Italian service centres turn to secondary HRC
Italian steel service centres (SSCs) are turning to secondary hot-rolled coil (HRC) as they cannot move their higher-priced prime stock, market participants said on the sidelines of Italian association Assofermet's autumn conference in Milan today.
SSCs are buying second-choice material as weak demand means sales of prime material are increasingly lossmaking.
With EU mills refusing to cut production, although some have adjusted output, there has been an increased amount of second-choice coils offered in the market. This has allowed SSCs to continue selling processed material in a declining market, which one sheet seller said has been falling by around €10/t each week.
While there are some restrictions to using second-choice HRC, such as not being able to meet every customer's request, SSCs can use it for some sales, minimising their losses. Some said SSCs have six months worth of inventory, and stocks will get a further boost from incoming imports in October, which will allow buyers to re-evaluate their stock gaps and establish what they need to purchase domestically.
EU mill prices, having lost €47/t in Italy and €36.50/t in northwest EU since the start of September, according to Argus assessments, have prevented imports from being of interest to buyers. The Argus cif Italy HRC assessment has in comparison lost only €15/t since the start of the month.
Today some market participants were talking about prices being close to the bottom, a sentiment that was previously seen in June and July, but did not materialise owing to an unexpected further slowdown in demand in September. But producers selling large quantities of second-choice coils, at prices that sources said can be as much as €100/t below costs, is not sustainable.
The main issue in the flat steel sector remains a lack of demand, which unless there is an EU stimulus package, will continue weighing on prices, market participants said.
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EU steelmakers lobby for US Section 232-style tariff
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London, 25 September (Argus) — EU steelmakers are lobbying for emergency restrictions on imports in light of continuing market penetration, according to numerous sources. European steel association Eurofer has met with the European Commission to discuss high imports, at a time when weak demand is already putting pressure on local steel prices. Multiple sources suggest it is lobbying for a tariff similar to the US' Section 232, which applies a blanket tax on all finished steel imports. "The commission of course is aware of the concerns of the sector, it's a sector with which we have a strong ongoing contact and dialogue. Any new trade defence cases are looked at on a case by case basis on their own merits," a commission spokesperson told Argus in Brussels on Tuesday. The commission understands the concerns of mills, but at the same time has to balance the interest of steel users, sources suggest. Imports to the EU's hot-rolled coil (HRC) market have increased dramatically since China started ramping up exports in the third quarter of last year. Imports since July 2023 have constituted around 25pc of all EU market supply when safeguard quotas reset at the start of each quarter, up from 11-15pc in the previous months. Imports rose to a record 1.56mn t in July, and would have been even higher if not for 175,000t being pulled back from clearance to avoid additional tariff rate quota duties. The EU imported 6.2mn t of HRC in January-July, the highest on record, despite tightened safeguards. The share of imports in overall supply is higher on cold-rolled coil and hot-dip galvanised (HDG), where the impact of comparatively higher energy costs is even more problematic for local mills. Steelmaking sources suggest that the existing safeguard is not fit for purpose as a result, and they also question the ability of importers to hold back supply to avoid duties. But others suggest the impact of the existing 15pc other countries cap and continuing dumping investigation has not been felt yet, and that these measures will help tighten the market when demand strengthens. Vietnam is a major source of HDG supply to the EU and sources expect this could be the next dumping case, especially given the country's high usage of Chinese HRC. By Colin Richardson and Dafydd ab Iago Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
India's HRC importers hit by falling steel prices
India's HRC importers hit by falling steel prices
Mumbai, 25 September (Argus) — Indian importers of hot-rolled coil (HRC) have suffered large losses in the last three months as bets on a demand recovery failed and domestic prices fell to over three-year lows. HRC prices in India's domestic market have fallen by around 13pc between mid-May and mid-September, forcing some importers to sell at a loss. A slowdown in construction activity during the monsoon season, reduced government funding for infrastructure projects and heightened pressure from lower-priced seaborne shipments have combined to send domestic HRC prices to their lowest level since 2020. Importers were paying landed costs of 50,000-51,000 rupees/t ($598-610/t) for HRC when bookings were made in May, at a time when domestic steel prices were increasing. But prices had fallen back down by the time those cargoes started arriving in July, leaving importers facing losses. The Argus weekly Indian domestic HRC assessment for 2.5-4mm material was last assessed at Rs47,400/t ex-Mumbai on 20 September, down by 13pc compared to mid-May when prices were assessed at Rs54,200/t. Imported HRC is now being offered at Rs46,000/t, about 10pc lower than its landed cost, a Mumbai-based trader said. Expectations of an uptick in demand following India's national elections in June failed to materialise. Some market participants then forecast that prices would recover in September on the back of a post-monsoon rebound in construction activity. Prices instead kept falling as the government did not release funding for building projects as had been expected, while the availability of cheaper imports and rising domestic production created excess supply. "The thinking was that even if we faced losses in the beginning, we would be able to cover them later when prices rose. But the price decline has continued," a Chennai-based HRC importer said. "Currently, there is no risk appetite left among importers. We have sold out whatever we imported and now we are buying from other importers," he said. The steel unit of NMDC, India's state-owned iron ore mining firm, has also started selling HRC recently. This has added to the pressure on domestic prices by increasing supply, market participants said. HRC offers from overseas sellers to India have also fallen in recent months, in line with the downturn in domestic demand and sluggish Chinese markets. Importers booked volumes from Vietnamese steelmaker Formosa Ha Tinh for $590-595/t cfr India in May, but levels fell to $565-570/t in July and indicative bids were at $530-540/t cfr in August. Buyers booked Chinese HRC for around $560/t cfr in late April, while the latest bookings were at $490-495/t cfr India. Support from duties New import offers have all but dried up recently given increased discussions that anti-dumping (AD) duties could be imposed on Vietnamese HRC, and that tariffs could be raised on imports from China, market participants said. India launched an AD probe into Vietnamese imports in August, while the steel ministry has backed raising tariffs on Chinese imports to 10-12pc from current levels of 7.5pc. Import restrictions could provide some support to prices, which have been falling with no signs of bottoming out. But there has been no official communication on AD duties yet, which has soured steel market sentiment further. Some market participants expect domestic HRC prices to fall to Rs45,000/t soon. By Amruta Khandekar Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Japan, Vietnam, Taiwan to bust EU HRC quota
Japan, Vietnam, Taiwan to bust EU HRC quota
London, 24 September (Argus) — Japan, Vietnam and Taiwan's hot-rolled coil (HRC) exports are likely to exhaust their 141,850t safeguard duty-free allowance under the EU's ‘other countries' quota on 1 October. Japan exported nearly 250,000t of HRC in June-July to the EU, Global Trade Tracker data show, with an estimated 39,000t pulled-back from customs clearance in July, according to Argus calculations . Volumes at EU ports from Japan could be more than double the quota volume. Similarly, Vietnam exported over 80,000t in June-July, where at least 65,000t was left over from the previous quota period, which brings the total to slightly above the quota. There could be more Vietnamese material that had not been presented to customs in July, and early August exports could also arrive in time for October clearance. These Vietnamese and Japanese coils are all expected to be put forward for clearance on 1 October, as importers look to avoid the risk of potential retroactive anti-dumping duties, which could be collectable as early as 8 December. Taiwan is also on track to exhaust its quota, with exports to the EU in June-July totalling nearly 150,000t, with a further almost 45,000t estimated to have been pulled back from customs in July. But the pull-back mechanism might still be used for Taiwanese material in October, and not every tonne is likely to be cleared, because Taiwan is not subject to a dumping investigation, so importers could choose to wait until January to clear their material. Data from Egypt are not available yet, but Argus calculated that almost 27,000t were pulled back in July. Egypt benefits from shorter transit times, so could continue selling to the bloc even in October-November without risk of incurring duty. Export data further show that over 280,000t was exported from Brazil to the EU in June-August and over 70,000t from China. The EU has imported record amounts of HRC in the first seven months of this year, despite current safeguard measures. Over 6.2mn t was imported in January-July, around 400,000t more than the same period of last year. In 2021 — currently the record year for EU HRC imports at 9.2mn t — only 5.6mn t was imported over the same period. European steel producers' association Eurofer is lobbying for further restrictions on imports, after the implementation of the 15pc cap on sellers into the other countries quota, and the start of a dumping investigation against Egypt, Japan, India and Vietnam. By Lora Stoyanova and Colin Richardson Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
BMW, Redwood partner on Li-ion battery recycling
BMW, Redwood partner on Li-ion battery recycling
Houston, 23 September (Argus) — US-based battery recycler Redwood Materials will recycle lithium-ion batteries from electric vehicles (EV) in automaking conglomerate BMW Group's portfolio under a partnership with the group's US subsidiary. The deal, announced Monday, will give Redwood access to more than 700 BMW Group locations to source end-of-life batteries, including dealerships, distribution centers and internal facilities, the recycler said. Redwood touted its proximity to BMW's Spartanburg and Woodruff manufacturing plants in South Carolina, where one of the company's two campuses is located, in saying the two companies have "committed to establishing significant operations in the area." BMW plans to produce at least six EV models in the US by 2030, spending $1bn to retrofit Spartanburg to manufacture electric SUVs by 2026. Woodruff will supply Spartanburg with batteries as the company's new $700mn battery assembly plant that is expected to be operational by 2026. The collaboration with BMW adds to Redwood's push to partner with other auto and battery manufacturers in recent years. The company in May entered into a deal with Ultium, the joint venture between General Motors and LG Chem, to recycle its production waste from two facilities that it estimates produce a combined 10,000 metric tonnes (t)/yr of cathode and anode scrap. By Alex Nicoll Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
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