UK Metals Expo Q&A: Trasteel Trading’s Lauro Castelo

A year after a UK Metals Expo panel debate explored the EU’s CBAM imports regulation, Trasteel’s Lauro Castelo has described the scheme’s complexity as being “off the chart”.

The stainless steel trader was part of MEPS’s expert panel at last year’s event and will return to the stage for this year’s Stainless Steel Market: Exploring Trends and Price Dynamics debate, at the NEC Birmingham, from 11.30am on September 12. 

Trasteel is an importer of steel products into the EU and United Kingdom, specialising in the distribution and trade of both flat and long products.  

Providing a taste of the likely topics to be discussed at the NEC Birmingham, Castelo highlighted the influence of CBAM, EU trade defence measures and exchange rates on the business’s first 18 months of trading. 

• MEPS’s presence at UK Metals Expo 2024 will be centred around its stand, B50. Click here to book a free consultation with a market analyst.  

Read Castelo’s full Q&A below: 

How would you describe your 12 months in the steel industry since the UK Metals Expo 2023?  

I would say more interesting, for sure. At Trasteel, we started business with a blank piece of paper in March 2023. Our average monthly tonnage in the run-up to the UK Metals Expo last year was in the region of a few hundred tonnes only. In the past 12 months that has risen quite significantly, as markets started to improve and our team, in the various regions – including South America and the Far East – do a very good job in supporting our suppliers and customers. We’ve been able to grow fairly quickly, but that’s not the full story. It has been a challenge. In the run-up to September last year our momentum slowed down significantly because, from March-2023, domestic prices in Europe – our largest market – were significantly down, which did nothing to stimulate demand. There have been more challenges this year. As the market is now, provided European scrap prices don’t go significantly lower, we can’t see stainless steel prices heavily dropping. 

What have been the major challenges for your business during that period? 

The European Commission’s anticircumvention investigation into cold rolled coils from Asia, which started August last year, was probably our biggest challenge. It meant that, realistically, we could only count on very few origins for an extended period of time. There was also a challenge related to import taxes in Brazil in the period, which cast a grey cloud over the business as people were uncertain about what they needed to do. 

What were the biggest opportunities for your business in the past 12 months? 

There were three phases of opportunity. Firstly, in May last year, Europe’s domestic steel prices were below those being offered from Asia, which slowed trading activity. But, as that dynamic shifted in October and November, we were able to assist our customers with their restocking. The second period of opportunity, for Trasteel, came when the exchange rates started to move away from their parity level from February this year. That helped increase the price difference between Europe’s domestic prices and Asian imports. The third opportunity came in May when the European Commission concluded its anticircumvention investigation. At that point we restarted working with more origins as well, which helped. 

The EU Carbon Border Adjustment Mechanism (CBAM) was a hot topic at last year’s event. Has your business been affected by this and are you making any preparations for the UK version? 

In the past six months customers have started asking more about CBAM because they’ve had to start reporting on the embedded emissions of their imported material. The regulation is really starting to tighten, but I still feel many people that need to comply with CBAM don’t know enough about what they need to do. The clarity of information is not there to support them, and the complexity is off the chart.  

Which steel industry ‘hot topic’ are you most keen to hear or learn more about at UK Metals Expo 2024? 

I’d like to hear people talk more about demand and supply, macroeconomics, fundamentals of our market, and how that picture is unfolding. What I really want to know is how we get back to a position where key sectors, like automotive and construction, start to recover and what we can do to support that process.