Six steel associations came together for a UK Steel Forum

Yesterday the 1st UK Steel Forum took place in London at the iconic Ironmongers’ Hall, with links to the iron trade for over 700 years.

This event co-organized by EUROMETAL and the 5 trade associations BCSA, BIRFA, ISTA, NASS and UK Steel brought together 85 participants.

Our president Fernando Espada started the event by welcoming all the participants and praising the result of a common organization of several associations united for the benefit of the entire steel industry.

The meeting continued with the UK, Europe and the World economic outlook presented by Matt Watkins from CRU and trade data on UK production and imports in 2022 with outlook 2023 presented by Steve Andrews from ISSB.

During the afternoon, Gina Swenters and Peter Larose from the Conti-Lines Group drew attention to the problems caused by Covid and the conflict in Ukraine in the logistics sector and Gabriele Coppo, partner of law firm Van Bael & Bellis based in Brussels and London, addressed the latest developments in international trade relevant to the UK steel sector.

The event concluded with a dialogue between Julian Verden (Stemcor) and Gareth Stace (UK Steel) highlighting and summarizing the main issues affecting the UK Steel Industry and advocating collaboration between the associations to better defend and protect it.

Global steel production falls 3% on year in August: worldsteel

Global crude steel production totaled 150.55 million mt in August, down 3.0% year on year, although it was 1.1% higher than July’s six-month low, according to World Steel Association data published Sept. 22.

This brought total production for the first eight months of 2022 to 1.25 million mt, down 5.2% on the year.

China produced 83.9 million mt in August, up 0.5% from a year ago and rising 3.0% from July’s six-month low, making up 55.7% of total global crude steel output.

This brought January-August steel production in China to 693.2 million mt, down 5.7% year on year.

The world’s second-largest steel producer India also saw production grow 1.2% year on year in August to 10.2 million mt, which was also up 1.7% month on month, the data showed.

India’s cumulative January-August output also rose 7.1% to 83.5 million mt, according to worldsteel.

Japan’s August production was 7.3 million mt, down 7.4% on the year but up 0.2% from July’s six-month low, with January-August output down 5.2% on the year to 60.7 million mt.

US output in August of 7 million mt was down 7.1% year on year but up 1.1% on the month, taking January-August production to 54.9 million mt, down 3.7% year on year.

Russia was estimated to have produced 5.9 million mt in August, falling 5.5% from August 2021 and down 1% from July, bringing its estimated January-August output to 48.9 million mt, down 5.8% on the year.

South Korea produced an estimated 6.1 million mt of crude steel in August, down 0.4% year on year and 0.1% lower month on month, with the eight-month volume down 3% on the year to 46 million mt.

Europe January-August output down 7.3%

For Europe, including the UK and Turkey, crude steel production fell 14.8% on the year in August to 13.3 million mt, which was also down 9.1% from July to the lowest monthly volume since April 2020, the data showed.

Europe’s January-August volume was 126.13 million mt, dropping 7.3% on the year.

Germany, the largest steel producer in Europe, saw its crude steel production fall 2.3% on the year in August to 2.9 million mt, which was also down 3.3% on the month to a two-year low, as high energy costs dented demand and the auto sector remained impacted by the ongoing semiconductor chip shortage.

In January-August, Germany produced 25.4 million of crude steel, down 4.8% year on year, the data showed.

Domestic prices for hot-rolled coil in Europe have been weakening since the second half of March on low demand, with Platts assessing domestic HRC prices in Northern Europe at Eur740/mt ex-works Ruhr Sept. 21, down 19.7% since the start of 2022, according to S&P Global Commodity Insights.

Turkey August production down 21% on year

Turkey’s August output also fell 21% year on year to 2.8 million mt, according to the data, although this was up 3.8% from July’s volume. Eight-month production was down 8.8% on the year to 24.4 million mt.

Brazil produced 2.8 million mt in August, down 11.3% year on year, but up 0.6% from July, while Iran’s monthly output was at 2.1 million mt, up 64.7% on the year and 2.6% higher than the previous month.

Brazil’s January-August production fell 4.5% on the year to 23.1 million mt, while Iran’s output for the eight-month period rose 7.8% to 19.5 million mt.

August production of pig iron from 38 countries was 106.3 million mt, down 3.8% year on year, the data showed, while direct reduced iron produced worldwide amounted to 8.7. million mt, up 13.0% year on year, the data showed.

Pig iron output over the January-August period totaled 865.15 million mt, down 5.3% year on year, while DRI production for the period rose 6.9% on the year to 73.4 million mt.

Crude steel data covers the 64 countries that report to worldsteel, accounting for about 98% of the world’s crude steel production.

— Jacqueline Holman

Ukraine’s Metinvest says studying construction of DRI-fed EAF steel plant in EU

Ukrainian mining and steel company Metinvest is studying options for the construction somewhere in the EU of a plant to process the company’s iron ore into direct reduced iron (DRI) and then convert it into steel, according to Metinvest CEO Yyriy Ryzhenkov, with Italy or Bulgaria seen as the likeliest options.

Initially, Metinvest had been considering expanding rolling capacity at its plate and coil mill Ferriera Valsider in the province of Verona, Italy, or building a finishing facility to process slab shipped from Azovstal Iron and Steel Works in Mariupol, in east Ukraine’s Donetsk Oblast, which is currently under Russian occupation.

Now, with Azovstal slabs unavailable for the foreseeable future, the company is looking at shipping iron ore to the EU instead, converting it into DRI and then smelting it into steel. Routes for iron ore transportation into the EU that are already in place could be expanded if necessary, Ryzhenkov said in an interview with local media. The company confirmed his comments following a request by S&P Global Commodity Insights.

In early 2022, Metinvest said it intended to replace the majority of its blast furnaces and basic oxygen furnaces at its two Mariupol-based steelworks — Azovstal and Ilyich — with electric arc furnaces by 2040, with the first EAF and at least one DRI module expected online by 2030.

With eastern regions of Ukraine being occupied and investments in industrial upgrades elsewhere in Ukraine deemed unrealistic for the time being, Metinvest is looking for ways to offset its slab capacity losses.

In Q2 2021, the company allocated $1 billion to revamp its rolling operations at Ilyich and contracted Italian engineering company Danieli to supply a 1.6 million mt/year cold-rolling, galvanizing and color-coating complex. The company also intended to complete the construction of the air separation plant at Ilyich and to rebuild de-dusting systems at Azovstal’s BOF shop.

At this stage, it is not clear though whether those investment commitments could now be switched to secure different equipment for the potential EU plant, which would turn Metinvest’s iron ore into high value-added steel products.

The company had already been developing the production of DR-grade pellets at its Central iron ore mining and beneficiation complex (GOK) in Dnipropetrovsk region, eastern Ukraine, since 2020, with 2021 output reaching 2.2 million mt, and before the war it was looking to set up a 5 million mt/year capacity DR-grade pellet plant at its Severny, or Northern, GOK too. However, although Severny has recently tested the production of high-quality pellets, as a prerequisite of improving it further to DR-grade material, implementing the project in full requires investments, and these will not be possible while the war is ongoing.

To feed its re-rolling mills outside Ukraine — in Bulgaria, Italy and the UK — Metinvest continues to sourcing third-party slabs, including from Southeast Asia and the EU, where it purchases semis from Italian flat steel producer Acciaierie d’Italia.

In addition, the company has developed production of rolled slabs at its 49%-owned Zaporizhstal iron and steel works in Zaporizhia, south Ukraine, which processes ingots supplied by long-rolled steel producer Kamet Steel, based at Kamianske in Ukraine’s Dnipropetrovsk region.

— Ekaterina Bouckley

Decarbonising ferrous needs $1.4 trillion investment: Wood Mackenzie

Decarbonising the steel and iron ore industry by 2050, in line with the Paris Climate Agreement, will require $1.4 trillion of investment and revolution across every stage of the value chain, Wood Mackenzie says.

This presents an urgent challenge and enormous opportunity, Kallanish reads in the consultancy’s research report.

The report points to the industrialised world’s reliance on steel, with 2.2 billion tonnes of production required to meet global steel demand by 2050 – a 15% increase from 2021.

From iron ore mining to steel manufacturing, the industry is highly carbon intensive. Iron and steel production emit a combined 3.4 billion t of carbon annually – equal to 7% of global emissions.

“Decarbonising the steel industry is a staggeringly big task. To meet Wood Mackenzie’s 1.5°C accelerated energy transition scenario by 2050, steel emissions must reduce by 90% from current levels. There is an urgent need to act now to decarbonise the iron and steel sectors. Business as usual is no longer sustainable,” says Malan Wu, research director at Wood Mackenzie and lead author of the report.

Wood Mackenzie’s shows $800-900 billion will be essential to abate carbon from existing steelmaking infrastructure, such as setting up new hydrogen-based direct reduced iron and electric arc furnace plants.

“Mining companies will need to play an active role in cutting their operational emissions as well as invest in new high-grade mines and green pellet capacities to feed green steel. In turn, this will require five times the current supply of high-grade pellet feed, an equivalent to 750 million tonnes, translating into an investment of $250-300 billion,” the consultancy says.

To achieve net zero by 2050, it says three-quarters of steel production will have to use low-carbon technologies, requiring the commercialisation and uptake of new technologies such as DRI and molten oxide electrolysis running on renewable energy.

Switching to clean energy will also require around 2,000 gigawatts of dedicated renewable generation capacity, equivalent to two-thirds of current global renewable generation capacity.

“A hydrogen ecosystem will also need to be developed for green steel, as decarbonisation will require around 50 million tonnes per annum of competitively priced green hydrogen, with commercial viability versus conventional steelmaking routes requiring green hydrogen supply at $2/kg,” Wu adds.

The report warns that these measures will still fall short of emissions targets, necessitating an incremental $200-250 billion investment in carbon offset measures, such as carbon capture, utilisation and storage (CCUS). The industry will need to capture and store 470 million tonnes of carbon to reach 2050 emission targets.

Green premiums are also inevitable, given new technologies and low carbon feedstocks are likely to inflate steel production costs by 15-20%. Steelmakers will pay approximately $100/tonne by 2050 to align themselves to a 1.5 °C goal by 2050, according to Wood Mackenzie estimates.

Siew Mung Tan Malaysia

HYBRIT starts pilot hydrogen cavern storage in Sweden

HYBRIT partners SSAB, LKAB and Vattenfall confirmed on Thursday the pilot green hydrogen storage facility to serve the fossil-free steel project is now fully operational, Kallanish reports.

The 100-cubic-metre facility at Svartöberget in Luleå, Sweden, entered a commissioning phase in June. Upon successful completion of tests, it reached the maximum operating pressure of 250 bar meeting all safety requirements.

It will now run a two-year test period to provide insight for a full-scale facility. The HYBRIT project will demand pressurised storage capacity for 100,000-200,000 cubic metres of hydrogen gas. At this scale, the facility would store up to 100 gigawatt-hour of hydrogen, enough to power a full-size sponge iron factory for about three to four days.

According to the Swedish companies, this is the first time in the world that lined rock cavern (LRC) technology is used for hydrogen storage, as opposed to typical natural gas.

“The fact that this technology is now working is great news, and is an important milestone in the development of a fossil-free value chain for ore-based iron and steel production,” comments Mikael Nordlander, Vattenfall director industry decarbonisation.

“The use of large-scale hydrogen storage means that the industry will have a more robust and plannable supply of hydrogen from fossil-free electricity, even when the electricity system becomes more dependent on the weather,” he adds.

Gabriela Farhangi UK