German steelmaker Salzgitter expects strip supplies to decline until the end of 2024

German producer Salzgitter expects strip steel supplies to remain at slightly lower levels through the end of 2024, long steel supplies to remain roughly the same and crude steel production to proceed at a slightly slower pace, according to the company's interim report dated Aug. 12.

In the first half of the year, Salzgitter produced 2.69 million metric tons of crude steel, up slightly from the same period in 2023, which recorded 2.51 million tons. During the same period, shipments totaled 2.81 million tonnes, up from 2.77 million tonnes in the first half of 2023, but supply sales fell to 2.47 million tonnes from 2.69 million tonnes.

Salzgitter said it expects weak economics in the plate steel market to continue, with projected order volumes "falling below already weak levels last year and prices coming under strong pressure."

The company said the tube plate business is likely to benefit only towards the end of the year due to delays in the distribution of large diameter pipe projects, while the medium diameter pipe segment is likely to see a significant drop in volumes. In the precision tubes group, demand remains weak after the previous year, it said.

In the first half of this year, the steel business division of Salzgitter rolled 520 thousand tons of steel products, compared to 538 thousand tons recorded for the same period in 2023.

The trading business is expected to deliver overall improved results in 2024, driven by more stable prices than in the first half of 2023.

Platts, part of S&P Global Commodity Insights, priced the 62% Fe Iron Ore Index at $98.85 per dry metric ton CFR North China on August 12, down 45 cents per dry ton from August 8, in line with market prices .

Salzgitter said it is also on track to implement its low-carbon transformation program, which aims to completely repurpose the Salzgitter Flachstahl steel plant by 2033. The company is currently constructing a 100 MW electrolysis plant, a direct reduction plant and an electric arc furnace.

Platts priced north-west European hot-rolled coils on a carbon basis at €725/t ex-Ruhr on August 9, down €10 on the day.

The estimate was calculated based on the sum of Platts daily carbon steel estimates and Platts daily hot rolled coil estimates in North West Europe.