Day: 23 June 2021

Swedish steelmaker Ovako will install an electrolyzer for the production of fossil-free hydrogen at its site in Hofors, the company said on June 22. The 17 MW plant will generate 3,500 cubic meters of fossil-free hydrogen per hour and is expected to be completed by the end of 2022, provided that permits are secured as planned, the company said.

The new unit, once functional, will make Ovako the first in the world to use power generated from hydrogen to reheat steel before rolling.

The use of the hydrogen will enable Ovako to reduce its CO2 emissions during steel production in Hofors by 50%, the company said. The steel industry, which accounts for 7-8% of total CO2 emissions worldwide, has been under pressure to reduce its emissions as the EU strives for carbon-neutrality with net-zero greenhouse gas emissions by 2050, S&P Global Platts reported earlier.

Ovako produces around 400,000 mt/year of long steel products in Hofors, mainly for the automotive and mining industries as well as wind power sectors. Ovako produces around 1 million mt/year of steel products. The company targets to use the hydrogen that it produces in all of its steel rolling units by 2030.

The project, worth approximately SEK 180 million ($21 million) aims to establish an industry-wide use of fossil-free hydrogen. There are also good opportunities for cost-effective and large-scale use of hydrogen in other areas, such as transportation but it can also improve electricity grid stability, while the residual heat can be utilized in district heating networks, the company said.

The project is also supported by Volvo Group, Hitachi ABB Power Grids Sweden, H2 Green Steel, Nel Hydrogen and the Swedish Energy Agency.

“Decentralized hydrogen production in the steel industry fits very well with the transport industry’s need for fossil-free fuel. This technological solution is scalable because it can be used by the steel industry in large parts of the world. Working in partnership with other industries to be involved in the entire value chain around our transport solutions is essential,” said Lars Stenqvist, Chief Technology Officer at Volvo Group. A filling station for hydrogen-powered heavy vehicles is also planned to be built beside the hydrogen plant.

“This exciting collaboration will test new value chains, and we look forward to acquiring knowledge about how an electrolysis plant can interact with the existing electricity network and become an important resource for its stability,” said Jenny Larsson, Managing Director, Hitachi ABB Power Grids, Sweden.

— Annalisa Villa

European steel markets are developing customers interested in securing low carbon emissions-based steel products at higher prices, according to the Austrian Mining and Steel Association.

New low-emissions steel plants and investments will require breakthrough technologies, finance and competitive energy prices, as well as supportive markets and legislation, Roman Stiftner, managing director of the Austrian Mining and Steel Association, said June 22.

“We need the customers, we need a green market,” Stiftner said in a presentation to the Sustainable Steel Strategies Summit, in association with Steel Times International.

“We are seeing already that there are a lot of customers that are ready to pay a bit more for so-called green steel, and therefore maybe for a different price level,” Stiftner said. “I think this is a good situation that we have all this transformation available in the society and together with industry we can solve it.”

Higher production costs for low-emissions steel and demand for increasingly high-grade steel raw materials and clean energy as well as metals supporting the energy transition, will need to be supported by consumers and regulation, such as the EU’s proposed Carbon Border Adjustment Mechanism (CBAM), he said.

Austria’s Voestalpine plans to use hybrid and hydrogen-based steel technology in several phases with renewable power to slash emissions by 80% in 2050, which will likely increase operating costs, said Stiftner. ArcelorMittal is using hydrogen and carbon-based steel processes at several sites in Europe to cut emissions and is already selling flat steel with certificates for carbon emissions reductions achieved.

Steelmakers SSAB and Ovako are working with truckmaker Volvo Group on separate initiatives to use hydrogen-based steel products, with lower emissions. SSAB and partners produced its first hot-briquetted iron from the HYBRIT direct reduction iron pilot plant in northern Sweden, using green hydrogen biofuels-fired iron ore pellets, which will be used to make steel for trials with Volvo.

Ovako said June 22 it is developing Sweden’s largest hydrogen facility with a 17 MW electrolyzer at Hofors for heating steel, in collaboration with Volvo, Hitachi ABB Power Grids Sweden, H2 Green Steel and Nel Hydrogen. The investment of SEK180 million ($21 million) is supported by the Swedish Energy Agency, via the Industriklivet initiative.

Steelmakers may need a financial state aid regime for green sustainable investments, in addition to the CBAM.

“We have to finance this transition, we have a lot of funds available in the EU, and overall we are now on the way to find a sustainable financing regime, a so-called taxonomy regime” Stiftner said. “Definitely the steel sector must be a part of it, and must be the main affected sector in a positive way for sustainable finance.”

Stiftner is also managing director of the Austrian Non-Ferrous Metals Association and Secretary General of EUMICON, the European Mineral Resources Confederation.

— Hector Forster

Global crude steel production went up in May by 16.5% year on year to 174.4 million metric tons (mt), marking a continuing recovery by the sector from the impact of COVID-19, the World Steel Association reported June 22.

The rise in production was triggered again by China, the world’s top producer and consumer of steel, registering an output increase of 6.6% on year to 99.5 million mt in May.

Top 10 steelmaking nations

Following China’ substantial lead, India was the next biggest May producer at 9.2 million mt, up 46.9%. Japan produced 8.4 million mt, up 42.2%. The US produced 7.2 million mt, up 47.6%.

Russia is estimated to have produced 6.6 million mt, up 14%. South Korea is estimated to have produced 6 million mt, up 10.5%. Germany produced 3.5 million mt in May, up 35.5%.

Turkey produced 3.2 million mt, up 42.4%. Brazil produced 3.2 million mt, up 40.1%, and Iran is estimated to have produced 2.6 million mt, up 7.7%, worldsteel said.

Blast furnace iron

Iron produced in blast furnaces amounted to 117.22 million mt in May, up by 7.6% from May 2020. In January-May, this amounted to 570.67 million mt, up from the 531.4 million mt registered during the same period a year ago.

Direct reduced iron output in May was 8.65 million mt, up from 7.27 million mt registered in May 2020. In January-May, DRI output was 42.85 million mt, up from 36.84 million mt a year ago, worldsteel reported.

— Annalisa Villa

Germany will have to spend huge sums and make more reforms in order to build a climate-friendly economy, German chancellor Angela Merkel said on Tuesday. One challenge will be to retain the national steel industry will pushing towards climate neutrality.

“We will have to spend gigantic sums in the next few years,” she said during Industry Day in Berlin. “On the one hand, this is the task of the economy, but there are areas in which it cannot be done without government support. This means also the expansion of European microchip production or the production of battery cells for electric vehicles (EVs).”

Merkel said the planned higher climate targets had not yet been spelled out.

“A new forecast about electricity demand up to 2030 is urgently needed and it can be assumed that more electricity will be needed,” she observed.

The chancellor also said approval procedures would have to be accelerated when expanding renewable energies and power lines, so planning management has to get better, Kallanish notes.

CDU party leader and potential next chancellor Armin Laschet said: “We want to be a climate-neutral industrial country. However, Germany must still have an auto, chemical and steel industry in 20 years and still be climate neutral.”

The Federation of German Industries (BDI), which organised Industry Day as a hybrid conference, warned that supply bottlenecks and raw material shortages were jeopardising the economic recovery.

“A shortage of semiconductors is already leading to sometimes far-reaching production restrictions in the automotive industry,” said BDI president Siegfried Russwurm. “The problems affect the entire supply chain.”

According to Russwurm, there are bottlenecks not only in semiconductor chips, but also a lack of plastics, packaging material, steel and metals. “It remains to be seen how strongly this topic will ultimately have a negative impact on economic indicators,” he added.

Green party chancellor candidate Annalena Baerbock offered the industry solidarity in climate protection. “We will only be able to do it together,” she said at the forum. Baerbock reaffirmed the idea of ​​an “industrial pact”. The basic idea behind this is that the state should bear additional costs for more climate-friendly production methods until they pay off.

In the case of hydrogen, Baerbock spoke out against funding it with a watering can. “There will probably not be enough hydrogen to be used in all industries. You don’t need hydrogen in small cars, there are alternatives there, but not in the steel industry.”

Svetoslav Abrossimov Bulgaria

Import offers for hot rolled coil into Europe have started looking up again since last week, as the foregone conclusion of the continuation of safeguard measures for another three years circulated in the market.

Traders note the market is relatively silent in terms of bookings, but offers have increased again after a few weeks of coming down.

Indian suppliers are reported as the most competitive, at just under €880/tonne ($1,048) cif Italy. However, buyers are advised to take into account the additional 25% safeguard duty, as most new quotas will be filled by previously-ordered material as soon as they become available.

Other Asian suppliers are reported to be offering at €1,000-1,060/t cfr southern Europe, with shipment from end-August onwards. €1,050/t cfr is also the price reported for HRC from North Africa, Kallanish hears.

Since the end of May, import offers for HRC had been moving towards under €1,000/t cfr southern Europe, but now all market observers say securing HRC for less than €1,000 is virtually impossible. This is because the confirmation of safeguard measures has put new pressure on the future availability of HRC from non-EU sources.

Emanuele Norsa Italy