SSAB to decarbonise all steel deliveries to Scania
Truck maker Scania and SSAB have signed a letter of intent to decarbonise all steel deliveries from SSAB to Scania’s heavy-duty vehicles by 2030, Kallanish hears from the companies.
Deliveries of SSAB’s proprietary “fossil-free steel” is targeted to ramp up rapidly from smaller amounts starting in 2026 and will be key in the shift towards a sustainable transport system, the steelmaker says.
SSAB is Scania’s main supplier of steel for its vehicles. The new deal, a next step in the long-standing relationship, caters for radically lowered climate emissions, the partners claim. SSAB notes that the ambition for 100% decarbonised deliveries is among the boldest of intentions agreed between SSAB and any customer. It moreover marks an ambitious plan within the First Movers Coalition, where Scania and SSAB are members to reduce the carbon footprint in hard-to-abate sectors.
Scania has outlined an industry-leading strategy to significantly reduce the carbon emissions by 2030 within four “hotspots”, constituting approximately 80% of supply chain emissions: batteries, steel, aluminium and cast iron.
The supply chain decarbonisation strategy and targets initially encompass Scania’s production in Europe but will gradually be extended to its production in China and Latin America, Scania says.
Christian Koehl Germany
Market contraction weakens Italian stainless service centres: Assofermet
Economic uncertainty and slow orders are hitting Italian stainless steel service centres’ margins and volumes. Demand continues to be sluggish but processing costs are simultaneously increasing, local steel trade association Assofermet warned during a meeting this week.
The sector is experiencing the worst margin contraction in 2023, which has become worse over the past 90 days. “We continue to see, on the one hand, a reduction in demand and, on the other hand, requests for increases from steel mills. The picture in Italy is one of high – but normalising – inventory levels and rising operating costs, preventing full price recovery,” Assofermet stainless steel service centres division coordinator Alessandro Bettuzzi says in a note sent to Kallanish.
“From the perspective of steel mills, the first half of 2023 was generally positive, both in terms of production volumes and margins … As for steel users, they are currently operating in an even more precarious condition due to the hardships of planning and scheduling purchases. The great uncertainty in the current market, caused among other things by the inflationary effect, makes them extremely cautious about both stainless steel consumption and investment,” he adds.
The association has warned of the danger of green steel and decarbonisation creating two parallel markets, a high-end one made of products resulting from sustainability policies and a consumer market with more affordable prices. “There are no conditions to impose the green standard in a homogeneous and distributed way in all contexts,” observes founder of T-Commodity Gianclaudio Torlizzi.
The Italian stainless steel market for both longs and coils has seen a harsh slowdown this year. Steelmaker Acciai Speciali Terni, part of Arvedi, has implemented several production stoppages due to sales volume contraction (see separate story). Italian demand for stainless flat steel continues to be fragile downstream.
Despite some growth in coil sales in September and October, service centres and re-rollers have not managed to pass on price increases downstream. Stocks are medium-high. The market for service centres’ clients is slow and is not absorbing the price increases. Sheet values are at the same level as producers’ coil levels, meaning these prices are not sustainable (see Kallanish passim).
Natalia Capra France
Investment funds formalise Celsa takeover, reorganise management
A group of investment funds formalised the takeover last week of Spanish steelmaking group Celsa. The funds represent the main creditors of the company and were given the green light by a Spanish court earlier in September to take over the majority of the company.
Deutsche Bank, SVP, Cross Ocean, Anchorage, Golden Tree, Attestor, Goldman Sachs, Sculptor and Capital Group are among the banks and funds included in the new ownership group.
Following the formalisation of the takeover, the new owners have selected a new chief executive for the group: Jordi Cazorla Pujalte. The executive is expected to take on the new role from 2024 and will replace Francesc Rubiralta.
Rubiralta represented the family controlling Celsa since its foundation back in the 1960s. He stepped down from his role as Eurofer president earlier this month.
As anticipated by Kallanish, the new owners of Celsa have also agreed to find a local industrial partner to take over a 20% stake in the group. It is understood the deadline to find the industrial partner has been set for mid-2024.
Emanuele Norsa Italy
EU seeks US tariff-rate quota management improvement
The EU is pushing the US for a “noticeable improvement” in its management of tariff-rate quotas (TRQs), which the EU considers “rigid”, European Commission vice president Valdis Dombrovskis said on Monday of the progress made in Global Arrangement on Sustainable Steel and Aluminium (GASSA) negotiations.
The comments came following an EU Trade Council meeting, the outcome of which European steelmakers’ association Eurofer criticised for showing there is still a gulf between the EU and US positions.
The two sides failed to reach a deal on GASSA in time for the EU-US summit in Washington last month and subsequently extended the deadline for negotiations till year-end (see Kallanish passim).
The main stumbling block was the “unwillingness of the US side to provide a clear pathway towards definitely withdrawing the 232 tariff-rate quotas which the US is currently imposing on EU exports,” Dombrovskis commented during Monday’s press conference.
While negotiations continue, the sides “need to manage the situation” approaching on 1 January, which would see US Section 232 tariffs and EU retaliatory measures come back into force if no agreement is reached.
“We are in an asymmetric situation where we [EU] have completely suspended our measures but the US still continues to impose if not tariffs, then tariff-rate quotas; but also the management of TRQs is quite rigid and certainly can be improved,” Dombrovskis noted.
The main discussion now is on improving the TRQ management before the EU side decides on the next steps, he concluded.
Eurofer called the meeting a missed opportunity to settle the trade dispute before the COP28 summit in Abu Dhabi beginning on Thursday.
“Without a carbon-neutral industry at global scale, it will be impossible to achieve the 1.5 nor the 2 degrees Celsius objective in 2050. An ambitious international binding agreement tackling the existential challenges the steel industry is facing worldwide should not become the collateral damage of different views across the Atlantic on the approach to solve the US Section 232 issue while we share the same values,” says Eurofer director general Axel Eggert.
The absence of a GASSA deal “risks jeopardising the European steel industry’s decarbonisation efforts and shows the limits of EU global climate and trade diplomacy”, he adds.
“We urge the EU and the US to find a common path forward, positively conclude the negotiations, and avoid postponing solutions for global challenges,” Eggert concludes.
Adam Smith Poland