Thyssenkrupp preparing clean hydrogen tender for Duisburg steel works in Germany
Thyssenkrupp is preparing a tender to purchase up to 151,000 mt/year of renewable and low-carbon hydrogen under 10-year contracts, with lower volumes starting from 2028, for pipeline delivery to its Duisburg steelworks in Germany.
The steelmaker will seek an expected 104,000 mt of hydrogen in 2028, rising to 143,000 mt/year over 2029-35 before reaching 151,000 mt/year over 2036-37 as it seeks to decarbonize the plant.
The tendered volumes must meet the EU’s Renewable Energy Directive requirements for renewable hydrogen and low-carbon hydrogen under current provisions on CO2 emissions reductions, it said in a tender information document.
A first phase of the tender will open in February, with requests for information from interested companies, a Thyssenkrupp spokesperson told S&P Global Commodity Insights Jan. 23.
“With this tender, we want to kick-start the market for green hydrogen and create the necessary infrastructure to supply our Duisburg site with hydrogen,” the company said.
In a second phase, Thyssenkrupp will issue requests for proposals in the second quarter of 2024 before a request for quotations in the third quarter.
The hydrogen price will be determined during the tendering process, the company told S&P Global.
The Duisburg steel plant will be connected to Germany’s planned national hydrogen pipeline network at an early stage, Thyssenkrupp said on its website.
The planned pipeline between Dorsten and the Duisburg district of Hamborn will provide a secure connection to the hydrogen network, with links envisaged to Rotterdam by 2030, it added.
Germany has committed Eur20 billion to constructing its core 10,000-km pipeline, expected online by 2032, with 13 cross-border interconnection points.
Platts, part of S&P Global Commodity Insights, assessed the cost of producing hydrogen via alkaline electrolysis in Europe at Eur4.80/kg ($5.21/kg) Jan. 22 (Netherlands, including capex), based on month-ahead power prices. Proton exchange membrane electrolysis production was assessed at Eur5.74/kg, while blue hydrogen production by steam methane reforming (including carbon, CCS and capex) was assessed at Eur2.52/kg.
Author James Burgess, james.burgess@
EU HRC buyers avoid stockpiling due to uncertain short-term price trend
The buyers of domestic European hot-rolled coil avoided stockpiling due to uncertainties about short-term price trend on Jan. 23.
Steelmakers held to bullish offers due to healthy order books in Q1 but were yet to achieve their target as buyers remained reluctant to pay up.
“Buyers are just booking the volumes they absolutely need and avoid building stocks,” a German service center source said. “Such approach does not help the mills’ attempts to raise the prices.”
Real demand remained lackluster, which concerned several market participants about the sustainability of the current price trend especially with several blast furnaces back online which would add to supplies in the coming months.
Deals for domestic HRC in Northwest Europe were heard at Eur750-770/mt ex-works Ruhr. Mills continued to offer April-May delivery cargoes at Eur800/mt ex-works Ruhr.
Platts assessed the price of domestic HRC in Northwest Europe up Eur15/mt on the day at Eur760/mt ex-works Ruhr Jan. 23.
Tradable value was estimated at Eur740-750/mt ex-works and at Eur770/mt delivered Italy. Italian mills made offers at Eur760-780/mt delivered Italy.
Platts assessed the price of domestic HRC in South Europe up Eur10/mt on the day at Eur750/mt ex-works Italy Jan. 23.
Buyers in Italy were heard vetting import offers made by Indian and Turkish mills as they still had safeguard quotas left for Q1.
Indian and South Korean mills offered HRC at Eur670-680/mt CIF Italy. Mills from Turkey made offers at Eur690-700/mt CIF Italy.
Tradable values were estimated at Eur660-680/mt CIF Italy for imports from India and South Korea.
Platts assessed the price of imported HRC in South Europe stable on the day at Eur670/mt CIF Italy on Jan. 23.
Author Rituparna Nath, rituparna.nath@spglobal.
December steel sales, stocks fall on month and year
Steel product sales in the German distribution and stockholding system in December fell 56% month on month and 14% year on year to 465,000 mt, according to data from sales and stockholder association BDS.
Sales of flat products totaled 289,758, down 55% month on month and 18% year on year, while longs steel products sales totaled 143,297 mt, down 54% month on month and 6.2% year on year.
All other products sales totaled 31,946 mt in December, compared to 61,677 mt in November and 38,584 mt in December 2022.
Steel product stocks fall
Stocks of all steel products in the German stockholding and distribution segment in December 2023 totaled about 1.85 million mt, down 5.1% year on year and 2.9% month on month.
Flats stocks in December fell to 1.165 million mt, down 3.8% month on month but little changed year on year.
Long stocks in December were at 652,347 mt, down 13% year on year and down 1.2% month on month.
All other products stocks in December totaled 36,702 mt, down from 38,645 mt in November and 39,786 mt in December 2022.
Platts, part of S&P Global, assessed hot-rolled coil in Europe at the beginning of December at Eur680/mt ($739/mt) base ex-works Ruhr to Eur690/my base ex-works.
Author Annalisa Villa, annalisa.villa@
Germany’s crude steel output in 2023 at lowest since 2009, WV Stahl says
The country produced 2.631 million tonnes of crude steel in December 2023, down by 2.3% compared with December 2022. Over the whole year of 2023, crude steel output in Germany dropped by 3.9% year-on-year to 35.438 million tonnes.
“This is the lowest production volume since the financial market crisis in 2009,” WV Stahl said. “At that time, however, things quickly picked up again after a sharp decline caused by the recession.”
According to the industry association, energy-intensive production from electric-arc furnaces (EAFs) in the country was particularly affected by the high electricity prices and the weak construction sector. German EAF-based mills produced 533,000 tonnes of crude steel in December, up by only 0.4% from December 2022.
In December 2022, the country’s crude steel output was severely affected by numerous cuts as a response to low demand, so in December 2023 a slight rebound was negligible due to the low base for comparison.
Over 2023, however, total production from EAFs dropped to 9.806 million tonnes, a decrease of 10.8% compared with the previous year. “The volume even fell below the low point [that was seen] during the financial market crisis,” WV Stahl said. “At that time, electrical steel production was 11.3 million tonnes.”
WV Stahl added that there had been steady declines in production since March 2022. According to the association, such a long negative cycle has never been seen before in Germany’s steel industry.
Steel produced via EAFs is mainly used in the manufacture of long products. According to Fastmarkets’ sources, demand for long steel in Germany remained subdued due to a slow construction sector.
Fastmarkets’ weekly price assessment for steel reinforcing bar (rebar), domestic, delivered Northern Europe, averaged €642.50 ($699.84) per tonne in December, down from an average of €753.75 per tonne a year earlier.
Meanwhile, steel output from Germany’s basic oxygen furnaces (BOFs), which is mainly used in the production of flat steel, decreased by 2.9% year-on-year to 2.099 million tonnes in December.
Flat steel prices increased across Europe in December due to attempts by mills to cover their higher production costs. But demand remained low. Fastmarkets’ sources explained that a price rise this month was driven by the limited availability of material in the market.
Fastmarkets’ daily calculation of its steel hot-rolled coil index, domestic, exw Northern Europe, averaged €688.20 per tonne in December, outstripping the average of €642.73 per tonne a year earlier.
But market sources remained sceptical that steel production rates in Germany would rebound in 2024.
Kerstin Maria Rippel, general manager of WV Stahl, called for political action to mitigate the effects of the rising production costs in the steel industry.
“This is particularly acute when it comes to the still-uncompetitive electricity costs,” Rippel said. “Transmission network fees have doubled since the beginning of the year, [and] are higher than ever before.”
She added that a clear political idea was needed concerning how to sustainably fund the transformation of the industry toward climate-change neutrality.
Published by: Julia Bolotova, Darina Kahramanova
European HRC prices seen largely flat amid subdued trading
Quiet trading continued in the European HRC market. Producers were said to have good order books for the first quarter of the year and therefore were keeping their offers high.
Notably, April-delivery HRC was offered by integrated mills in Northern Europe at €760-800 ($828-871) per tonne ex-works, with one supplier looking for €800-820 per tonne ex-works.
Some producers were reported to still be able to offer March-delivery HRC, however.
“Mills paint a slightly brighter picture when it comes to order books,” a buyer source said.
Tradable values were estimated by buyers at €730-760 per tonne ex-works, with deals reported within that range in Germany and the Benelux area.
As a result, Fastmarkets calculated its daily steel hot-rolled coil index, domestic, exw Northern Europe, at €746.88 ($813.54) per tonne on Tuesday, up by only €0.63 per tonne from €746.25 per tonne on January 22.
The index was up by €16.25 per tonne week on week and by €51.38 per tonne month on month.
Some sources suggested that reduced supply due to output cuts will keep prices flat in the near term, compensating for the lack of real demand, while further rises were unlikely.
“The price is not really the question; demand is the main question, and the outlook for end-user sectors for 2024 is quite depressing,” a steel service center in Germany told Fastmarkets. “I don’t see how we can pass on higher prices in the secondary market.”
Fastmarkets calculated its daily steel hot-rolled coil index, domestic, exw Italy, at €736.25 per tonne on Tuesday, up by €0.70 per tonne from €735.55 per tonne on January 22.
The index was up by €14.58 per tonne week on week and by €47.92 per tonne month on month.
One integrated mill in the country was said to be offering €760 per tonne ex-works for March-delivery coil. Another supplier was said to be hoping to get €780 per tonne delivered (€765 per tonne ex-works).
But buyers estimates of tradable prices were no higher than €750-760 per tonne delivered (€735-745 per tonne ex-works).
Some market sources, however, suggested that target offer prices could be achieved in February spot trading, given the lack of suppliers active in the market.
On buyer said that most competitive Asia-origin HRC supplies were “tricky to book due to insurance problems.”
“My insurance company refused to secure insurance for cargoes coming through the Red Sea,” another buyer in Southern Europe said.
He added that some Asian mills have started to reduce their offer prices due to weak domestic demand, but that problems with insurance were putting a limit on buying interest.
Notably, HRC from Vietnam was heard offered to Italy at €630-640 per tonne CFR for April shipment.
Taiwan, South Korea and Japan were heard to be offering HRC to Europe at €650-670 per tonne CFR, for March-April shipment.
Indian mills were heard offering coil to Italy at €670-690 per tonne CFR.
And a booking of Egypt-origin coil was heard to Italy at $710 per tonne CFR late last week.
Published by: Julia Bolotova
Ukraine decreases flats, longs exports in 2023
Ukraine decreased flat steel exports in December compared with the previous month, according to national customs data.
Total volume delivered amounted to 182,490 tonnes, up by 40% on-month and four-fold on December 2022, Kallanish notes. In monetary terms, flat product exports increased by 25.7% on-month and over three-fold on-year to $95.84 million.
In full-year 2023, exports were 1.2 million tonnes, down by 26.4% on-year. The value of flats exports amounted to $782.3m, down 42.2%.
12-month uncoated hot rolled coil exports reached 941,910t for $582.6m. In December alone, the country shipped 158,000t, up by 45.2% on-month, at a value of $81m, more by 34.8%.
It shipped 200,200t of cold rolled coil in January-December, up 42% on-month, with income at $132m, up 28%. In December alone it shipped 19,120t, up by 30% on-month.
The largest consumers of Ukrainian HRC in January-December were Poland with a 41.7% share, Bulgaria with 18.6% and Portugal with 7.3%. Those three countries also together consumed about 60% of CRC. The main buyers of Ukrainian coated flats were Poland (74.6%) and Romania (20%).
December longs exports meanwhile increased by 15.3% on-month and 59.4% on-year to 51,140t. Revenue from exports was higher by 18.7% on-month and 51.4% on-year at $36.5m. In January-December, Ukraine exported 523,840t, down 31.4% on-year. Revenue amounted to $395m, down 45%.
12-month exports of hot-rolled bars and bars in coil were up 19.7% on-month to 209,970t for $131.4m. In December alone, 21,970t were shipped, an increase of 54.4% on-month. Revenue was $12.87m, up 56.3% on-month.
The largest consumers of Ukrainian hot-rolled bars in January-December were Romania with a 37.5% share and Poland with 32.2%. Poland and Germany combined consumed about 60% of Ukrainian wire. Among the main buyers of other bars and bars were Moldova (24.1%) and Iraq (22.8%).
In 2023, Ukrainian steelmakers produced 6.23mt of steel, down 0.6% on-year. Pig iron output was also less by 6.1% to 6.23mt, but rolled products increased by 0.4% to 5.37mt (see Kallanish passim).
Svetoslav Abrossimov Bulgaria
Hilco to sell Vallourec’s German production lines
Hilco Industrial Acquisitions will handle the sale of the tube production assets of Vallourec Deutschland, following the closure of Vallourec’s German sites.
Amsterdam-based Hilco Industrial Acquisitions is a subsidiary of US-based group Hilco Global. In 2022, it acquired the assets of thyssenkrupp’s heavy plate rolling mill in Duisburg and later sold them to a new owner in Asia (see Kallanish passim).
Hilco has now announced a strategic partnership for the sale and project management relating to the disposal and removal of all assets located at two production sites in Düsseldorf-Rath and Mülheim an der Ruhr.
The assets are primarily related to seamless pipe production, Hilco notes. The sale will be conducted in partnership with National Machinery Exchange, Inc. Hilco has listed these assets for sale on its website, hilcobid.com. Production at Vallourec’s two sites ceased at the end of 2023.
According to Hilco Industrial Acquisitions chief executive Robert Bouland, the sale presents an exceptional opportunity for buyers who are looking for modern, high-quality machinery for various industrial applications. These applications include mechanical pipes, structurals, cylinder pipes for industrial usage, boiler heads, nuclear for power generation, and OCTG for oil and gas purposes.
From the Rath mill, the scope of facilities includes a Danieli-built cross-rolling mill, and a pilger mill rebuilt by SMS in 2012. The equipment from Mülheim an der Ruhr includes a rotary hearth furnace, mandrel furnace units, and ultrasonic testing equipment.
Christian Koehl Germany
Swedish steel production decreases in 2023
Steel production at Swedish mills in 2023 was around 3% below that of 2022, Kallanish learns from national steel federation Jernkontoret.
According to data provided by the federation, crude steel output in Sweden in 2023 reached 4,258,000 tonnes, 3.3% down on 2022. “In light of the economic slowdown, it comes as no surprise that the year as a whole ends in the red,” Jernkontoret says in its note on the figures.
In December alone, production was down 6.3% year-on-year to 305,000t. Despite this larger deficit at year-end, Jernkontoret notes that the fourth quarter overall saw a slight increase in production. “This means that the decline in the second half of the year was not as clear as the decline we saw in the first half,” says Mathias Ternell, trade policy director at Jernkontoret.
Christian Koehl Germany
Polish housing construction rebound should accelerate: ING
The Polish housing construction rebound should accelerate in 2024, with new measures expected to stimulate an already solid rebound in the mortgage market, says ING Bank. The number of dwellings under construction has been gradually improving since the bottom in summer 2023.
In a reversal of the situation seen for most of last year, prospects for categories related to infrastructure investment, particularly for civil engineering construction, look less optimistic. Projects financed from the old EU budget have almost been completed. By contrast, investments co-financed from the National Recovery and Resilience Plan will start with a delay. Launching projects from the new EU budget is also set to take time, the bank points out.
In December, overall Polish construction activity rose 14% on-year, with civil engineering works rising 19%. ING attributes this to slightly warmer weather versus December 2022, and the finalisation of investments with EU funds before the end of the accounting period of the previous EU perspective. Also contributing were further residential construction improvements amid the government’s low-cost loan programme, and a low December 2022 base.
In full-year 2023, Polish construction output rose 5% on-year, driven by an 11% growth in civil engineering, while building construction dropped 1.3% and specialised works rose 3%, according to Statistics Poland (GUS) data.
Residential unit construction starts fell 6% last year to 189,093, while issued residential construction permits and applications received dropped 19% to 241,097 units.
CMC said earlier this month that supply-side adjustments and the impact of increasing levels of residential and infrastructure construction should drive sequential improvements in financial results beginning in the spring construction season (see Kallanish passim).
Adam Smith Poland
Curtailed wind generation could decarbonise UK steel: report
UK curtailed wind generation – wasted power due to transmission and distribution infrastructure not keeping pace with generation growth – could have produced over 118,000 tonnes of green hydrogen in 2022, rising to 455,000t by 2029. This would be enough to decarbonise the entirety of the UK’s 7 million tonnes/year steelmaking, points out UK think-tank Policy Exchange.
The growing instances of curtailment in the UK involve wind generators being instructed by the network operator to disconnect from the grid due to constraints on the power system – this is a costly problem, the organisation observes.
Since 2021, UK power system congestion has cost consumers over £2 billion ($2.5 billion), and in 2022 alone some £210 million of curtailment payments were made to renewable generators under contract. As the offshore wind fleet grows from 14GW today to the 50GW offshore wind target in 2030, the UK is on track for a fivefold increase in curtailment by 2030.
“By delivering regulatory reforms and introducing new commercial incentives, Westminster can leverage curtailed generation to accelerate development of a distributed electrolysis system,” Policy Exchange says in a report seen by Kallanish.
If the entire volume of curtailed wind generation was committed to hydrogen-fired DRI steel production, the UK’s 7m t/y of steelmaking could be decarbonised by 2026, the report states.
The 455,000t of annual green hydrogen production could also displace two-thirds of the 700,000 t/y of the UK’s current, carbon-intensive grey hydrogen consumption, and deliver two thirds of its electrolyser production capacity target for 2030.
To enable these opportunities, the government must first develop Constraint Management Plans (CMPs) and a tradeable credit market, creating roadmaps for market participants to enter into new arrangements to reduce their annual curtailment figures through partnerships with electrolysers, Policy Exchange says.
It should also reduce or waive system charges to improve the economics of driving investment into new constraint management assets. Other measures could be government backed off-take agreements for a period of 15 or more years, and a matchmaking initiative to pair hydrogen producers with prospective consumers, as is done in the US.
Adam Smith Poland