EUROMETAL brought together Nordic Distributors in Oslo

The EUROMETAL Meeting Nordics, held on June 3-4, 2024, brought together key players in the steel and metals industry for an insightful and educational event.

Organized by Stål- og Metallgrossistenes Forening in collaboration with EUROMETAL, the conference provided a platform for distributors and producers to discuss the latest trends and innovations shaping the future of steel and metals in the Nordic region.

The meeting covered a broad range of crucial topics, including:

• Outlook on Steel Prices and Trade Flows: Matthew Watkins from CRU opened the session with a detailed analysis of the current trends and future projections in international steel prices and trade dynamics.
• Metal Solutions for the Renewable Energy Market: Audun M. Martinsen from Rystad Energy highlighted the pivotal role of steel, particularly tubulars and flats, in the renewable energy sector, emphasizing their application in wind turbines and solar panels.
• Nordic Economic Trends: Nils Kristian Knudsen from Handelsbanken provided an overview of the economic performance of Nordic countries, offering insights into their growth prospects and market conditions.
• Towards Fossil-Free Steel: Matts Nilsson from SSAB discussed the HYBRIT project and Halvard Meisfjord from Celsa Armeringsstål on fossil-free reinforcement in Mo i Rana.
• Renewable Energy Solutions: Jan Fredrik Stadaas from Equinor fornybar explored the advancements in renewable energy technologies for both onshore and offshore markets.

The event also featured presentations by Geir Olafsen from Siglar Carbon on the cost and carbon reduction in shipping and Anders Jansson from CorPower Ocean on wave energy.

The event concluded with a panel discussion moderated by Gjermund Løyning from NHO, featuring industry leaders such as Matts Nilsson (SSAB/HYBRIT), Sarah Milne (H2 Green Steel), Halvard Meisfjord (Celsa Armeringsstål), Jaap Jan Aardenburg (Tata Steel Europe), and Fernando Pessanha (Hydnum Steel).

This event was attended by 75 steel experts.

Here you can consult some press articles emerging from this event:

Bureaucracy drives German fabricators away

Production at Germany’s steel fabricators last year dropped by 3.3% compared with 2022, Kallanish hears from their association, WSM. Order intake fell by 2.7%.

The decline in production accelerated throughout the year, with the fourth quarter down 5.9% on-year and down 5.4% on-quarter. However, WSM also points to some alleviation seen in December, which saw output drop only 2.5% on December 2022. It says that some primary processors, such as re-rollers, managed to catch up somewhat, and, notably, the defence industry was a good performer.

With some cautious optimism, the association therefore believes the bottom was reached at the end of the year.

Still, industrial activity in German has far from resurfaced this year so far, and WSM finds that many of the causes are home-made. In contrast to the production drop in Germany, France showed a slight increase, and Turkish output rose by as much as 10%, it notes.

The association recently commissioned a poll among its members, in which 44% of companies reported declining business activity in 2024 so far. WSM says that other countries offer better conditions in many respects, making German companies inclined to invest abroad. In terms of power prices, for example, costs in Germany are one third above those in France, and double those of the USA.

Another recurring issue is the “bureaucratic monster” of paperwork, inconvenient procedures from authorities, slow approvals for construction, and unrealistic regulations, WSM notes. This is a complaint heard increasingly from German industries (see Kallanish passim).

Christian Koehl Germany

Low availability props up Italian scrap prices: Assofermet

Italian scrap prices should decline by no further than €10/tonne ($10.8) on average this month, as local merchants are unwilling to accept any further drops given the low scrap availability afflicting the market.

“Sentiment in these first days of June remains bearish due to poor sales of finished products. However, the continued low availability of scrap will help prevent major declines,” Italian steel trade association Assofermet says in its market note sent to Kallanish.

Several vessels of scrap imported by pools of mills are expected to reach Italy this month. A source says about eight ships of 40,000-tonne each are due to dock at Italian ports. The countries of origin are Venezuela, the UK and the US.

The first half of May saw price increases, while the second half registered price declines, the association notes. In the first half, prices rose €20-25/t, depending on category, mostly due to low availability. Industrial demolition was the grade that increased by the most, reducing the gap with E8 new arisings, which now stands at around €20/t. Demand remains strong for high scrap grades, the note continues.

Meanwhile, pig iron prices remain stable on-month, with some upward traction. At an international level, prices have remained mostly stable over the past month. “There is currently no official information regarding the cancellation of the [pig iron] export duty from Russia … although many executives are convinced that such a possibility is extremely real,” Assofermet concludes.

Sources confirm that Russian pig iron producers allowed to sell in Europe are currently not quoting.

Natalia Capra France

EU coil market prepares for contract talks

The mid-year negotiations for long-term supply contracts between northwestern European coil mills and big consumers will start soon, and in some cases already have.

“There will be a long line of meetings next week for the initial talks for contracts for the second half of the year,” a buyer at a cold-roller tells Kallanish.

Other sources previously indicated that buyers would prefer to push back the talks as long as possible, assuming the sustained lull in demand will see steel prices soften further. “But they may be proven wrong after last week’s extension of safeguard measures by the EU,” which may strengthen the position of mills and possibly encourage higher price offers, one observer says.

A Dutch manager concurs that “it will be of strategic importance to mills that steel prices remain at least stable, preferably with a slight upward trend.” According to the cold-roller’s buyer, the first signals from mills have varied for a premium of between €20 and €50 ($22-54) over deals in the previous half-year. This is hard to translate to a market price per tonne figure, given the many variables that go with it.

Apart from the obvious range of prices achieved in different mill-consumer deals, time is a big factor. Just before the previous talks began, towards the end of 2023, coil prices had just taken a run-up towards a surge that would last well into January. The low point of the spot market for hot rolled coil back then was at around where it is now, at €620/tonne, before rising to €750/t in mid-January.

Annual or half-year contracts normally see €100 added on top of the spot price, so in most cases would have risen above €800/t during the last round, the longer talks dragged on.

That surge momentum is nowhere to be seen now, and even if mills can lift spot prices in June, the increase will hardly be as massive as in December. They may therefore be lucky if they can repeat the prices of the last round. According to the buyer, “the offers from mills reflect their need to cover costs, but not the demand on the market.”

Christian Koehl Germany

European HRC buyers await higher offers; slow demand remains key issue

Prices for domestic hot-rolled coil were broadly stable on Thursday June 6; sources expected mills to seek higher prices following safeguards review, however weak end-user demand remained a concern, Fastmarkets heard.

Buyers in Europe continued to refrain from restocking, opting for hand-to-mouth bookings while assessing the market situation.

“Safeguards news indeed flustered the market. But it’s too early to draw a conclusion. The problem, however, is in low production of new cars [in Europe]. If that continues, end-user demand will remain weak,” a buyer source in Northern Europe said.

“Demand [from end-users] remains on the low side, so getting higher [HRC] prices just based on expected safeguards effects would be difficult,” a second buyer said.

Meanwhile, suppliers in Northern Europe were either keeping quiet, or opting for minor upward price adjustments, testing the market.

An integrated mill from the Benelux area was offering July delivery HRC at €650 ($707) per tonne ex-works, versus €640 per tonne ex-works in the previous week.

In Germany, integrated mills were heard offering July-delivery coil at €640-650 per tonne delivered, which nets back to about €630-640 per tonne ex-works.

An offer was heard for July-August delivery HRC from a Benelux-based re-roller at €620 per tonne ex-works. Lower offer levels, previously reported by buyer sources at €600 per tonne ex-works, were not widely confirmed.

Fastmarkets calculated its daily steel hot-rolled coil index domestic, exw Northern Europe at €633.75 per tonne on Thursday, up marginally by €1 per tonne day on day from €632.75 per tonne.

The index was stable week on week, but down by €7.50 per tonne month on month.

Fastmarkets’ corresponding daily steel hot-rolled coil index domestic, exw Italy was calculated at €630.52 per tonne on Thursday, down negligibly €0.11 per tonne from €630.63 per tonne the previous day.

The index was up by €0.52 per tonne week on week but down by €3.23 per tonne month on month.

The Italian HRC market was also broadly stable.

“Spot demand is soft; buyers are only filling gaps in stocks, no major activity. But mills seem to be defending current price levels and are not willing to step much lower. Limited import options can be supportive for [European steelmakers] in a longer run,” a buyer in Italy said.

Tradeable prices were heard at around €640-650 per tonne delivered from buyers and sellers, which nets back to €630-640 per tonne ex-works.

Transactions for small tonnages of HRC in Italy were heard at €630 per tonne ex-works.

Lead times from local and European mills were around four to five weeks.

In the secondary market, 3-6 mm HR sheet was still traded within the range of €700-730 per tonne CPT, with most trades around €720-730 per tonne CPT, Fastmarkets understands.

Steel service centers’ attempts to increase prices for HR sheets during May were largely unsuccessful due to slow end-user demand, sources said.

No new import offers were heard from Asia after the safeguards review announcement.

“Nobody is willing to buy import [HRC] because of the long lead times. Some buyers opt for imports only to mitigate the risk that EU-mils do not deliver/take production out of the market,” a buyer in Europe said.

So far, Turkey was the major “safe origin” for European buyers. In the past week offers for Turkish HRC with end-July shipment were reported at €600-610 per tonne CFR, including the anti-dumping duty.

Published by: Julia Bolotova

fastmarkets.com

Nordic steelmakers gear up for low-carbon projects, seek clarity on green steel definition

Nordic steelmakers are gearing up with their low-carbon projects to achieve net zero while demand for green steel is increasing as end-users want to cut their emissions, market participants said at a EUROMETAL Nordics event held in Oslo on June 4. Participants also sought clarity over the definition of green steel.

“Demand for low-carbon steel is going to increase higher in the years ahead,” Matts Nilsson, Head of Sales Sweden and Norway for SSAB, said during the panel discussion echoing the sentiment of other panelists.

Sarah Milne, H2Green Steel sales manager, said: “I think this is the most exciting time to be in our industry as we are going through an epochal change.”

“Last year, we put out as a world, 37 billion mt of CO2 in the atmosphere, of which 8% of that was because of the products that we produce. We can’t carry on the way as we are making steel today. We have to change,” Milne said.

Europe aims to cut carbon emissions by 55% compared with 1990 levels by 2030 and aims to achieve climate neutrality by 2050. To achieve these targets, European steelmakers are switching technologies; there are around 60 projects that have the potential to reduce CO2 emissions by 81.5 million mt/year by 2030, of which the most innovative projects are based in the Nordics, given the large quantity of hydrogen.

According to worldsteel data from 2022, on average, every metric ton of steel produced leads to 1.91 mt of CO2 in emission. The carbon intensity changes depending on the route and raw materials used to produce steel.

 

In Europe, just over 40% of EU steel is produced via the electric arc furnace production process with blast furnace producers that are now mostly changing to the EAF-DRI process. As underlined by panelists at the event, it is not possible to produce steel just with scrap as all the scrap in the world can cover only 30% of the total world capacity, so new breakthrough technologies are needed, similar to the one that H2 Green Steel and Hybrit are using in the Nordics.

Milne said they have sold already half of their future volume production in pre-taken binding agreement and have managed to raise a total of Eur6.5 billion, which is the biggest project funding raised during 2023. “We see more and more demand for low-carbon products; we expected [in] the automotive sector, but now we can see all other sectors are following,” Milne added.

Milne said H2 Green Steel is on track to start its low-carbon production by 2026. The Boden plant will have a 1-GW electrolyze to produce hydrogen for direct-reduced iron produced from renewable electricity — rather than coal — emitting as much as 95% less CO2 in comparison with the steel produced via traditional BF technology in two phases, for a total capacity of 5 million mt of steel.

Steelmaker SSAB said their works to cut emissions were moving forward. “At the beginning of April, SSAB took the decision to invest Eur4.5 billion in a steel mini-mill in Lulea that will cut Sweden’s CO2 emissions by 7%, in addition to the 3% reduction from the conversion of the mill in Oxelosund, which is also progressing well,” Nilsson said, adding that the company will have to take the decision to convert also its BF in Raahe.

SSAB has already a low-carbon steel product — SSAB zero — which comes with a premium, and it will be replaced by fossil free steel by 2030, using scrap and fossil free iron as raw materials once the transformation of all of its sites is completed.

Panelists agreed that even as steelmakers are working to produce a green product, there is a need for the definition of “green steel,” which is key to working with transparency.

“We need an industry definition of what is green, we are all talking about the same thing but slightly differently. How we measure the CO2 is very important, we will see different shades of green,” Milne said, adding that it will probably be more expensive to reduce carbon content 90%-95%.

Platts, part of S&P Global Commodity Insights, launched its carbon-accounted price assessments in May 2023 following the increase in market demand for low-carbon steel products and transparency.

Platts last assessed Northwest European hot-rolled carbon-accounted coil stable on the day at Eur755/mt ($820.4585/mt) ex-works Ruhr June 5.

The assessment was calculated in line with the sum of Platts daily carbon-accounted steel premium (CASP) assessment and Platts daily hot-rolled coil price assessment in Northwest Europe.

Annalisa Villa

 

Celsa Nordic targets start of hydrogen-based sustainable steel production in H2 2027

At the EUROMETAL meeting in Oslo, a Nordic division of Celsa Group provided details of its more than EUR 35 million project to introduce hydrogen in their value chain.

Celsa Nordic is making progress in its project to reduce CO2 emissions by 50% by 2030 as compared to the 2018 level and become carbon neutral by 2050. The project is based on integrating a unique hydrogen-based solution. The first step of the two-phase hydrogen plan includes the construction of an elecrolyzer by Norwegian renewable energy company Statkraft in Mo industrial park. The second step involves the use of this green hydrogen in a reheating furnace to heat billets, Metal Expert learnt from the presentation made by Celsa Nordic’s marketing director, Halvard Meisfjord, during the Eurometal event in Oslo. The producer will be able to use hydrogen as a 100% energy source or in combination with natural gas in the new rolling mill furnace. Using a mix of different gases will help the producer hedge the risks arising from energy price volatility.

“When we succeed, we will be the world’s first steel producer offering the marked reinforcing steel produced using clean hydro power and green hydrogen,” the company said.

The producer expects investment in the project to be above NOK 400 million (EUR 35 million), of which NOK 121 million (EUR 11 million) is provided by state-owned funding firm Enova. It is now in the process of choosing the supplier of the new furnace. The construction of the elecrolyzer and the furnace is now planned to start in late 2026. Celsa Nordic aims to start producing the first products at the upgraded mill in H2 2027, Metal Expert learnt.

Celsa Nordic produced 683,000 t of rebar and wire rod in 2023, according to the presentation.

Earlier this year, Celsa Group announced it was considering an option of selling its international divisions in Norway, Poland and the UK to be able to repay its debts, Metal Expert reported.

Lilit Papoian – l.papoian@metalexpert.com

metalexpert.com

EUROMETAL Nordics: Decarbonisation of EU steel industry at full speed, market struggles to keep up

Three key topics were discussed during the Nordics conference held by Eurometal in Oslo on June 3-4: decarbonisation of the steel industry; demand for green steel; CBAM regulation.

 

Green steel and decarbonisation

The supply and demand for green steel in the European market were widely discussed in Oslo. Steel mills at the conference expressed confidence in the future growth of green steel demand, despite current interest being limited to certain industries. According to SSAB’s Matts Nilsson, this demand is mainly driven by EU-imposed legislation. “Buyers never want to pay more, so mills have to always calculate the value for the customers. If they cannot generate the value towards their customers it’s impossible for the mills to charge a high premium price. It has to be a win-win situation and so far buyers have quite high targets put on them and this is more of a compliance for them to fulfill that,” Nilsson said during the panel discussion.

However, buyers’ attitudes are gradually changing, with the market becoming more receptive, according to Sarah Milne from H2GS. “We have five to seven year long legally binding agreements, they are not framework agreements, and they have got pricing in them, they have got supply in them. Our customers are willing to pay, we pre-sold half of our volume [2.5 million tpy]. There is a lot of first move advantage, there is a lot of OEMs wanting to be first. Automotive also wants to be first, and now we see construction companies coming through. We are also having conversations with Tiers, service centers,” Milne said.

To properly function, the green steel market requires EU legislation that defines what green steel is. Currently, there is no market consensus, other than it being steel with low carbon emissions, with each mill defining its own standards. “We are all talking about the same things but slightly different. And I am absolutely sure that we will see different shades of green and there will be different pricing points associated with abatement of CO2,” Milne said.

Access to renewable energy is crucial for EU steelmakers to successfully decarbonise their businesses. Therefore, new green steelmaking facilities are emerging in areas with affordable renewable energy, such as SSAB and H2Green Steel in northern Sweden and Hydnum Steel in southern Spain. “The future of hydrogen industry in Spain is in Puertollano, the first electroliser of Spain is there and that’s why we are located there,” Fernando Pessanha from Hydnim Steel said during the panel discursion. However, the EU’s renewable energy infrastructure is underdeveloped, necessitating government support for its expansion, according to industry participants.

 

Higher demand for steel from renewable energy industry

As investments in the renewable energy sector continue, they are boosting demand for steel products, particularly steel plates. With the development of the offshore wind segment, the need for thicker-gauge steel plates for foundations production will increase. Most of these foundations will be monopiles and the number of annually installed foundations is projected to rise from about 250 in 2023 to over 800 in 2027, requiring approximately 1.9 million t of plates over 80 mm thick.

Currently, neither EU mills nor foreign suppliers can meet the future demand for these plates. Rystad Energy, an independent research and business intelligence company, estimates that EU mills can supply only 1.2 million t of plates over 80 mm thick, with an additional 300,000 t potentially imported from suppliers like Nippon Steel, Posco, and JFE. This shortfall will inevitably lead to a shortage of plates for the offshore industry and subsequent price increases.

“This means that large companies will be able to procure first, while small developers will be second and third in line. So, we expect some stockpiling of that material so that the developers will have the material at hand when the time comes to use them,” Audun Martinsen from Rystad Energy said during his presentation.

As this shortage of plate used in monopiles could not be supplied by the EU mills, which are not expected to invest enough to catch up in capacity, Europe will start importing more ready-made monopiles, from China particularly.

 

CBAM and safeguards

Another widely discussed topic at the meeting was the Carbon Border Adjustment Mechanism (CBAM), its necessity, and the potential harm it could inflict on the EU steel industry as a whole. Both buyers and sellers agree that CBAM regulation is essential for EU steelmakers to remain competitive against foreign suppliers, who are globally increasing their production capacities.

“They key interesting market is India. They are increasing production capacity immensely, building new blast furnaces. They are also saying they will decarbonise by 2070,” Jaap-Jan Aardenburg from Tata Steel Netherlands said.

“There always comes import steel to Europe and if it comes without any demand to it and at much lower cost the rest of us managing to raise that capital and produce will be erased,” Halvard Meisfjor from Celsa Armeringsstal added.

However, these import restriction measures are affecting steel consuming industries. “I wish EOMs had more representation in Brussels, because their needs are hardly considered by the EC while making decisions to protect EU steel industry. Import of certain components starts to increase to the EU and domestic OEMs have hard time competing with them,” a conference participant told Metal Expert on the sidelines of the event.

Eventually, the course for decarbonisation of EU mills and CBAM will make European steel products more expensive and not always competitive with imports, an issue that the European Commission must address. There are expectations that it will do so and expand the CBAM product scope to include finished products as well.

Lilit Papoian – l.papoian@metalexpert.com

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