Genoa, Italy — To highlight the very dangerous state that is living the entire steel chain we can summarize some of the main events seen in February. Over 5000 employers and employees from the entire European steel industry, including the recyclers, attended the march in Brussels on the 15th February to show support for fair trade, growth and jobs in Europe, as well as to protest against Chinese dumping on the EU market and the granting of Market Economy Status (MES) for China. The China’s government is determined to cut crude steel output and coal production on a large extent, to increase the policy of supporting the companies who will restructure in order to eliminate overcapacity and to help the over 5 hundred thousand of affected workers. EUROFER Scrap Price Indices is definitely over, officially due to a non well declared situation of force majeure, maybe because it is quite impossible to obtain data from several countries, due to the confused monthly movements.
The iron ore rally, with prices now over 50$, far from December 2015 lows, raised the question if these prices are sustainable because supported by fundamentals or it is just a jump that will pass in short time. Anyway some positive signals, even if so light to be almost not perceptible, are in front of us: the better demand of the flat steel products and the resulting raise of the prices, new orders from the car-makers who are increasing their sale, the arrival of the new Algeria’s rebar import licenses, even if with some volume reductions. Also the return of the Turkish buyers on the market with strong demand and better prices is essential in this time.
Talking about the scrap negotiation during February here in Italy, we can underline that on the domestic spot market the prices moved down around 5/10€ at the beginning of the month, remaining unchanged until the end. Only one steel mill acted strongly with the suppliers, looking for important scrap quantities at higher prices than the market ones. The monthly contracts with the European suppliers have been settled with 10/15€ reductions, for smaller quantities than the usual. The arrivals at the Italian ports in February were below the volumes seen the previous months: abt 3 Kt for scrap, abt 60 Kt for pig iron and abt 90 Kt for HBI. The mills inventories are a little lower than the standard. It is important to say that also the Italian Mills Federation stopped the survey of the monthly average prices, as made by other European national Federations. It is also a signal of the strong difference between the lowest and highest prices paid by the end-users on monthly basis.
Following the February indication of the prices paid (€/pmt delivered):
New arising E8
Demolition scrap E1/E3
The forecast for March contracts is oriented to small increases in term of prices, but also more quantities could be supplied to satisfy the moderate increase of steel production.
Some words about ILVA. The Data room is now opened to the 29 potential bidders who answered for purchasing or renting the company. They will have time until the end of March to present their offer and business plan. The first 2015 figures showed the crude steel production at 4.7 Ml/t v/s 5.9 of 2014 and higher loss than the previous year, -380 Mil€ v/s –285. Cleaning up and revamping works are always in progress, with continuous delays. The monthly steel production is always conditioned by the particular company situation.
PIG IRON – H.B.I.
During February the HBI arrivals at the Italian ports have been higher than the pig iron. It is the first time we noticed that. All the cargoes were from Black Sea. Last HBI offers are reported around 165/175$ pmt CIF Italy. The pig iron arrivals were only 60 Kton, after the December highest of 167 Kton. Also in this case all the quantities were from the Black Sea ports. The pig iron offers are now quoted around $200/210 pmt CIF for March shipment. The inventories at ports and mills remain well recovered.
Source: Alocci Rappresentanze Industriali