steel reinforcing bar (rebar) domestic, delivered Northern Europe, averaged €635 per tonne for the 7 days from June 1 to June 7, compared to €622.50 per tonne for the period from July 13 to July 19.
A price rebound has also not been observed also in Northern Europe’s mesh-quality wire rod market, Fastmarkets’ data shows.
According to Fastmarkets’ weekly price assessment for steel wire rod (mesh quality), domestic, delivered Northern Europe, the price for this product was stable at a weekly average level of €632.50 per tonne since the end of May.
European long steel producers hope that the new steel safeguard measures of the European Commission, effective from July 1, would have a positive effect on prices.
Notably, the European Commission approved a 15% cap per country on residual quotas for steel wire rod initially available for each quarter. The measure would impact imports from destinations like Algeria, Egypt, Malaysia, Indonesia, and India, which usually give the most competitive prices.
Thus, each country falling under the “other countries” category will be limited to delivering no more than 70,850 tonnes of wire rod to the EU in one year, Fastmarkets understands.
However, according to industry source, European buyers are still keen to book from these destinations due to the price gap with domestic prices.
ArcelorMittal to supply XCarb to Knauf Interfer
ArcelorMittal will supply German distribution group Knauf Interfer with CO2-reduced input material, Kallanish learns from the steelmaker.
At ArcelorMittal Europe – Flat Products, CO2 savings are achieved with the “XCarb recycled and renewably produced” label and also through the sale of “XCarb Green Steel Certificates” in line with customer requirements, the steelmaker says.
In partnership with ArcelorMittal Europe – Flat Products, Knauf Interfer will soon be using the “XCarb recycled and renewably produced” product in series production for several customer projects.
Knauf Interfer, in turn, can pass these CO2 savings on to its customers. In this way, the two partners want to safeguard the supply chain. Knauf is thus forming a central interface between steel manufacturers and customers, both through its steel service centres and through its own forming blanks and cold rolling activities, ArcelorMittal explains.
Knauf Interfer processes the steel into slit strip, sheets, formed blanks or cold-rolled precision steel for applications in segments such as drives, engines or seats.
Christian Koehl Germany
Tubemaker Wiederholt sources CO2-reduced steel from ArcelorMittal
Wiederholt, a German producer of precision steel tube, and ArcelorMittal have signed a memorandum of understanding to use CO2-reduced steel in production, Kallanish learns from the steelmaker. Both companies have been working together for several decades.
As part of the partnership, Wiederholt intends to source hot-rolled steel from ArcelorMittal with CO2 savings of up to 65% compared to traditional production methods.
The CO2 reduction will be achieved through “XCarb Green Steel certificates” and steel with the “XCarb recycled and renewably produced” label. According to ArcelorMittal, at least 75% recycled scrap is used in the production of this steel. The CO2 savings that Wiederholt can pass on to its customers are verified by environmental product declarations (EPDs), the steelmaker says.
Wiederholt’s precision steel tube is mainly used in the automotive industry, including shock absorbers, camshafts, steering parts, cardan shafts and stabilisers. It has committed to becoming carbon neutral in Scope 1 and 2 emissions by 2030, in accordance with the Greenhouse Gas Protocol.
Separately, ArcelorMittal Germany has announced that its Duisburg long products mill has been certified by organisation ResponsibleSteel, following a two-year audit by inspection company GUTcert.
Christian Koehl Germany
ArcelorMittal France tests MPI automotive steel blank line
ArcelorMittal France has inaugurated its Multi Part Integration (MPI) line assembled at its Montataire research centre, a line specifically designed for the production of automotive steel.
This laser ablation and welding facility will test different manufacturing processes and shapes of laser-welded blanks (LWB), also referred to as tailored blanks. It will produce prototypes for ArcelorMittal Tailored Blanks, the steelmaker’s division that supplies laser-welded and unwelded blanks to the automotive industry worldwide. In Europe, it has sites in Belgium, France, Germany, Slovakia, Spain and the UK, Kallanish notes.
The new MPI line caters to the requirements of automakers for simplified assembly and modular design in electric driving. An LWB is a sheet that combines different grades. Each grade can have different thicknesses and coatings. “The separate grades are laser welded together to create a single sheet of steel which has the best grade in the best place for strength and deformation. Each sheet can be hot or cold-stamped to give the part its final shape,” the steelmaker explains in a note. The result is a tailor-made solution employed in automotive manufacturing, specifically for the body-in-white and closures of a vehicle.
The new MPI now being tested at Montataire incorporates press hardened steel (PHS) grade and laser welding technology. This allows for the creation of a component that can be fine-tuned to meet various crash requirements and accommodate different types of motors.
The technology offers numerous benefits, such as reducing the number of structural parts and shaping steps, as well as minimising the surface area of the workshop. It also helps in reducing assembly times and weight, thanks to the utilisation of new-generation steel grades. The new line’s features will allow for the development of new laser welding processes on large blanks, ArcelorMittal concludes.
Natalia Capra France
ArcelorMittal Construction acquires insulation panel manufacturer Italpannelli
Steelmaker ArcelorMittal has completed the acquisition of Italpannelli, a specialized manufacturer of insulation panels for roofs and facades, it said in a statement May 31.
The acquisition includes two production sites operated by Italpannelli SRL in in Abruzzo, Italy and Italpannelli Iberica in Zaragoza, Spain.
According to ArcelorMittal, the two facilities operate seven production lines with a capacity of 13 million sq m/year of sandwich panels, serving the Central and Eastern European, French, German, Italian and Spanish markets.
Italpannelli will be incorporated into ArcelorMittal’s construction-focused subsidiary, ArchelorMittal Construction.
The company said the acquisition adds considerable strategic value to ArcelorMittal Construction, including access to new markets and an expanded product portfolio.
The latest announcement marks the second acquisition of Italpannelli businesses by ArcelorMittal, following the purchase of Italpannelli Germany in March 2023.
ArcelorMittal Construction CEO Jean Christophe Kennel said Italpannelli had built a formidable reputation as a high-quality supplier of lightweight sandwich panels and was “highly regarded in the market for its service and delivery.”
Platts, part of S&P Global Commodity Insights, assessed domestic prices for HRC in South Europe at Eur625/mt EXW Italy on May 30, unchanged on the day.