UK steel service centre Malcolm Clarke to close
Manchester-based steel service centre Malcolm Clarke will close by summer this year, the company said in a letter to customers and suppliers.
The company said any existing and new orders will be fulfilled in full and on time, ahead of its target closure date of June 2025. The closure may be slightly later than this date after its “orderly winding down”, the company said. Suppliers will be paid before the closure, it added.
Malcolm Clarke in its financial results to June 2024, published on 2 April, announced that it would cease trading, so its accounts had been prepared “on a basis other than going concern”.
“The business environment in which we operate has become increasingly unstable, with unpredictable shifts in market and regulation making it very challenging for small- to medium-sized participants in the day-to-day spot market,” the company told Argus.
“Despite our best efforts to adapt and evolve, we do not envisage a short- to medium-term future where the situation is likely to improve significantly,” it added, suggesting changes to the market were structural and permanent.
The business, which was incorporated in September 1970, has two heavy decoiling lines and also sells reversing mill plate.
Source: argusmedia.com
EUROMETAL & YISAD Conference: Steel service centers need investments to keep up with competition
During the panel moderated by SteelOrbis general manager Murat Eryılmaz at the fourth session of the Eurometal Steel Day & YISAD Flat Steel Conference held at Istanbul Marriott Hotel Asia on Tuesday, April 8, in cooperation with SteelOrbis, the role of steel service centers in the flat steel trade was discussed.
Stating that production in Europe has changed due to the increase in costs resulting from the energy crisis that started with Russia’s invasion of Ukraine, Alexander Julius, president of EUROMETAL, said that investments in many segments in Europe, especially green transformation, have decreased. He emphasized that the reason that 2024 was a bad year is actually the developments in previous years such as pandemic and war between Ukraine and Russia.
Regarding the role of steel service centers, Alexander Julius stated that steel producers and steel service centers should work in synchrony to create a complete value and supply chain. The EUROMETAL president said that, with this value and supply chain, customers with emission targets would be able to follow the emission values and quality of products.
Next, Uğur Usta, deputy general manager of UMS Metal, stated that 2024 was a year of losses due to falling steel prices, Turkey’s economic outlook, high interest rates and the shrinking demand in Europe. He went on to say that producers could not conclude sales easily and could not achieve profit margins when selling. Regarding the rest of 2025, he noted that the dynamics of the market have changed with Donald Trump’s new taxes and that it is not possible for these taxes to be sustainable. He predicted that, even if demand is not high, prices will no longer fall below a certain level. Stating that the Asia-Pacific region is in first place in terms of overall capacity of steel service center services, followed by the EU, the Americas and the Middle East, Usta said that the revenues of steel service centers reached $350 billion by the end of 2024 and is expected to reach $450 billion within the next 10 years. In addition, he stated that steel service centers in Turkey need to invest in value-added products in order to compete with major producers.
Kaan Sarnıç, sales director at Yücel Group, stated that 2023 was not too bad in terms of budgets and profits, but that he could not say the same for 2024, noting that energy and labor costs increased during the year, while dollar-based product prices fell due to exchange rate fluctuations, and the steel sector suffered losses. Pointing out that steel service centers in Europe make money from processing rather than materials, however this is not the case in Turkey, Mr. Sarnıç stated that the availability of commercial quality products and therefore competition are high, and that steel service centers in Turkey must stock materials of varying qualities to overcome competitive disadvantages.
Evaluating last year, Mehmet Ali Fincan, general manager at Yametaş Flat Metal Products, commented that 2024 was not an easy year as China, which has insufficient local demand, continued to export in every segment, while there was a slowdown in the EU, Turkey experienced economic difficulties, and costs increased. Regarding the advantage of working with a steel service center, Fincan stated that various services can be provided from a single source, and that this saves time and costs for buyers. Regarding the difficulties faced by steel service centers, which provide a competitive advantage thanks to their flexible structure as well as stock and logistics management, Fincan highlighted that fluctuations in raw material prices, increasing costs and price pressure affect competition, and that steel service centers need to stay up-to-date in terms of technology and continue their investments given the competition in the market.
EU protectionism to weaken entire value chain
According to Italian flat steel processors, a turn on the screw on the current protectionist measures are likely to bolster European steelmakers’ price increases; however, this trend is unsustainable without a resurgence in downstream consumption, multiple sources tell Kallanish.
All eyes are on the implications of the recent European Steel Association (Eurofer) proposals submitted to the European Commission regarding the enhancement of safeguard and other protectionist measures.
“In addition to other demands, Eurofer is suggesting halving the safeguard quotas. If their requests are accepted, it would represent a significant setback for the European manufacturing sector,” states a representative from the Italian trade association Assofermet. “We are collaborating with the politicians representing us in Europe to ensure that EU officials take into account the potential impact on manufacturing. Steel consumers are likely to scale back their capacities as they will struggle to keep up with the accelerating price increases in Europe. A boomerang effect is likely to affect European producers if the EU complies with all of Eurofer’s requests. They may enjoy high prices in the future, but since this will destroy the manufacturing sector, orders will be reduced. This is what happens when only one area of the industry is protected.”
Assofermet is advocating for the European Commission to archive the existing safeguard measures and refrain from extending them beyond 31 December 2025. This is to avoid any overlap with the Carbon Border Adjustment Mechanism (CBAM), which could result in further cost increases for the EU steel processing sector (see separate article).
A large re-roller expects that Eurofer demands will be granted and is implementing price increases in line with hiking hot rolled coil prices.
A mid-size service centre also notes widespread apprehension that demands will be granted.
“This will lead to a significant decline in imports, resulting in a substantial loss of competitiveness for both service centres and our clients,” he comments.
Amidst the ongoing review of EU steel import safeguard measures, Eurofer has provided recommendations to the European Commission on making the measures more restrictive, according to Yuriy Rudyuk, partner at Van Bael & Bellis. Eurofer is proposing reducing tariff-rate quota volumes to reflect declining EU steel demand, raising the safeguard duty to 32-41%. It is capping quotas for other product categories at 15%, as was done from July for HRC and wire rod, Rudyuk indicates in a LinkedIn post.
The association has suggested removing the carry-over option and replacing residual quotas with country-specific ones. It also advocates halting new exemptions for developing countries in the final year of the measures (see Kallanish passim).
Natalia Capra France
ArcelorMittal Bytom service centre eyes renewables self sufficiency
ArcelorMittal is installing a 1 MW solar power plant at its Bytom service centre in Poland that will power the site’s processing lines, administrative building and other equipment in its entirety.
The firm forecasts that in the summer, around 90% of the solar energy generated will go to captive use. The new plant should be commissioned in mid-2025.
“It must be remembered that renewable energy is necessary for decarbonisation, while steel is an important construction material necessary for the production of renewable energy infrastructure,” ArcelorMittal SSC Poland chief executive Rafal Nawrat says in a note sent to Kallanish. “For example, 80-90% of the mass of a wind turbine material is steel and iron, similarly in the case of photovoltaic [PV] panels and transmission networks.”
In constructing the solar plant, supplier Quanta Energy will use ArcelorMittal “Magnelis” coated sheet, which is ideal for PV installations, Nawrat adds. This will be processed at the Bytom site before use.
“The construction of a photovoltaic farm for the leader of the steel industry is proof that renewable energy sources are not only a response to environmental challenges, but also a key element in building long-term competitiveness,” says Quanta Energy ceo Piotr Grzybczak. “We are proud that our solar and wind solutions … not only reduce the operating costs of our customers, but also strengthen their position as responsible leaders setting directions for sustainable development in their industries.”
Adam Smith Poland
Assofermet: downstream slowdown, pricing pressure Italian service centres
Reduced sales volumes and high costs continue to plague the Italian service centre and distribution sector, which is wedged between steelmakers and end users, Italian trade association Assofermet says in a market note seen by Kallanish.
In response to the upstream price increases for coils, service centres are now being compelled to raise prices of coil derivatives and pass the hiked costs on downstream. Firms are aiming to enhance financial positions and secure margins for the conclusion of the year.
The prevailing sentiment for December is one of a wait-and-see attitude. “November saw the consolidation of rising [hot rolled coil] quotes from EU steel mills despite much weakened demand from the downstream market, which still does not seem to be waking up. It is precisely this decoupling between the upstream production sector and downstream consumption which both confuses and worries all operators,” the note states.
Steelmakers are under pressure to enhance their financial performance, and the production cuts announced for 2025 are a response to persistently pressured margins. Assofermet is observing a stagnation in demand from various end users, which is preventing any new growth in prices and volumes.
EU producers, however, are rigidly insisting on increasing prices, driven by a reduction in available import quotas alongside anti-dumping duties, which make purchasing from the import market uncompetitive.
In November, distributors experienced a notable decline in volumes, accompanied by reductions in margins and turnover, primarily driven by persistent price weakness.
Assofermet recently launched a new calculation platform enabling coil buyers to assess potential anti-dumping and anti-subsidy duties as part of European Commission investigations. The initiative aims to support members’ understanding of the EU regulations regarding anti-dumping investigations. The calculator assists in evaluating the potential timing and imposition of duties.
Natalia Capra France
ArcelorMittal may close two French service centres
ArcelorMittal’s French service centre division is undergoing a restructuring process, which may result in the closure of two service centres in the country, Kallanish notes.
The Reims and Denain service centres, in northern France, are currently facing economic difficulties attributed to a downturn in the domestic steel sector.
ArcelorMittal Centres de Services management met with its service centre units on Tuesday to announce a project to reorganise the company and adapt its production capacities. This includes the shutdown of Reims and Denain.
“In a difficult economic context, ArcelorMittal Centres de Services is facing a sharp drop in activity among its industry and automotive customers which has accelerated in recent months,” an ArcelorMittal spokesperson tells Kallanish.
“During this meeting, the management explained the constraints which led it to present this project, and invited the social partners to a future meeting at the end of November as part of the information/consultation process,” the spokesperson adds. “Negotiations with trade unions will take place on social measures in order to limit the impact on employment.”
“The threat of a decline in production capacity presents a significant concern for European steelmakers, placing the French steel industry at risk,” the CGT unions say. “The impact on employment levels will be substantial. For several months, the CGT ArcelorMittal Service Centres [unions] has been notifying management regarding the prevailing economic and industrial conditions.”
The automotive sector accounts for 60% of total orders, and CGT proposed alternatives to address the demands of the electric vehicle market. “The management displayed a cautious approach, opting not to take immediate action and refraining from investing,” the unions add.
ArcelorMittal’s service centres segment includes eight facilities in France. Denain and Reims offer various services including de-coiling and slitting for the automotive and industrial sectors.
This comes after the news that ArcelorMittal’s long and flat products distribution branch in Bologna, Italy, is also set to permanently close on 31 December. Customers have been notified of the decision and reassured about the status of pending deliveries. The steelmaker’s other distribution hub in Flero, Brescia, continues to operate.
Rumours have been circulating for weeks that ArcelorMittal is mulling the closure of several service centres in Europe.
Natalia Capra France
New decoiling line for Tata Steel plant in Maastricht
Tata Steel Nederland announces the inauguration of a new decoiling line at its Feijen steel service centre location in Maastricht.
This is the largest investment ever made by Feijen, involving a sum of 20 million euros. With the state-of-the-art processing line, Tata Steel Nederland can deliver faster and higher quality steel to its customers in the machine building and industry sectors.
The new line involves a so-called decoiler and an automated sheet packaging line at the Feijen location in Maastricht. Hot-rolled steel coils from Tata Steel in IJmuiden are processed into steel sheets. In close corporation with the IJmuiden steel mill colleagues, Feijen focusses on customers in Europe as well as in other parts of the world. These customers are active in markets such as agricultural and earthmoving machinery, trailers, cranes, and shipbuilding.
Tata Steel Nederland consists of two business units: Business Unit Tata Steel IJmuiden (TSIJ) and Business Unit Tata Steel Downstream Europe (TSDE). Service Centre Maastricht is part of TSDE and consists of two locations: Multisteel and Feijen. Multisteel processes steel coils in the thinner segment, such as cold-rolled and galvanized steel. Feijen processes hot-rolled steel coils. Both sites predominantly process steel coils from TSIJ. Some major end customers supplied from Maastricht include JCB, John Deere, CNH, and Volvo Construction Equipment.
In line with Tata Steel Nederland’s broader vision of sustainability, Service Centre Maastricht announces today its carbon neutrality for Scope 1 and 2 emissions. This initiative underscores Tata Steel Nederland’s commitment to reducing its environmental footprint and aligns with its long-term strategy of achieving carbon neutrality across its Downstream operations. Scope 1 concerns direct CO2 emissions caused by sources within the organization itself. Scope 2 concerns indirect emissions created by the production of the electricity or heat that an organization buys.
Downstream Europe processes steel from IJmuiden for high-grade applications in specific market segments, such as construction (metal roofs and wall cladding), the mobility sector and the energy sector (batteries). With 19 production sites in ten countries, TSDE supplies to customers located mainly in Europe and partly in the United States. TSDE is divided into five business units: Building Systems, Colors, Distribution, Plating and Tubes.
Read more: tatasteelnederland.com
Service centers are de-stocking, not restocking
Domestic prices for European hot-rolled coil remained flat Sept. 18, as buyers focused on de-stocking material, and a largely pessimistic mood prevailed in the market.
“Service centers are de-stocking, not restocking,” a Germany-based mill source said. “There are very low volumes in the market, and all mills are suffering.”
Inventory levels in the market are running high, and macroeconomic conditions are worsening, leading to bankruptcies and a weak domestic market, sources said.
“Economy is not doing that well,” a Netherlands-based service-center source said. “There are a lot of bankruptcies in [the] Netherlands. The automotive sector is weak and customers are canceling orders. Germany is in recession due to automotive, construction sectors.”
Domestic European mills are in a dilemma, sources said, about whether to pursue market share by lowering offer levels, risk losing money by keeping prices firm, or reducing output and losing CO2 emissions allowances for next year.
“European mills are in a dilemma because if they don’t follow lower prices, they will lose market share,” the source said. “If they follow prices, they will lose money but have CO2 emissions allowances for next year. If they reduce production, they will lose this allowance, but maintain price level. I think eventually they will fire employees to minimize losses.”
Platts assessed Northwest European HRC stable on the day at Eur555/mt ex-works Ruhr Sept. 18. Offers were reported in the range of Eur550-580/mt ex-works Ruhr, from a buy-side source.
Platts assessed domestic HRC prices in Southern Europe also stable on the day at Eur555/mt EXW Italy, with offers reported at Eur580-570/mt EXW Italy.
Interest in imported HRC remains weak due to concerns around longer lead times and risks of safeguard duties. However, sources also noted that the safeguard measures have allowed other countries not subject to the measures to come in with competitive import offers.
“The quota cap system has allowed new countries such as Australia and Saudi Arabia to come to Europe,” the service-center source said.
Platts assessed imported HRC in Northwest Europe stable on the day at Eur545/mt CIF Antwerp.
Meanwhile, Platts assessed imported HRC in Southern Europe also stable on the day at Eur540/mt CIF Italy.
Assofermet: Italian service centres report negative first half
Italian service centres’ sales volumes for the first half of 2024 were about 15% lower compared to the first half of 2023, Italian steel trade association Assofermet says in its market note monitored by Kallanish.
The negative trend can be attributed to persistently unsustainable prices and low margins. June saw an overall decline in demand, a situation that has been ongoing for an extended period of time.
Some end users are expressing interest in negotiating supply for the fourth quarter of 2024 and the first quarter of 2025. Their goal is to secure the current low level of quotes for these periods.
“Maximum attention is now being paid to the consequences of the amended version of the [EU] safeguard … This change is set to dramatically impact the flows of this raw material [hot rolled coil] … Our concern focuses … on the lack of availability of the raw material and the consequent difficulty in maintaining stocks at an adequate level to meet the demand from end users. This adds to the inevitable price increase that EU producers will charge, due to the reduced import capacity,” Assofermet warns.
Production shutdowns at EU steel mills in August will be extensive. This is likely to strongly penalise the downstream segment. Despite the ongoing crisis in consumption, service centres will have to accept significant price increases for steel in order to maintain production and fulfil orders. “This may result in a loss of competitiveness in international markets,” the note states.
The distribution segment is facing a tired market and low visibility. Volumes for flat products are reported to be stable, while those for beams, which typically experience a surge during this season, are currently on the upswing. Finished product demand is stagnant in general but steel prices have remained relatively stable over the past few weeks.
July is expected to be a challenging month in terms of demand and price levels due to the extended closures announced by several steel mills leading to a potential shortage of certain products, Assofermet concludes.
Natalia Capra France
CBAM circumvention threat concerns European distributors
European steel service centres are concerned that some large, first-tier customers are turning to imports from outside the EU of the final, steel-containing product as these do not come under the Carbon Border Adjustment Mechanism (CBAM).
Suppliers from Asia are meanwhile looking for workaround solutions and are threatening the European metalforming industry and service centres. So was the conclusion of last week’s working group meeting hosted by European distributors’ association EUROMETAL.
“Scared by the impact of CBAM, some large customers (1st tiers) are looking for external alternatives outside European borders and opting to import ready-to-use steel products, in order to circumvent the regulation,” EUROMETAL says in its meeting summary.
“This trend deeply worries service centres, especially considering the current period of moderate activity. Already facing significant investments in decarbonisation and cost optimisation, CBAM throws another wrench into an already challenging situation,” it adds.
“The future of European steel processing hinges on the industry’s ability to adapt to the demands of CBAM while remaining competitive. Collaboration and innovation will likely be key to weathering this storm,” the association concludes.
Adam Smith Poland