Steel prices, news & market analysis | Argus Media

The price indices in our Argus Ferrous Markets and Argus Global Steel services are widely used by companies in physical supply contracts around the world – for iron ore, coking coal, hot-rolled coil (HRC) and ferrous scrap.

Many of them are used as the settlement prices for cash-settled futures contracts launched by exchanges to allow users of the derivatives who also transact in the physical market to minimize basis risk while hedging. These cash-settled monthly futures contracts are settled against the arithmetic mean of all the published Argus prices during each calendar month.

Using indices allows companies to trade material on an index-linked basis, not only via fixed-prices sales. This offers significant advantages when prices are volatile, yet the modern finished steel market remains primarily transacted on a fixed price basis. The addition of futures markets offers opportunities to enhance supply chain resilience further.

London, 22 October (Argus) — Italian long steel producer Beltrame isdiversifying its product range by installing a slab caster at its Vicenza millwith the aim of optimising the group's production. Argus spoke to thesteelmaker's chief commercial officer Enrico Fornelli about technical details,reasons for the investment and green premiums. What are the expected dates forthe start of testing and commercial production of slabs? When do you expect tocomplete the plant commissioning and start full production? We expect the testphase to commence towards the end of this year and it will probably last untilthe early months of 2025. We know that delays are always possible during theconstruction phase, but we are hoping that the first quarter of next year willmark the start of commercial production. The caster will have a capacity of200,000-300,000 t/yr. Is the new slab caster a newbuild or is it a conversion ofan existing billet caster, and will the slabs produced be sized for both coiland plate producers? We can define the machinery as "ex-novo", no conversion hasbeen made, in fact the slab caster sits next to a billet caster in the facility.To answer your second question yes, the final goal of the project is to producea wide range of dimensions suitable for both coil and plate producers. Iunderstand that there are several reasons behind your decision to enter the slabmarket. What are they and are there any synergies with the longs market? Thereare two main reasons why we made this investment. First, we need to consider theoptimisation of our steel plant. Optimising our production means making sure weachieve top performance levels, so that the mill works at full capacity andbenefits from lower costs. Simply put, an asset that is operating at 70pccapacity will not have the same efficiencies as an asset that is at fullcapacity. Second of all, we have felt a strong necessity to embark on a road ofdiversification in regards to our product range. On the billet side, we do seean issue of overproduction, and the excess supply we are not able to selllocally forces us on the international markets, where Italian and Europeanproducers are not competitive. It is no secret that our energy costs are holdingEuropean producers back. The conflict in Ukraine and the reduction of importsfrom Russia have drastically changed the slab market, considering that Ukrainewas also an important supplier for European and Italian steel mills. How didthese events influence your decision to enter the market? First and foremost, Iwant to reiterate that optimisation is the leading reason that led us to makethis investment decision. What I can say on our current situation is that Italyis a net importer of slab, as it currently buys 2mn-3mn t/yr of the product fromabroad. Have you already concluded some supply contracts, and can you give us anidea of the amount of orders collected so far? At the moment we have notfinalised any pre-sales. We are in no rush, when we are ready we will call ourcustomers. Once word spread that Beltrame was looking to enter the slab market,we received many phone calls and a lot of interest, about 7-8 Italian groupsthat buy significant quantities of slab have contacted us. Our productioncapacities are a drop in the ocean when compared with the size of the market, Iam sure we will have no issue to sell our allocation. Beltrame has a jointventure with the Grigoli plate rolling mill; what percentage of the slabproduction will be allocated to this project? I can say that a small percentagewill go to the Grigoli re-rolling facility, we have an agreement that they willtest the material initially and help us perfect our product. The first batchesof our production will be delivered to them. Do you expect to get a greenpremium on your slabs? We do expect to achieve a green premium, and we arealready doing it with our range of Chalibra products, especially in northernEurope where we have some buyers that only request this type of material. Thelandscape has changed a lot in the past 3-4 years on this front, no matter thepace the future is anyways going towards the direction of decarbonisation.Buyers in recent times have looked evermore east to secure volumes, but withCBAM regulation coming into force, compounded by a volatile geopoliticalenvironment, we can definitely achieve a green premium. What we believe is thatour customers will have no issue paying something like €30/t more, for thesecurity of having low-carbon slab only at about a 200km distance from them. Ontop of this we need Europe to urgently standardise and set some sort ofbenchmark for the industry on low-carbon steel. At the moment we see bothvoluntary and involuntary greenwashing occurring. If the project in Vicenza issuccessful, do you plan to replicate the facility in other countries? Are thereany plans to increase production capacity or make new investments, both in Italyand abroad? We are evaluating further investments in the field, but first weneed to see how this current project goes. One idea would be to replicate thiskind of investment in France not too close to our plant, where we could benefitfrom low energy costs. We would take up, again, a very small amount of themarket share. I think an investment of this type could be useful for our group,would not look to harm our competitors, and above all help reduce the dependenceon steel imports in Europe. By Carlo Da Cas Send comments and request moreinformation at [email protected] Copyright © 2024. Argus Media group . Allrights reserved.

Sao Paulo, 21 October (Argus) — Brazilian mining company Vale and BHP areadvancing negotiations for an agreement with Brazil over the 2015 collapse ofthe Samarco Fundao iron ore tailings dam. Both companies are negotiating thedefinitive terms of the resolution, following several offers and counteroffersover the months. The agreement includes a R170bn ($30bn) payment, Vale said on18 October. The two have already paid R38bn of the sum, while R100bn would bepaid in installments over 20 years to Brazil's federal government, the EspiritoSanto and Minas Gerais states and their municipalities, and the remainder wouldbe disbursed under performance obligations by Samarco, a joint venture betweenore miner Vale and BHP, including "initiatives for individual indemnification,resettlement, and environmental recovery." In a separate statement, BHP stressedthat Samarco would be the primary party bound to the settlement obligations, andthat BHP Brasil and Vale are each "secondary obligors of any obligation thatSamarco cannot fund or perform." Vale noted that the negotiations are ongoing,and that no final agreement has been signed. Brazilian president Luiz InacioLula da Silva said in September the government expected to reach an agreementwith the companies by October. Vale and BHP have been facing claims fromhundreds of victims of the collapse of the dam, located in Minas Gerais state,that killed 19 people and caused environmental damage in the region in 2015.Analysts at BTG Pactual bank said that the agreement's resolution would causeinvestors' focus "to shift back toward Vale's operational performance, which hasbeen improving." By Carolina Pulice Send comments and request more informationat [email protected] Copyright © 2024. Argus Media group . All rightsreserved.

London, 21 October (Argus) — European finished stainless steel prices stabilisedover the past two weeks on projected supply tightness following Spanishstainless steel producer Acerinox's decision to curtail production at itsAcerinox Europa plant in Los Barrios, Cadiz, Spain, alongside amaintenance-related stoppage at Finnish producer Outokumpu. Trading companiessurveyed by Argus said prices were in a downward trajectory in the first week ofOctober, but were no longer falling and even heard to be marginally increasingin Germany on better demand prospects. The Argus assessment for stainless steel304 cold-rolled 2mm sheet delivered northwest Europe (NWE) for October fell by€150/t on the month to €2,700-2,750/t. Prices were declining sharply from thislevel at the beginning of this month but have since settled back close to thisrange, trading companies said. Demand remains low in most regions, with fewtransactions having been reported over the past week, but an unexpected uptickin interest from buyers in Germany has driven a small price increase in thecountry. This support is expected to be temporary as the market prepares for achallenging final quarter. Trading firms said service centres are postponingpurchases until next year, except for small pockets of demand. In raw materials,stainless steel scrap prices saw a surprise increase last week because ofmounting export interest despite low domestic steelmaker demand. The Argusassessment for stainless steel scrap 304 (18-8) solids cif Rotterdam rose by4.72pc week on the week to €1,210-1,230/t, with the corresponding assessment for316 scrap rising by 4.5pc to €2,200-2,240/t. Early indications this weekindicate prices are expected to fall back to the level of two weeks ago, asmills continue to pile the pressure on sellers. Demand for ferro-alloys from thesteel industry has been tepid in recent weeks, with most steel companies relyingon their existing term contracts. Market participants told Argus that highferro-molybdenum prices, supported by rising material costs and greater demandfrom Asia, are putting pressure on European steelmakers. Producers have beentrying to maximise their production by focusing on lower-margin steels, but thisstrategy can lead to shrinking profitability, a trading firm said. Few enquiriesfor ferro-molybdenum truckloads have been made this month, with delivery delayshaving been reported at German and Italian plants. Despite the low demand,ferro-molybdenum prices have held relatively steady, averaging $51.10/kg overthe past month. An increase in Indian ferro-chrome exports to Europe over thefirst six months of this year led to excess supply on mainland Europe, pushingdown prices in the early autumn to the benefit of European steel mills. Indianferro-alloy sellers moved aggressively to gain market share and offered materialat low levels in September. Sellers, seeking to move material out of Europeanwarehouses, have shown themselves to be willing to conclude transactions withslim margins to shed stock. Prices of high-carbon ferro-chrome 65pc Cr fell by8pc over the course of September, with further declines having been registeredsince the beginning of October as Kazakh and Indian producers slashed offers.The majority of long-term contracts for next year will be concluded in thecoming weeks, at which point many market participants expect ferro-chrome pricesto rebound. Argus assessed high-carbon ferro-chrome 65pc Cr at $1.30-1.50/lb ddpNWE on 17 October, down by 15pc from $1.60-1.70/lb ddp on 3 September. The widerdemand outlook for stainless steel raw material prices remains pessimistic forthe rest of this year. "We might see steel plants closing down for the winterperiod sooner and come back to production later due to low order books," aEuropean ferro-alloy trading firm told Argus . By Roxana Lazar, Maeve Flahertyand Raghav Jain Send comments and request more information [email protected] Copyright © 2024. Argus Media group . All rightsreserved.

Houston, 19 October (Argus) — Aerospace manufacturer Boeing and union leadershipnegotiating on behalf of more than 32,000 of the company's machinists reached atentative labor agreement Saturday that, if approved, would end a five-weekstrike that has halted production of several aircraft programs. Factory workersbacked by the International Association of Machinists and Aerospace Workers(IAMAW) will decide on 23 October whether to ratify the new contract, Boeing andthe union said. Only a simple majority — 50pc plus one — will be needed todetermine the outcome of the vote. The new deal includes a general wage increase(GWI) of 35pc spread over four years and a ratification bonus of $7,000, both upfrom 25pc and $3,000, respectively, from Boeing's initial offer from 8September. The company also would bring back its incentive plan and increaseemployee retirement benefits. It remains to be seen whether workers will approvethe agreement after overwhelmingly rejecting Boeing's first proposal, whichincluded a 25pc GWI, by a vote of 95pc. Union leadership urged consideration ofthe offer, saying "it warrants presenting" to members. Boeing said it lookedforward to its employees voting on the negotiated proposal. The work stoppage,which began 13 September, has paused output of Boeing's flagship 737 Maxaircraft, along with its 767 and 777 programs. The company announced it would belaying off 10pc of its workforce and would delay first deliveries of its new777-9 commercial jet — part of its new 777X widebody family — as a result of thestrike and other operational challenges. Recent estimates from Anderson EconomicGroup put Boeing's losses at $4.5bn over the course of the strike. Costs to thecompany's suppliers were estimated at nearly $1.8bn in the same time frame.Spirit Aerosystems, which Boeing is in the process of reacquiring, said onFriday that beginning 28 October it planned to start furloughing 700 employeeswho work on the 767 and 777 programs. Spirit produces shipsets for thoseaircraft and no longer has storage capacity to warehouse new production, havingbuilt up "significant inventory" because of the strike. By Alex Nicoll Sendcomments and request more information at [email protected] Copyright ©2024. Argus Media group . All rights reserved.

London, 18 October (Argus) — Buyers in the automotive supply chain are seekingprice cuts of €200/t from EU mills for 2025 annual deals. The gap between theannual 2024 contracts and current spot market levels has reached anunsustainably large delta, automotive-facing service centres told Argus. Someautomakers are paying as much as €250/t more than general industrial buyers, afigure that they want to reduce dramatically. Argus ' daily northwest EU HRCindex was €551.50/t on 17 October, down by €198/t since early February, whilethe daily Italian index was €545.50/t, down by €208.50/t. Some service centressaid automakers may even push for shorter-term deals as a result, but they oftenreduce their volume offtake and postpone deliveries when required, which somecall a built-in 'call option' — a call-option gives buyers the ability topurchase if the market reaches what they view as an agreeable price. Automakersat present are delaying call-offs, which has exacerbated the supply and demandimbalance for steelmakers looking to churn out high volumes to secure carboncredit allowances for next year. One service centre said it is budgeting for a€100/t drop as mills are trying to maintain rollovers, with little support fromthe market environment. One large buyer called the recent increases in EU a"dead cat bounce", with little support from demand. Mills might manage to stemthe declines to about €75/t, another said, which would still leave automotivedeals at a hefty premium to spot market levels. One mill executive called theautomotive demands "impossible", suggesting momentum would strengthen in thecoming weeks as buyers look to procure first-quarter supply. A reduction inimport volumes, existing anti-dumping investigations and other potential casescould contribute to this, alongside an expected cut in EU supply in the newyear. Some automakers last year pushed to move to index-linked deals that wouldenable them to hedge their coil exposure on CME Group's north Europeanhot-rolled coil contract. Automakers have been hedging their aluminium exposurefor years and want to do the same for steel. If mills deem the market to be atits low, indexed deals could be a more attractive proposition this year. ByColin Richardson Send comments and request more information [email protected] Copyright © 2024. Argus Media group . All rightsreserved.

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Flat steel prices have experienced unprecedented volatility since 2020. Against this backdrop, an increasing number of buyers have started to link their purchasing to price indexes.

The market for importing hot-rolled coil (HRC) to the EU is being driven by a growing number of external factors that are widening differentials for prices from various origins, creating the need for new price assessments that improve transparency for an increasingly complex market.

The steel industry is a global colossus. Each year 6 billion tonnes of steel and steelmaking materials are moved around the world by truck, rail and ship. Despite a relatively light per tonne carbon footprint, the sheer size of the boot means the sector accounts for 7-9% of global CO2 emissions.

The rise of the Chinese steel market has moved in lock-step with the development of the country’s economy. Crude steel output soared since the start of the millennium and that spurred raging raw material demand, which upended the coking coal and iron ore markets.

By 2012, China had established itself as a source of steel without peer, and while export volumes have moderated since then, China still exerts the dominant influence over Asia’s steel pricing.

In March 2019, the London Metal Exchange (LME) launched a new FOB China HRC futures contract to help market participants to manage their price risk. The contract is settled against the monthly average of the daily price assessments published in our Argus Ferrous Markets and Argus Global Steel services, and it has rapidly established itself as the most successful finished steel futures launch to-date.

Current European steel capacity is most densely concentrated in an area encompassing parts of France, Germany and Benelux. While capacity has rationalized, the European industry has proven resilient throughout decades of change and faces the problems of raw material and finished goods price volatility as well as globalized price competition.Steel prices remain regional by nature and, like Asia, Europe is only beginning to experiment with steel price indexation. To support market participants with their price risk management, CME Group launched a North European HRC futures contract in March 2020. The LME has announced plans to launch their own N. Europe HRC futures contract in late 2020.Argus has been selected as the provider of choice by both exchanges, and both futures contracts will be settled against the monthly average of the daily Argus price assessments provided in our Argus Ferrous Markets service.