World’s first building with fossil-free steel inaugurated in Sweden: SSAB
- Material manufacturing accounts for most of construction’s climate impact
- Fossil-free steel contained in sandwich panels that make parts of walls
The building — Tomaten 1 — in Lund, in the southern Swedish province of Scania, is an industrial facility covering 6,000 square meters. Its wall and roof structures were designed and produced by Ruukki Construction, a division of SSAB, and parts of it were manufactured using the company’s fossil-free steel.
The SSAB Zero steel — made from scrap and renewable power and biogas with less than 50 kg of Scope 1 and 2 carbon emissions per metric ton of steel — is contained in the building’s sandwich panels made by Ruukki in Finland for parts of the walls.
SSAB currently produces SSAB Zero in the US state of Iowa, where it operates electric arc furnaces and slab casters. The company said earlier it aimed to make 40,000 mt of this premium-priced steel this year, up from 500 mt made in 2022.
SSAB claims Peab has become the first construction company globally to use fossil-free steel in a completed building project.
“For SSAB, it’s not just about reducing our own emissions…but also about contributing to reducing the carbon footprint in other parts of the value chain,” Head of Sustainability at SSAB Christina Friborg said.
Construction and real estate together account for one fifth of Sweden’s domestic carbon dioxide emissions. In new construction projects, the manufacturing of materials and products accounts for the vast majority of the sectors’ climate impact, and if the construction and civil engineering industry is to reach climate neutrality by 2045, it requires new materials and products with a low impact on the environment, SSAB said, adding that in 2026 it will bring on to the market fossil-free steel that it will manufacture in Europe using HYBRIT technology.
It has trademarked this steel as a brand covering steel that it will produce using direct reduced iron, green hydrogen and fossil-free electricity through its HYBRIT joint venture with Swedish iron ore miner LKAB and Vattenfall. For this, SSAB will deploy EAFs in Sweden and Finland to produce steel commercially without using blast furnaces and iron ore with coke, coal and oil and gas-based fuels.
Author Katya Bouckley, katya.bouckley@
Platts is part of S&P Global Commodity Insights.
EU HRC transaction prices rise, mills aim for further increases
- Two mills to restart blast furnaces in Germany
- Mills aim for stable first-half 2024 contracts
Northwest European domestic transaction prices for hot-rolled coil increased on Nov. 8, while steelmakers tried to achieve further increases.
Northwest European mills made deals at Eur645-650/mt ex-works Ruhr and Eur650-660/mt ex-works Northwest Europe. Tradable values were heard at Eur630-650/mt ex-works Ruhr.
Official offers were reported at Eur680-700/mt ex-works Northwest Europe, and some sources said that the mills were planning to increase offers above Eur700/mt ex-works Northwest Europe.
Platts assessed domestic prices for hot-rolled coil in Northwest Europe up by Eur10 on the day to Eur645/mt ex-works Ruhr on Nov. 8.
Production cuts implemented by majority of the Europe-based steelmakers played a major role in the price recovery. The bullish market mood, however, was fragile due to generally bearish view of the buyers on the real demand and concerns about flat furnaces restarting in Germany this year and in the first quarter of 2024.
“We will focus on back to back business, it makes no sense to build stocks with more expensive coil when real consumption is struggling,” a Germany-based service center source said.
Although distributors recognized that mills need to achieve higher prices to cover rising production costs, they also did not want to risk building stocks with more expensive coil. Some market participants believed that the steelmakers would rather close more capacities than they would allow price fall.
“With current prices every mill is losing money, so price rise is inevitable,” a mill source said. “Although there are doubts among the buyers if the price rise would be sustainable, the mills have no other choice.”
In addition, mills have been targeting settled contracts for the first half of 2024, with end-users at unchanged prices compared with 2023, despite the decrease of spot prices in the second half of this year. The steelmakers have been aiming for prices around Eur750/mt ex-works Ruhr for HRC and for about Eur850/mt ex-works Ruhr for hot-dipped galvanized coil. Buyers from the automotive industry have been expecting contracts to be settled about Eur100/mt below those prices.
“Carmakers have postponed some volumes they originally requested for the fourth quarter into the first quarter [of 2024] because they expected prices to go down,” a second service center source said. “Which gave mills a good argument to increase prices as now they have good order books for the beginning of next year.”
Author Maria Tanatar, maria.tanatar@
Platts is part of S&P Global Commodity Insights.
European steel HRC prices trend higher; mills to seek substantial rises for Q1
Fastmarkets calculated its daily steel hot-rolled coil index, domestic, exw Northern Europe, at €645.13 ($689.91) per tonne on November 8, up by €5.13 per tonne from €640.00 per tonne on November 7.
The index was up by €22.63 per tonne week on week and by €28.13 per tonne month on month.
Transactions in Germany were reported at €640-650 per tonne ex-works, while in the Benelux region deals were heard at €660 per tonne ex-works, but only for limited volumes.
“Some restocking is necessary, but the market is too uncertain to order big volumes,” a steel service center source in Northern Europe said.
Lead times from integrated mills in the region remained at 4-6 weeks, while offers were reported at €680-700 per tonne ex-works.
Market sources said that, for first-quarter rolling, producers would like to consolidate prices “starting with a 7” – meaning, €700 per tonne or more.
Currently, reduced supplies due to output cuts, restocking and the uptrend in imports were the major factors driving up prices, industry sources told Fastmarkets.
“I think it’s realistic to forecast higher prices in the first quarter [of 2024] because imports are getting more expensive and the ‘other countries’ quotas for fourth-quarter HRC are full,” a market participant told Fastmarkets, referring to the EU’s quarterly limits on steel-product imports.
“Distributors will have to restock to avoid overly long lead times resulting from all the temporary shutdowns of capacity,” a steel service center source said. “The mills are not prepared to negotiate spot offers because they want to secure their positions for the negotiations with the automotive sector.”
European steelmakers were said to be hoping to roll over their automotive contracts for the first half of 2024, while original equipment manufacturers in the industry were seeking a price reduction.
In Southern Europe, Fastmarkets calculated its daily steel hot-rolled coil index, domestic, exw Italy, at €621.46 per tonne on November 8, up by €0.21 per tonne from €621.25 per tonne on November 7.
The Italian index was also up by €17.71 per tonne week on week and up by €15.49 per tonne month on month.
In Italy, one integrated steelmaker was reported to be out of the market, but other sources said that the price idea from the mill for first-quarter rolling would be no lower than €680 per tonne delivered (€665 per tonne ex-works).
But the market sources said that a more realistic price for HRC in the first quarter of 2024 would be around €650-660 per tonne delivered (about €635-645 per tonne ex-works).
The most recent transactions for December-rolling HRC in Europe were heard at €635-640 per tonne delivered (€620-625 per tonne ex-works).
Import offers, meanwhile, were trending higher, with most Asian suppliers offering January-shipment HRC to Europe, which would mean February-March arrival.
“With the current lead times, import tonnages booked now could be customs-cleared only by April 1, for the [EU’s] second-quarter safeguard period,” a trading source in Italy said.
Asia-origin HRC was on offer to Europe at €610-620 per tonne CFR, although several market sources said that, for volumes of 30,000 tonnes or more, Vietnamese mills were accepting €590 per tonne CFR to Italy.
Indian mills were quite bullish, with offers reported at €640-650 per tonne cfr to Europe.
“The Indian steel market is booming, so they are not interested in exports to Europe, really,” a second trader said.
Only Turkish mills were still able to offer material for December shipment, but their offer price of €640-650 per tonne CFR to Italy, duty included, was not considered workable by EU buyers.
Published by: Julia Bolotova
CBAM could drive China to cleaner green steel but DRI cost struggles ahead likely
The transformation will speed up after the European Union’s Carbon Border Adjustment Mechanism (CBAM) regulation was implemented in October this year with a two-year transitional period ending January 1, 2026, industry sources told Fastmarkets.
The EU’s CBAM is a tool aimed at putting a fair price on the carbon emitted during the production of carbon-intensive goods that are entering the EU.
Steel products are key carbon-intensive goods and raw materials for automotive and manufactory sectors. As the largest steel producer in the world with 1 billion tonnes of crude steel output in 2022, China exported steel products directly to some countries in EU, as well as to other countries to be further processed into industrial goods to be shipped to EU countries. This has made it important for Chinese steelmakers shift to low-carbon steelmaking route, Fastmarkets understands.
In the first 10 months of 2023, China exported about 74.73 million tonnes, up by 34.8% year on year from 55.44 million tonnes, according to China customs data.
An increasing number of market participants are exploring non-blast furnace (BF) steelmaking processes to achieve ultra-low carbon emissions in steel production, including using electricity arc furnaces (EAF) with ferrous scrap feedstock, production of direct reduced iron (DRI) via gas-based shaft furnaces, as well as iron reduction via technologies such as Corex, HIsmelt or Finex.
But major market sources in the steel industry see both challenges and opportunities for the transformation in the short- and long-term, Fastmarkets learned at China’s Non-Blast Furnace Ironmaking Forum on October 27-29.
Challenges for new DRI projects in China
Coke oven gas or natural gas-based DRI plants were developed in response to China’s decarbonization goals. But the high cost of building such projects and restrictions on new ironmaking capacities have limited such projects to only a few large state-owned and private Chinese steelmakers.
“To produce one tonne of DRI, there is a requirement of about 700 cubic meters coke oven gas with high quality and low impurity, as well as high-quality iron ore pellets,” Wang Tianyi from the China Metals Association said.
Wang added that the key disadvantage of DRI production powered by natural gas or hydrogen in China was poor cost efficiencies compared with other ironmaking routes, due to the low energy resources available, and steelmakers seeing thin margins in recent years.
Meanwhile, some sources in China said more specific and supportive policies for new non-BF steelmaking projects are expected in the future.
An industry source added that China issued a plan to push high-quality steel development in August this year, which includes measures to delay the shutdown of old ironmaking capacity if the newly-built facilities are catered for low-carbon ironmaking.
While developing hydrogen-based DRI capacity is supported by the Chinese government, the current policy of no new ironmaking and steelmaking capacity makes it difficult to carry out specific DRI ironmaking projects if there are no new capacity allowances for independent plants, Fastmarkets understands.
“To apply to build a non-BF ironmaking project, including a direct-reduced iron plant, [the company] needs to move away from old ironmaking capacity. Only green-hydrogen ironmaking projects might be approved on a case-by-case basis, but the cost and technology needed for the latter is much higher,” an industry source said.
“Steelmakers have already taken risks to apply new ironmaking technologies, but the lack of old ironmaking capacity, or the high cost to buy capacity quotas from other steelmakers have restricted new DRI projects,” a Tianjin-based industry source said.
Some market participants added that there were also some current restrictions of building new DRI capacity via coal-based shaft furnaces route from local governments, such as carbon emissions and energy consumption quotas.
Another key challenge for developing non-BF steelmaking projects is the high ratio of BF-based steelmaking in China with major BFs built within the past 15 years and mature ironmaking technologies, which leaves steelmakers unwilling to replace them with high cost and new non-BFs steelmaking facilities, such as DRI and EAF-based routes.
“[However,] adding high quality DRI in EAFs could help reduce the total cost as well as increase the hot metal quality,” China Metals Association’s Wang said.
“Steel mills with BFs under the decarbonization drive have shown increased interest in non-BF low-carbon steelmaking technologies, but most adopted a wait-and-see attitude due to a lack of pivot sample and clear production data [of DRI products],” another Tianjin-based mill analyst said.
Opportunities with DRI technology and raw materials sources
An industry source told Fastmarkets that the Chinese steel industry has obtained the capability to operate DRI plants powered by non-natural gas and high-quality iron ore produced from domestic miners.
Gas-based shaft furnace is the major route to produce DRI, accounting for more than 75% in global output with relatively mature technologies, sources told Fastmarkets.
The gas-based shaft furnace could produce relatively high output of DRI products with low emission and energy consumption compared with other facilities and has become the market focus with a major state-owned steel mill conducting pivot production as a sample for other steelmakers.
In China, eight companies with about 5.5 million tonnes per year of DRI capacity powered by coke oven gas were under construction or pivot production over 2021-2024, according to the survey by a DRI working group of the China Association of Metalscrap Utilization.
For raw materials to produce DRI, Chinese steelmakers and mining associations have been working closely to increase the supply of high-grade iron ore for DRI production using China’s domestic low-grade iron ore fines to produce high quality iron ore concentrate for pelletizing.
“There has been regular production of 71.5% Fe iron ore concentrate from Liaoning, Anhui and Shanxi province in China, with additional beneficiation [costing] less than 100 yuan per tonne compared to produce normal concentrates,” the same mill analyst from Tianjin said.
Published by: Alice Li
Voestalpine keeps mixed contract durations, reduces earnings
In the upcoming negotiations for long-term supply contracts to OEMs and other large customers, voestalpine will retain a mix of annual, half-year and quarterly terms, says chief executive Herbert Eibensteiner.
One year ago, many mills were heard trying to keep contract periods shorter, preferring half-year over full-year contracts, presumably in expectation of a spot price surge, which in fact started in December. At voestalpine, “we have not significantly changed the structure of contract durations,” Eibensteiner said during the group’s September-quarter earnings press conference when asked by Kallanish. He indicated that temporary market developments will influence negotiations, but did not go into details.
In the first half of voestalpine’s fiscal year – 1 April to 30 September – results were considered solid despite a decline in demand from the construction, mechanical engineering, and consumer goods segments.
After the group achieved record levels of revenue and earnings in the first half of the previous business year, 2022/23, the current reporting period was invariably weaker, executives noted. Revenue decreased by 8.4% on-year to €8.5 billion ($9 billion) in the first half of 2023/24; Ebitda fell by 36.7% to €915 million.
The Metal Engineering Division was able to increase both revenue and Ebitda, supported by strong performance in the Railway Systems business unit and the Tubulars (seamless tubes) product segment. The other three divisions reported weaker development for the reporting period.
In the construction, mechanical engineering, and consumer goods industries, voestalpine expects stagnating demand at a subdued level. However, the automotive industry should remain largely robust in the second half of 2023/24, it says.
Christian Koehl Germany
HBIS Serbia eyes hydrogen: Serbian PM
HBIS Group Serbia Iron & Steel plans to use hydrogen as an energy source at its Smederevo works, Serbian Prime Minister Ana Brnabic said in Beijing after a meeting with Chinese President Xi Jinping earlier this week.
Economic relations are good between Serbia and China, Brnabic said, adding she expects a new era in relations and the improvement of mutual trade after the signing of a free trade agreement. Xi Jinping said he would aim to visit Serbia next year, she noted.
At the same time, Brnabic emphasised that the future of the Smederevo steelworks is completely safe and that the HBIS Group, as the owner of the company, has clear plans for additional investments.
“The next focus of the second round of investments is energy efficiency and the green transition, and they [HBIS] also plan to make part of the ironworks run on hydrogen, in order to implement the idea that there will be no emissions of harmful gases in the next few decades,” said Brnabic.
HBIS Serbia did not reply to Kallanish request for comment before deadline.
In March, the plant resumed operations at its idled blast furnace (see Kallanish passim), returning to a two BF operation after idling BF1 the previous summer due to low demand.
The plant in Smederevo can produce about 2.2 million tonnes/year of steel across its two furnaces, while No.1 alone has a capacity of about 900,000 t/y. Product range comprises hot and cold rolled coil, pickled coil and electrolytic tinplate.
HBIS Serbia’s production in January-September 2022 amounted to 901,000 tonnes, the latest available figures. The company’s exports to the EU market during the first seven months of 2022, meanwhile, were 397,000t, up by 3.9% on-year.
Serbia’s production of crude steel totalled 1.12 million tonnes in January-September 2023, down by 34.7% on-year, according to the latest worldsteel data. In full-year 2022, the country’s output was 1.67 million tonnes, up by 0.3% on-year.
Svetoslav Abrossimov Bulgaria
Metinvest targets Piombino for future mill: sources
Metinvest is rumoured to be targeting Piombino in Tuscany as the location of its future Italian coil plant. Informed sources say the steelmaker is in talks with government officials to take over the troubled long steelmaking mill owned by India’s JSW.
According to rumours unsubstantiated by the company, Metinvest representatives visited the mill in Piombino and had a meeting with authorities at the Ministry of Enterprises and Made in Italy in Rome regarding a possible takeover.
In July, Italian equipment maker Danieli said it will create a joint venture with the Ukrainian producer to build a new steelmaking plant in Italy to produce low-emission coils (see Kallanish passim).
Danieli president Gianpietro Benedetti said in a joint note that feasibility studies were underway to select the right location for the future mill that will see an investment of €2 billion ($2.1 billion), financed by a pool of public and private European financial institutions.
Last year, Metinvest management visited the area around Porto Nogaro, northern Italy, for a series of meetings with regional authorities and Benedetti. Metinvest refused to comment at the time, as the final investment decision was yet to be reached. Several city councils around Porto Nogaro however voted against the construction of the plant.
Last year, JSW Steel chairman Sajjan Jindal said in an interview with the Financial Times his firm planned to sell its Italian division, which is not performing to expectations. Sources said JSW would keep and revamp the rail mill in Piombino, while selling the remaining assets.
JSW Steel acquired Piombino in 2018 from Algerian group Cevital. It was previously known as Aferpi and, before that, Lucchini. Together with the acquisition of Piombino Logistics and 69.27% of GSI Lucchini, the deal cost €55 million, on a cash-free, debt-free basis.
In its heyday, the Piombino site produced 2 million tonnes/year of steel.
Metinvest did not reply to request for comment before press deadline.
Natalia Capra France
French rebar prices hike
French rebar deal values are stable on-week but have increased on-month by about €30/tonne ($32). This follows the price hike move by some European producers in October.
The contracts implemented continue to be only for small volumes as consumption from the construction sector remains slow. Stocks at both producers, distributors and end-users remain relatively low. This is however not pushing buyers to commit to high-volume purchases.
Like last month, there is no visibility and sales are being made on a day-to-day basis. Despite the slow activity, however, distributors who spoke to Kallanish say they had a rather acceptable month in October and do not report any presence of lower-priced Spanish or Italian material. Producers in these countries are also pushing up their prices.
Sources do not forecast any significant consumption changes in the first quarter next year and see the market continuing on its current trajectory.
French rebar prices are hovering at €600-610/t delivered on average, sources suggest.
Natalia Capra France