Day: 23 February 2021

After recovering in December, crude steel output in Italy ticked up in January by 0.7% year-on-year to 1.8 million tonnes, according to data issued by local steelmakers association Federacciai.

Italian flat product output also increased, by 2.8% to 932,000t, while longs production rose notably last month, by 5.3% to 933,000t, Kallanish notes.

In full-year 2020 Italian crude steel production was 20.4mt, down 11.9% compared to 2019. Long output fell by 9.5% to 11.1mt. Flats production fell by 15.9% to 9.5mt, Federacciai says.

Last week saw the official completion of sections II and IV of offshore windfarm Borssele located about 22km off the coast of Zeeland province, the Netherlands. Construction involved MHI Vestas and Sif, with plate supplied by Dillinger, Kallanish learns from the German steelmaker.

The operator consortium is Blauwwind, which consist of Shell, Eneco, Van Oord and Mitsubishi subsidiary Diamond Generating Europe.

Dillinger supplied around 70,000 tonnes of thermos-mechanically rolled heavy plate for the monopile foundation structures, with plate thicknesses ranging from 12.7-88mm. Some of the slab reached record weights of more than 42 tonnes, Dillinger notes.

The 77 wind turbines of Borssele III and IV have a capacity of 730MW and will supply approximately 825,000 Dutch households per year with environmentally friendly electricity, the operators say. The four sections of Borssele form a 122km² wind farm zone. With a total capacity of around 1.4GW, it is the largest wind farm zone in the Netherlands to date.

The Russian government is implementing over 150 infrastructure investment projects worth more than RUB 610 billion ($8.1 billion) in 26 regions, according to deputy prime minister Marat Khusnullin.

In October 2020, the government approved a mechanism that allows regions to write off debt on budget loans. At the expense of the freed funds, the regions will build infrastructure for new investment projects. Last week, during a meeting of the government regional development committee, a list of such investment projects was considered.

“Most of the projects will be implemented in different industries, as well as housing construction, agriculture and logistics,” Khusnullin says.

The largest number of projects were submitted by the regions of the Central and Volga federal districts. Among the leaders are also the Novosibirsk, Omsk region and Krasnodar region. The selection takes into account the ratio of private investment and budget funds allocated for the projects, as well as the number of new jobs created.

Earlier, the Russian government announced it will invest RUB 28 billion into the construction of social infrastructure like schools, hospitals, kindergartens and other significant social and engineering infrastructure (see Kallanish passim).

Russia also foresees big investments into the construction of residential real estate by 2030. Overall investment here will be about RUB 50 trillion.

Construction accounts for over 50% of global steel consumption and over 70% in Russia, according to Russian market participants.

Before the Covid-19 pandemic, market sources predicted that by 2030, the annual consumption of steel by the construction industry in Russia may grow to 39 million tonnes.

Russian steelmaker Evraz expects that domestic construction steel demand should increase by 3-5% in 2021, driven by rebar after its consumption fell in 2020.

Coil distributors and processors are becoming impatient about the prices being pushed by European mills, and yet more so about a material shortage which is not understood, they tell Kallanish.

In particular, buyers have little sympathy with the reasons given by mills for the supply shortage, considering since autumn most idled blast furnace have come back on stream.

“The mills’ performance is surprisingly poor, even the premium mills,” says one German buyer. “Why is that so, when the books are full?” Quite recently, high water on some rivers and a cold winter period in northern and eastern Germany were cited by mills as obstacles. Because of that, Salzgitter declared force majeure, and thyssenkrupp Steel’s management wrote “a really wild letter”, as the buyer puts it. “But then, those periods lasted for little longer than one week, so how could it come that far?” he asks.

A Dutch manager uses the word “shrewd” for what he deems to be the mills taking advantage of the current shortage and trying to maintain this situation. He adds that stoppages at some mills will contribute to the shortage, citing current repair work at Belgian rolling mill NLMK until March, and maintenance announced by Turkey’s Colakoglu for May.

He fears that mills may furthermore go for summer maintenance plans despite the current shortage. In fact, one major blast furnace revamp in that period has already been announced by thyssenkrupp Steel.

LIBERTY Steel Group, part of GFG Alliance Group, has signed a memorandum of understanding (MoU) with technology provider Paul Wurth and SHS-Stahl-Holding-Saar (SHS) to assess the construction and operation of an industrial-sized, hydrogen-based steelmaking plant which, if developed, would be one of the first operations of its type in France, the companies stated in a joint press note on Feb 22. The companies will team up on a project to incorporate a 2 million mt/year direct reduced iron (DRI) plant, with an integrated 1 GW capacity hydrogen electrolysis production unit, next to GFG’s ALVANCE Aluminium Dunkerque site in France.

According to the press release, the DRI plant will initially use a mix of hydrogen and natural gas as the reductant to produce DRI and hot-briquetted iron (HBI), before using 100% hydrogen once the electrolysis production unit is complete. The DRI/HBI produced will primarily be used in the electric arc furnace of LIBERTY special steel producer Ascoval in France but any surplus will be used at LIBERTY’s Ostrava and Galati integrated steelworks as well as the SHS-group’s Dillinger and Saarstahl plants in Germany.

LIBERTY has been working with Paul Wurth and SHS on the technical and economic viability of the project since early last year. The MoU covers two phases: Phase 1 is expected to take around 12 weeks and will improve the accuracy of the project’s commercial and technical feasibility and Phase 2 will deliver the level of detail required for the effective implementation of the project.

“This project will realize the potential of steel and hydrogen working together to solve each other’s problems. Our industry needs to reinvent steel production fast, as the need to cut our emissions gets ever more pressing against a backdrop of rising global demand for our products and legislative pressure to become carbon neutral..,” said Sanjeev Gupta, executive chairman of GFG Alliance and LIBERTY Steel Group.

LIBERTY declined to comment on the investment envisaged for this project when asked by S&P Global Platts.

— Annalisa Villa