French longs mills seek increases
French long steel prices for deliveries scheduled in December and January are rising notably. Mills are increasing quotes for nearly all products by €20/tonne ($21.1), effective immediately. The move is driven by elevated production costs, high energy prices, and compressed margins, Kallanish hears.
All transaction prices remain stable; however, moderate increases are anticipated this week. Construction firms and a purchasing group indicate demand is persistently low. November saw a significant decline in sales, and projections indicate that December may reflect similar underperformance.
No restocking has occurred prior to the start of the winter holiday period. Distributors point out business is back-to-back, with little visibility and no indications of recovery in the construction sector. There is however some demand stemming from infrastructure projects in major urban areas.
A purchasing group reports that, in a year-on-year comparison, volumes have decreased by approximately 3%, while margins have dropped significantly. Domestic rebar deals are closing at €600/t average delivered. However, for December delivery, new asking prices have increased to €620/t.
Market participants show a reluctance to accept price increases, with some saying that if prices are elevated, their sustainability will be questionable.
Currently, domestic merchant bar prices are also stable month-on-month, maintaining a range of €240-250/t delivered. Including size extras of €420/t, effective levels range between €660-670/t delivered. Clients are being informed of price increases of €20/t.
The initial category of sections has stabilised month-on-month at around €760-770/t delivered. A producer raised values by €20/t last month; however, the move did not yield the desired result.
Natalia Capra France
Slow Italian longs consumption prompts stoppages in November
September presented significant challenges for long product sales in Italy while insights from sellers and buyers indicate that October is unlikely to show any improvement, sources tell Kallanish.
Prices appear stable on a month-to-month basis, with minor fluctuations of €10/tonne ($10.84/t).
The Italian merchant bar sector is currently experiencing major difficulties due to sluggish order volumes. Prices remain largely stable as the primary producers have successfully maintained their position against falling bids.
Extended production reductions in the segment are anticipated in November to align demand with supply. Some producers are stopping for three weeks while other longs mills will take advantage of the 1 November public holiday to cut production for 1-2 weeks and implement temporary layoffs.
“There is no work downstream,” an agent comments. “Customers are not even in a wating mood. They just call us when they need material and do not even negotiate prices. They buy what is necessary for the next two weeks to match their low orders”.
The market outlook suggests that difficulties will persist through year end, with sources expressing scepticism regarding the potential for price increases in this weak environment.
“In September and October, the market seems frozen; we have been suffering on merchant bar but have gathered a few more orders for sections,” another agent says.
The better demand for sections is attributed to the current low availability as the main producer is said to be late with deliveries, according to sources. Beams supply is forecast to remain extremely limited. According to sources, prices for the first category are at around €800/t delivered. The current range for domestic merchant bar is at €280-290/t delivered or €700-710/t delivered, including size extras.
ArcelorMittal has recently announced it is to increase its prices for long products throughout Europe. The decision was driven by the present unsustainability of prices and the increasing costs of raw materials globally.
According to sources, the steelmaker is increasing prices of all commodity grade longs, including rebar, beams, and drawing quality wire rod, by €40/t.
Natalia Capra France
British Steel production glitch sparks delivery delays
UK longs producer British Steel is delaying deliveries because of a problem with one of its blast furnaces, according to market sources.
The company has moved to one blast furnace, from two, because it is struggling to make pig iron of sufficient quality, the sources said. There are some suggestions that this could be caused by problems with a batch of imported coke. The company recently took its coking ovens off line with a view to reducing its carbon footprint — and the amount of emissions allowances it needs to buy — and has been importing coke since.
“We are taking decisive action to minimise the potential impact on customers’ orders caused by a production issue,” a company spokesperson told Argus. The spokesperson refused to comment further on the nature of the problem or how many blast furnaces are operating.
The company’s sales director has been ringing customers to inform them that deliveries could slip by 3-4 weeks as a result of the issue, multiple large domestic customers of the mill told Argus.
There are also suggestions that the company has insufficient gas for both its sections and wire rod mills, according to workers at the site and sources close to the company. The spokesperson refused to comment.
Senior officials from British Steel recently met with the head of Liberty Steel, Sanjeev Gupta, in Scunthorpe. It is unclear what was discussed, but sources said one topic could have been gas availability for Liberty Merchant Bar, the site previously operated on coke oven offgases from British Steel.
Others said the discussions could have been centred on state aid in light of the government’s £500mn grant to Tata Steel to help it decarbonise its operations. British Steel also has been in talks with the government and is looking to establish electric arc furnaces to reduce the carbon intensity of its production.
Source: argusmedia.com
