Megasa to improve energy self-sufficiency in Portugal

Portuguese long steel producer SN Maia, part of Grupo Megasa, will significantly increase the use of renewable energy in its production, Kallanish notes.

The steelmaker says it is transforming its energy matrix with the installation of more than 8,000 photovoltaic solar panels at the production site near Porto. The execution of the project has been awarded to the company Greenvolt Next Portugal.

The modules will have the capacity to produce a 5.06 megawatt peak, with an average annual production of 8,127 MWh.

“With this investment we show our commitment to the energy transition, betting on the use of renewable energy,” says Megasa’s executive director for Portugal, Álvaro Álvarez. “We plan to expand the use of renewable energy and reduce our dependence on the national electricity grid. The authorization process for the installation of solar panels in our SN Seixal unit is in a very advanced phase and is already being evaluated by local authorities.”

The Maia and Seixal operations produce wire rod, rebar and welded mesh.

Todor Kirkov Bulgaria

Eurofer trims outlook for 2024 steel consumption

Eurofer, the European steelmakers association, again has lowered its outlook for apparent steel demand, Kallanish learns. In its latest release the association notes that apparent demand in 2023 stood at the level registered in 2020 and that the 2024 recovery will be slower than anticipated.

According to Eurofer, approximately 129 million tonnes of steel represented the apparent steel demand of Europe last year. This levels is the same as 2020, when Europe suffered the impact of the first wave of the Covid-19 pandemic. As a consequence, demand fell by more than 6% y-o-y in 2023, the fourth annual decline recorded during the last five years.

In 2024 apparent steel demand is set to recover by about 5.6%, not enough to return to the volumes achieved in 2022.

The slower-than-expected recovery of apparent consumption is caused by the persistent weakness of real steel demand expected for 2024. This year, real demand should drop 0.4% below 2023, folowing the last year’s y-o-y decline of 3.1%.

“In 2024, conditional on more favourable developments in the industrial outlook and improvement in steel demand, apparent steel consumption is set to recover (+5.6%) albeit at a slower pace than previously forecasted (+7.6%). The overall evolution of steel demand remains subject to very high uncertainty,” Eurofer explains.

Within a framework of weak steel demand, in 2023 the market share of imports out of the total consumption in Europe remained high. Eurofer calculated that in Q3 2023, the share was still 27%, including finished and semi-finished products.

Emanuele Norsa Italy

CBAM hits small German companies hard: Stahlmarkt

The Carbon Border Adjustment Mechanism (CBAM) of the European Union gives industries a hard time, especially for small and medium enterprises (SMEs), and in Germany probably more than elsewhere, according to one industry consultant.

In August, the European Commission published the details to be considered in the implementation of CBAM regulation in practice. The document of 102 pages “was full with legal and technical terms which most companies will have never heard of,” writes industry observer Andreas Schneider of Stahlmarkt Consult. In his latest blog titled “The Introduction of CBAM: A Disastrous Start,” Schneider points out that the new duties are a burden especially for smaller enterprises with limited staff for legal matters.

Schneider often advocates the interests of the steel and metals working industry, which accounts for 4,000 mostly small and medium-sized companies in Germany. Among other factors, he criticises a last-minute extension of the rules to include certain products such as screws, which are imported in large volumes by small traders.

He points at one particular flaw that occurred in Germany, when the government appointed its authority for CBAM matters only two days before Christmas. That is in contrast with many other countries, where the new authorities were announced early in the fourth quarter, Kallanish reads in Schneider’s blog. With 31 January as the deadline for the first report to be filed by the companies, “they had hardly one month to get acquainted with the process, and to meet the deadline,” he writes.

That authority, the “National CBAM Service Desk” defies its name because it does not provide personnel for inquiries, Schneider notes. “We apologise as we cannot answer individual questions. You will find all relevant information on our website,” the website says.

Christian Koehl Germany

Scrap not gold, trade regulations ineffective, say panelists

Scrap may in fact not be the new gold, while regulations will not prevent scrap from being traded, concluded panellists at Kallanish Steel Scrap 2024 in Istanbul on Thursday.

“Will scrap be the new gold?” asked Turkish Flat Steel Import, Export and Industry Association (Yisad) chairman Tayfun Iseri. “I’m not sure.” Technological innovation will see alternatives developed to scrap in future, he predicted.

Decarbonisation and CBAM, meanwhile, are just new means of “protecting their own”, he said in reference to EU authorities. In the past, the EU has levied anti-dumping or countervailing duties, but “this will be thrown out of the window” after the huge subsidies being given to EU steelmakers to decarbonise, Iseri added.

“I think protectionism is self-defeating,” observed Marcel Genet, founder and president of consultancy Laplace Conseil. “What we forget is that if we don’t do something with steel, the product has no value.”

He emphasised scrap trade restrictions are unlikely. “It’s pure nonsense for countries to limit trade when it is more efficient to do it in one place than the other,” he noted. “Turkey is not trying to steal scrap from the EU or US. They are very nice to create an outlet for countries that do not have capacity to consume their own scrap.”

Moreover, monthly price negotiations between scrap suppliers and steelmakers must be scrapped and all parties should work towards the goal of maximising steel recycling, he added.

“Regulation will not move needle, the scrap industry itself will. More scrap will be kept in Europe, knowing that demand for it is increasing. So yes, there will be less available for Turkey but it is not regulation that will cause it,” said McKinsey senior expert Steven Vercammen.

Turkey’s dependence on scrap imports is a big problem, meanwhile. The country must “reengineer its capacities and type of steel it is producing,” noted Muammer Bilgic, managing director of Bilecik Demir Celik. CBAM and environmental regulations will hit Turkish steelmakers, with its integrated mills likely to soon lose competitiveness.

Scrap shortages are unlikely to be a problem in the next ten years, Iseri observed. China could enter the scrap export market, while consumption of steel will decline in the coming decades. Car owners are holding onto their vehicles for longer, and car ownership in general is decreasing. “That’s why I’m saying scrap may not be the new gold,” he concluded.

Adam Smith Poland