Rebar import pressure offsets CMC Poland cost cuts
CMC Poland’s earnings should remain fairly even sequentially in the February fiscal quarter as cost management offsets a weak market environment. This comes after imports depressed margins in the November quarter, offsetting improving Polish demand in certain end market applications and regional supply discipline, says US parent CMC.
CMC Poland’s shipments fell 9% on-year in the November quarter to 343,000 short tons, with merchant bar and other products down 7% to 206,000st and rebar falling 12% to 107,000st. Average selling price inched up 1% to $639/st, Kallanish notes.
Cost of ferrous scrap utilised also rose 1% to $370/st, meaning metal margin was up $1/st to $269/st. Net sales fell 7% to $209.4 million and adjusted Ebidta was down 34% to $25.8m. Still, this gave a respectable Ebitda margin of 12.3%.
Rebar imports into Poland from Germany in January-October 2024 reached 410,863st, up 43% on-year. They accounted for 65% of all rebar imports into Poland versus 56% in 2023 – and 36% in 2022 – CMC points out.
Poland’s residential construction market is recovering; new housing permits and the number of units under construction have rebounded, CMC notes. The expected release of €65 billion ($67 billion) to Poland from the EU Recovery and Resilience fund should boost activity.
Adam Smith Poland
Subdued consumption limits trading across Southern European steel longs markets
Fastmarkets’ price assessment for steel reinforcing bar (rebar) domestic, exw Italy was €570-590 ($620-642) per tonne, stable week on week.
Prices were stable across the Italian and Spanish rebar markets due to an uncertain outlook, Fastmarkets heard.
“Demand continues to be weak. Mills are trying to invert the price trend, but customers don’t believe in a price increase, so they prefer to stay in wait-and-see mode,” a buyer source said.
Prices could remain at these levels in the coming weeks, sources said.
Meanwhile, export offers from Italy were reported at $570 per tonne FOB to Switzerland and France.
Fastmarkets’ price assessment for steel reinforcing bar (rebar), domestic, delivered, Spain was €605-610 per tonne on Wednesday, stable week on week.
Sources reported unchanged market conditions in the Spanish rebar market.
“Prices are very stable, and there is no movement for the time being. Mills are trying to push for increased offers since last week. Customers did not accept these price rises; however, buyers need to restock and may need to accept these higher offers in the coming weeks,” a producer source said.
“Prices are more or less stable, but consumption is still weak,” a buyer source from the region said.
Southern European wire rod
Fastmarkets’ price assessment for steel wire rod (mesh quality), domestic, delivered Southern Europe was €600-620 per tonne on Wednesday, stable week on week.
Meanwhile, import offers continued to be reported at €580-590 per tonne CFR from Algeria, Turkey and Indonesia.
But import quotas for this quarter were reported to be full. As a result, the wire rod import market is expected to slow down until the new quota period begins on January 1, sources said.
Italian rebar activity stagnates with low prices
Italian rebar prices are mostly stable on-week although the low point of the range has decreased €10/t ($11) compared to the end of September, buyers tell Kallanish.
Last month, producers’ efforts to implement a price increase have not produced the desired effect, and activity is considered too slow to achieve the hikes.
Buyers and distributors anticipate a further price decline in the upcoming weeks, in line with scrap prices, also seen decreasing this month.
Current transaction values in the domestic market are at approximately €280-300/t base ex-works. Two buyers report purchasing limited volumes.
Including additional size extras at an average cost of €260/t, current values in Italy hover this week at €540-560/t ex-works.
The current price for domestic mesh stands at approximately €390-400/t, not accounting for transport costs. An extra fee of €300/t applies for size extras, sources suggest.
Natalia Capra France
Polish steel rebar, wire rod prices decrease further on poor demand
Wire rod
Polish mills announced lower offers for October-delivery low-carbon drawing quality wire rod, at 2,700-2,750 zloty ($692-705) per tonne CPT, sources told Fastmarkets.
In comparison, at the beginning of September, similar material was on offer at 2,800-2,850 zloty per tonne CPT.
But persistently low demand has made producers revise their offers downward, Fastmarkets understands.
Fastmarkets’ sources estimated the tradeable market level at 2,650-2,700 zloty per tonne CPT.
As a result, Fastmarkets’ price assessment for steel wire rod (drawing quality), domestic, delivered Poland, was 2,650-2,750 zloty per tonne on Friday, decreasing by 50 zloty per tonne from 2,700-2,800 zloty per tonne on September 27.
“Demand is still very weak, and there is no restocking,” a distributor source told Fastmarkets. The source added that the situation remained unpredictable due to the conflicts in Ukraine and the Middle East.
Import offers of low-carbon drawing quality wire rod from Italy to Poland were heard at €630-650 ($695-717) per tonne CPT, depending on the destination.
From Ukraine, offers of mesh-quality material were heard at €600-610 per tonne CPT.
Moldava-origin mesh-quality wire rod was on offer at €620 per tonne CPT.
Rebar
Prices for Polish rebar also decreased during the assessment week, and were heard at 2,530 zloty per tonne CPT.
In comparison, at the beginning of the previous month, Polish rebar was on offer at 2,610-2,660 zloty per tonne CPT.
Market participants estimated the tradeable market level for the assessment week to be 2,500 zloty per tonne CPT.
Fastmarkets’ weekly price assessment for steel reinforcing bar (rebar), domestic, cpt Poland, was 2,500-2,530 zloty per tonne on Friday, down by 70-75 zloty per tonne from 2,570-2,605 zloty per tonne on September 27.
In the secondary market, prices for rebar from stock were heard at 2,620-2,650 zloty per tonne CPT, depending on the region.
Demand for rebar in Poland also remained weak, according to Fastmarkets’ sources.
The completion of some significant construction projects will be postponed until next year, Fastmarkets understands.
“Some infrastructure projects, which are supposed to be funded by the EU, will start no sooner than the first half of 2025,” a second distributor source told Fastmarkets.
Besides, it was not clear yet whether the government’s program to grant low-interest-rate loans to first-time home buyers would continue. The program was expected to support the residential construction sub-sector.
“The government does not even know what form the program would take. I doubt it will come into force in the first half of next year,” the second distributor said.
Polish domestic rebar prices were still under pressure from imports, Fastmarkets understands. Import offers of rebar from European suppliers to Poland were heard at €600-620 per tonne CPT.
Seven key things Fastmarkets learned during Irepas Fall 2024 meeting
More than 490 delegates from around the world gathered in Paris on September 15-17 to network and to participate in this key event for long steel producers.
Here are the seven main topics that were discussed at the conference:
Chinese dominance
China’s dominance in the international steel market has strengthened over the past year amid a drop in domestic demand and insufficient production cuts, and it was highly likely to continue in 2025.
Yeoh Wee Jin, secretary general of the South East Asia Iron & Steel Institute (SEAISI), described this year’s events in China as “a third tsunami” during a panel at the Irepas event. He expected the country’s steel exports to exceed 100 million tonnes this year, compared with 89 million tonnes in 2023.
Fall in iron ore prices
The decrease in steel production in China resulted in a fall in iron ore prices, as well as the accumulation of a significant stock of iron ore. Wilhelm Alff, chairman of the Irepas traders’ committee, said that iron ore stocks at Chinese ports currently totaled 149 million tonnes.
Fastmarkets’ daily index for iron ore 62% Fe fines, cfr Qingdao, has averaged $91.87 per tonne so far in September, compared with an average of $135.03 per tonne in January this year.
Meanwhile, scrap collection in Europe and the US has slowed down, Jens Björkman, the chairman of the raw material suppliers’ committee, said. This helped to support prices for the product despite delayed demand in Turkey.
The Middle Eastern country has switched to purchases of Chinese steel billet since the summer, when prices for the material became low enough to make production of rebar from billet more attractive than from scrap.
Fastmarkets’ daily index for steel scrap, HMS 1&2 (80:20 mix), North Europe origin, cfr Turkey, has averaged $363.36 per tonne so far in September, compared with $414.12 per tonne in January 2024.
Consequently, iron ore prices fell by almost 32% in the period under consideration, while those for scrap fell by 12.23%, making the blast furnace steel production route more profitable.
“Everybody wants to be a blast furnace-based steel producer for the next six months,” Alff said.
Shift in Turkey
Chinese steel prices remained attractive, including those for billet, so it was highly likely that Turkey would continue to meet its needs through billet imports, which would result in lower steel output in the country.
This situation could also exert pressure on scrap prices.
Trade defense
Turkey itself was limited in its long steel export opportunities at the moment, considering the imposition of trade defense measures in the US and in Canada, the almost-complete take-up of import quotas in the EU for the third quarter of 2024, with tonnages already sold for delivery in the fourth quarter, and with recent restrictions on the supply of steel products to Israel.
Some countries that formerly procured long steel from Turkey – such as Egypt, Algeria and states in the Gulf region – have become exporters themselves, according to the chairman of the Irepas producers’ committee, Murat Cebecioglu.
Yemen, plus a few other countries in the Middle East, and Latin America were currently the key destinations for Turkish long steel exports, he added.
Regional differences
Looking at the EU, Cebecioglu said that business has seemed to be at a standstill in the region for more than a year, and little or no improvement was expected in the next six months or so, a point on which other delegates at the event agreed.
Gulf Co-operation Council (GCC) countries were currently in a slightly better position than those in other regions because their economies were moving in the right direction.
New projects in Saudi Arabia, for example, were creating demand in the region, with the construction and real estate sectors being the driving forces.
Yeoh said that ASEAN economies were also growing, albeit more slowly because of the generally unfavorable situation globally. He said that the construction sector was booming across the region, except in Thailand. Meanwhile, manufacturing was weakening, mainly due to soft external demand.
Earlier this year, he said that ASEAN steel demand was expected to reach 76.5 million tonnes in 2024, up from 73.5 million tonnes in 2023.
Overcapacity in Asia
Meanwhile, unsustainable overcapacity and de-greening were in prospect in Southeast Asia, with at least 104.4 million tonnes per year of new capacities expected to come onstream by 2030. These would push the region’s total capacity to 181.5 million tpy if they were all implemented, Yeoh said.
Around 83.6 million tpy of new capacity would be based on blast furnace-basic oxygen furnace technology, Yeoh said, while only 20.8 million tpy would be based on direct reduced iron (DRI) and electric-arc furnace (EAF) capacities, and this would lead to an “explosion” of greenhouse gas emissions by the region.
Decarbonization
At the same time, Europe’s imposition of its CBAM regulations and the global trend for decarbonization were other major topics at the Irepas event.
Since its start in October 2023, buyers of goods originating outside the EU must purchase certificates corresponding to the total volume of greenhouse gas emissions created by the production of the goods.
The costs of these certificates are calculated by the European Commission on a weekly basis, related to the average price of the closing EU Emission Trading System (ETS) carbon dioxide (CO2) allowance for each week.
By placing a fair price on the carbon emitted during the production of all carbon-intensive products entering Europe, European mills that currently must pay for carbon credits equivalent to their carbon emissions will be put on a more equitable basis with producers that operate in exporter countries that do not impose similar taxes.
Opinions were divided on the effects of the CBAM rules on the European market – and beyond it. Many delegates to the Irepas event felt that CBAM could help European mills to remain competitive when faced with economic challenges. Some sources, however, did not think that CBAM would either encourage global decarbonization or significantly rebalance global markets.
CBAM has put a cost on carbon, but it was not enough to counter the other factors which have resulted in a lack of balance in the global markets, these sources said.
These factors included foreign country subsidies, lower gas and electricity costs, lower labor costs, and fewer or no regulations in the construction sector, the sources added.
Global overcapacity was also expected to slow the decarbonization transition and to hamper innovation, Luciano Giua, economic and policy analyst at the Organisation for Economic Cooperation & Development (OECD), said during the event.
Published by: Vlada Novokreshchenova, India-Inés Levy
Prices for Polish rebar inch lower amid poor trading
Fastmarkets’ weekly assessment for steel reinforcing bar (rebar), domestic, cpt Poland — which has been falling since July 19 — reached 2,600-2,640 zloty ($669-679) per tonne on Friday, down by 10-20 zloty per tonne from 2,610-2,660 zloty per tonne on September 6.
A local producer offered rebar to many Polish steel traders at 2,600 zloty per tonne CPT, sources told Fastmarkets. This urged other mills in the country to adjust their offers to similar price levels.
Buyers estimated the tradeable market level at 2,600-2,640 zloty per tonne CPT, depending on tonnages.
Lower scrap prices on the Polish market were also among the reasons for the decreasing rebar prices, Fastmarkets understands.
Scrap prices in September contracts decreased by 90-110 zloty per tonne, a distributor source said.
“Consumers in Poland are aware of these developments, and when the local mills try to offer higher prices, they do not accept these offers,” the source added. “No one is buying huge volumes now due to the decreasing rebar prices.”
Competitive imports also put additional pressure on domestic prices.
German material was heard offered to Poland at €610-615 ($673-679) per tonne CPT. For deliveries close to the border with Germany, the price could drop to €605 per tonne CPT, sources told Fastmarkets.
Offers for November-delivery rebar from Ukraine were heard recently at €570 per tonne DAP border for material with 10-32 mm diameter, which nets back to €600 per tonne CPT.
According to a second distributor source, slow demand, combined with strong competition from imports, will continue to put downward pressure on Polish rebar prices.
Italian rebar producers seek increases
Italian rebar producers are looking to implement price increases of €20-30/tonne ($22.1-33.2) in an effort to halt the price decline and regain some lost margins. Increased costs of production, especially in terms of energy, have put significant pressure on their financials.
According to buyers who spoke to Kallanish, the outlook for the end of the year remains pessimistic, with ongoing low downstream orders and reduced consumption. Buyers have no confidence that the latest hike attempt will be sustained. The distribution sector is adopting a cautious approach. Sources indicate prices for domestic rebar have remained steady in comparison to last month, but a price decline is expected.
Transaction values in the domestic market last week ranged from €290-300/t base ex-works, or €550-560/t ex-works effective. This includes an average of €260/t for additional size extras. Domestic mesh is at around €400/t, excluding transportation costs.
There is an additional charge of €300/t for size extras. Mills are requesting €320-330/t ex-works for rebar. Some steelmakers temporarily halted sales last week due to uncertainty surrounding pricing decisions. The market continues to underperform, with buyers reporting an influx of much cheaper long products from Turkey.
Natalia Capra France
Albania’s Kurum suspends steel output amid financial problems
Albanian International’s Elbasan-based rebar steelworks Kurum has stopped steel production due to financial tension caused by the drop in international steel prices, Kallanish notes.
“Over the past two years, Kurum International has experienced severe complications due to the international energy recession and deteriorating economic conditions, interrupting production at times,” the company says. “The situation became extremely complicated in the second half of 2023 and even more so in 2024 as metallurgy faced deteriorating conditions due to reduced capital demand, high interest rates, inflation and complications in securing primary materials and power.”
Kurum has dismissed local media reports of layoffs, saying it has not implemented mass layoffs for administrative staff. It is however negotiating with the union to offer a number of these staff layoff options with back pay and time served.
According to the company, it is now engaged in substantial repairs to modernise industrial lines and restore competitiveness, to resume production as soon as possible. “The suspension of steel production has nothing to do with media reports of the company’s joining in the export of hazardous waste,” it adds.
Last week, Albanian media outlet Reporter.al reported that Durres prosecutors had identified Kurum International as the source of 816 tonnes of hazardous waste on two Maersk container ships stopped from docking in Thailand.
Kurum International’s Elbasan steelworks comprises one electric arc furnace meltshop with 510,000 tonnes/year liquid steel capacity and three rebar mills with a combined 700,000 t/y capacity. The plant also has a scrap processing unit for which it sources material from the domestic market, as well as Montenegro, Macedonia, Serbia and Kosovo.
The firm sells half of its products domestically – including merchant billet – and exports the balance. It claims to supply 66% of Albania’s rebar requirement.
The company is fully owned by Turkish businesswoman Hatice Melek Kurum.
Svetoslav Abrossimov Bulgaria
Polish steel rebar prices inch downward on low demand, oversupply
Fastmarkets’ weekly price assessment for steel reinforcing bar (rebar), domestic, cpt Poland, was 2,680-2,730 zloty ($674-686) per tonne on Friday, widening downward by 20 zloty per tonne from 2,700-2,730 zloty per tonne the previous week.
Polish mills were heard to be hoping to achieve 2,750 zloty per tonne CPT, but lower offers at 2,700 zloty per tonne CPT were available in the market this week, sources told Fastmarkets.
Market participants estimated the tradeable market price at 2,680-2,730 zloty per tonne CPT.
According to some sources, even lower prices at 2,600-2,650 zloty per tonne could be achieved for large volumes exceeding 1,000 tonnes. But these were not included in this week’s assessment because they were not in line with Fastmarkets’ methodology.
“Demand [in Poland] is currently… moderate, but there is oversupply in the market, and that is why the prices are going down,” a distributor source told Fastmarkets.
According to a second distributor source, only the cut-and-bend sector in Poland was performing well at the moment, but demand in general remained low.
A producer source agreed that demand for rebar in the Polish market remained comparatively low, with the summer holiday period also having an effect.
“No significant changes are expected in August,” the producer source added.
In terms of any future developments in Polish rebar prices, the first distributor source said that, in summer, even significant price decreases would not revive the market.
“I am afraid that in September, when mills come back to the market, and demand is still not so good, there could be more price decreases,” the first distributor source said.
The same source added that more significant funding from the EU for infrastructure projects, which could eventually support the local demand for rebar, would come no earlier than next year.
In terms of imports, offers of rebar from Germany were heard at €625-635 ($675-686) per tonne CPT.
Ukrainian material was offered to Poland at €570-580 per tonne DAP border, sources told Fastmarkets.
Kametstal to offer new rebar grade to Polish market
Kametstal, a subsidiary of Ukrainian steel producer Metinvest, has received international compliance certificate No. 020-UWB-3057/W, which will allow it to supply B500B rebar in diameters of 8-32mm to the Polish market, the company has announced. The certificate will be valid until 2028.
This means that Kametstal will be able to expand its product portfolio in Poland.
According to Fastmarkets’ sources, the first volumes of this material have already been traded in the Polish market.
EU long steel market remains mostly steady even as mills announce price increase
The Northwest European market for rebar and medium sections remained mostly steady in the week ended July 10 even as some mills raised offers . Some sources said that demand has improved and is expected to be better in the summer.
“Demand has improved,” another distributor source said. “Some companies will continue in summer and demand is expected to be better this summer. Mills have announced an increase of 10 euros for beams and merchant bars.”
Whether the higher offers will be accepted by buyers remains to be seen, sources said.
“Market is quiet due to summer holidays,” another distributor source said. “There is not much action, and no buying at the moment.”
Platts assessed the price of Northwest European rebar stable on the week at Eur615/mt ex-works.
Tradable values were heard at Eur615/mt ex-works Benelux.
Meanwhile, Platts assessed the price of European medium sections stable on the week at Eur750/mt delivered Benelux.
Workable levels were reported at Eur740-770/mt delivered Benelux.
Devbrat Saha
