Increases in European blast furnace coke prices

There is much talk at present of the marked increases in world iron ore prices, in the last 12 months.

 

However, we notice that blast furnace coke prices have also increased very dramatically. European  metallurgical coke has increased from ~$200/t at the start of the year, to near on $300/tonne in April 2021 (export prices, fob basis). That is equivalent to a price increase of around 50%.

 

For recent and historic European coke prices, visit us at https://www.steelonthenet.com/files/blast-furnace-coke.html.

 

Andrew M Kotas

 

Gas price movements - Europe and the USA

US natural gas prices have behaved very differently from European and other gas prices during 2011. US prices [Henry Hub spot prices, Louisiana, fell significantly over this period, from $162 to $114 / 1000m3, whilst European prices [Russian gas, delivered to German border] rose markedly, from $331 to $436 / 1000 m3. For actual prices, see http://www.steelonthenet.com/commodity_prices.html for prices in Europe and http://www.steelonthenet.com/files/natural_gas_prices_USA.html for prices in the United States.

The difference in price behaviour seems to be explained by the shale drilling boom in the United States - which may soon swell the nation’s underground storage network - and which is resulting in excess gas supply.

Nonetheless, with a difference in prices that is now close to four-fold, it seems clear that regional supply and demand has a major influence on the pricing of this particular commodity.

European flat product markets remain subdued

MEPS just reported more gloomy news from the European flat rolled markets. According to a report published today:

 

-          buyers feel that prices still have some way to go downwards, and are holding off placing new orders

-          Steel service centres are keeping inventories low because they are unclear about the direction of steel prices

-          The German strip market is described as difficult

-          French buyers remain very cautious given the current economic and financial uncertainty in the EU

-          Whilst the Italian economy remains weak so market sentiment remains dampened.

 

For original report, see http://www.meps.co.uk/Keynote10-11.htm. Let us hope for more positive news as the New Year approaches.

 

blogger@steelonthenet.com

 

European coke prices

We now show European blast furnace coke prices on our website. The data indicate recent and historic metallurgical coke prices [f.o.b. export prices] in Euro per metric tonne. Visitors should go to http://www.steelonthenet.com/files/blast-furnace-coke.html.

 

blogger@steelonthenet.com

Steel price forecast for 2011

MEPS have just published their view of expected year 2011 steel price changes across Europe. After a 31% rise in the steel price index across 2010, the expectation is for a ‘double-digit’ percentage rise in EU steel prices in 2011.

For further information, see the MEPS report at http://www.meps.co.uk/keynote12-10.htm.

blogger@steelonthenet.com

Engineering steel in Europe

Steel industry advisers Metals Consulting International have just published an in-depth review of the European engineering steel sector.

In a February 2010 report of ~50 pages, the authors discuss the supply and demand for engineering steel.

Across Europe, 53 producers of engineering steel bar [also known as special bar quality steel, or SBQ] are identified. With a handful of these plants having engineering steel bar capacity at or over 500kt/year (facilities that are located in Germany and in Eastern Europe), average European plant scale is close to ~240kt with the smallest average size being found in Central Europe. Total European output of all 53 facilities is assessed at ~8.4 mt of production in 2009.

Whilst Germany dominates European SBQ trade as a main importer, and Russia is notable as a major exporter, European demand for engineering steel bar is estimated at 8.2mt. This is for 2009, against a world consumption estimate of ~34mt. The European demand of 8.2mt is some 37% down on 2007 consumption levels of ~13mt, with SBQ demand especially hard-hit in Western Europe. SBQ demand collapses since 2007 are assessed as near to ~50% in Western Europe, under 10% in Central Europe but intermediate in Eastern Europe, recent patterns in automotive output being largely responsible for these changes.

Looking forward, with year 2009 consumption very much seen as the ‘low point’ in European engineering steel demand for the period 2007-2013, a slow recovery is foreseen in European SBQ demand. This recovery, whilst not anticipating overall European return to 2007 demand volumes until after 2012, assumes much faster recovery in Central Europe [by 2010] and in Eastern Europe [by 2011], with a return to 2007 production levels in Western Europe only expected around 2014. Gradual relocation of automotive component manufacture to modern large-scale plants in the lower labour cost countries of Central and Eastern Europe is the principal factor shaping this recovery in favour of the former Eastern bloc states.

A number of industry scenarios are outlined for the European engineering steel sector across the medium term. These include supply side consolidation in Germany; passive exit from SBQ production by marginal suppliers wishing to optimise their product mix; large-scale SBQ facility investment in Central Europe; medium-scale SBQ facility investment in Eastern Europe; selected engineering steel asset sales in Romania; outright SBQ business disposals by some of the volume steelmakers; and facility restructuring at selected sites. Probabilities are assigned to each of the scenarios. Reduction of competition in engineering steel production through European M&A activity or plant closure with relocation across Europe from West to East and / or through passive exit from SBQ steel production are judged as high probability outcomes.

Priced at Euro 995, the new report is available for purchase from http://www.steelonthenet.com/SBQ.

blogger@steelonthenet.com

NOTES

About Metals Consulting International Limited [‘MCI’]

Metals Consulting International Limited is a UK-based firm of management consultants who provide clients worldwide with independent consulting services relating to the international metals industries. Services include assistance with steel sector strategy formulation, due-diligence, restructuring, modernisation, business planning, performance turnaround and profit improvement.

About Engineering Steels [‘SBQ’]

Also known as special bar quality or SBQ, engineering steel can be defined as steel that moves [rotates, twists or bends] rather than stand still whilst in use – usual applications extend to crankshafts, gearbox gears, suspension arms, automotive springs and hydraulic components.

Steel price forecast - European long products

Falling international scrap prices are expected to lead to a decline in transaction prices for EU long products in the coming months according to an assessment just published by MEPS.

Coupled with a slowdown in construction over the winter months, this trend is likely to lead to a sharp decline in rebar prices in Europe as the end of the year arrives. A price correction can then be expected in the beginning of 2008.

For original MEPS report, see http://www.meps.co.uk/medium-carbon-steel-price-forecast-eu6-07.htm.

blogger@steelonthenet.com