European green steel premiums slide amid general downturn in steel sector
“This year started on a positive note, but demand is deteriorating, the steel market is weak in general and the willingness to pay a premium [for green steel] is not there,” a mill source told Fastmarkets.
Market participants said there was a lack of projects across Europe requiring green steel and demand from the key consumer – the automotive industry – had also been slow lately.
European suppliers have, therefore, started to be more flexible with their green steel sales and have started offering discounts on bigger lots.
Notably, recent trades for steel with Scope 1, 2 and upstream Scope 3 emissions below 0.8 tonnes of CO2 per tonne of steel, were reported at €100-150 ($111-166) per tonne.
And one transaction was said to have been completed with a premium below €100 per tonne – although that was for for steel with CO2 content below 0.3 tonnes per tonne of steel and could not be widely confirmed, sources told Fastmarkets.
Most buyers estimated the achievable premiums for green steel with Scope 1, 2 and upstream Scope 3 emissions below 0.8 tonnes of CO2 per tonne of steel at €100-200 per tonne.
In stark contrast, however, offers for the same material were reported at €200-300 per tonne during the assessment week.
Fastmarkets’ weekly assessment of the green steel domestic, flat-rolled, differential to HRC index, exw Northern Europe was €100-200 per tonne on Thursday, widening downward from €150-200 per tonne on August 29.
The corresponding green steel base price, HRC exw Northern Europe, daily inferred was €737.60 per tonne at the midpoint on September 5.
Despite the weak market and slow consumption, sources told Fastmarkets they remain optimistic regarding the take-off of green steel in Europe in the coming years.
“The transition to green steel is still on the cards – it’s coming; it’s inevitable. But considering the current economic situation [in Europe], it is going to be delayed,” a large buyer in Northern Europe said.
Prices stable in Northern Europe long steel market amid continued weak demand
Summer closures further slowed demand, sources said.
Fastmarkets’ weekly price assessment for steel reinforcing bar (rebar), domestic, delivered Northern Europe was €620-635 ($688-705) per tonne on Wednesday, stable week on week.
Mills remained resistant to offering price discounts, despite weak demand and falling feedstock costs, Fastmarkets heard.
Minimal large-tonnage trades were reported, with customers opting to restock small tonnages with short lead times, and mills were reported to be offering premium prices for these very small-volume trades, sources said.
“Prices are unchanged, and demand is depressed,” a trader source told Fastmarkets.
“Producers are trying to delay an imminent price reduction, and since clients tend to order only what is necessary, this results in orders with very short lead times,” a buyer source said.
The corresponding Fastmarkets’ weekly price assessment for steel wire rod (mesh quality), domestic, delivered Northern Europe was €615-650 per tonne, stable week on week.
Despite prices remaining flat, new lower offers were expected in the coming week, Fastmarkets heard.
“At the moment, there is still stability in the wire rod prices. There could be some speculation based on scrap values that have dropped in Turkey,” a wire rod producer source said.
There was uncertainty in the market regarding the direction of future scrap prices, Fastmarkets understands.
“We don’t know what the real Northern European September scrap price for bigger volumes will be and what the reaction of rolling mills will be, as industry margins are very low,” the producer source added.
Scrap prices were largely stable at low levels week on week. Prices have fallen since the beginning of August due to a downturn in Asia-origin billet import prices.
Fastmarkets’ calculation of its daily index for steel scrap HMS 1&2 (80:20 mix) North Europe origin, cfr Turkey was $359.87 per tonne on Wednesday, down by $1.28 per tonne week on week and by $23.78 per tonne month on month.
Thyssenkrupp lines up Steel supervisory board chairman successor
Following the departure of several members of the executive and management boards of thyssenkrupp Steel last week, the next chairperson of the supervisory board could be Ilse Henne, chief executive of thyssenkrupp Materials Services.
Although an appointment has not yet taken place, parent thyssenkrupp AG says its executive board has proposed Henne, the company tells Kallanish upon request. Henne became ceo of the distribution division after the departure of Martin Stillger. She has been with the division for a while. As head of a unit in the Benelux, she improved the coordination of local companies in Belgium and the Netherlands to achieve synergy.
Stillger took his leave due to a disagreement with tk AG ceo Miguel López, insiders say. They also believe that Henne has a much better standing with López, as she not only became a divisional ceo, but earlier also a member of parent AG’s board. Her potential new appointment would support that assumption.
Her earlier appointment at tk Materials was one of two decisions that were preceded by a standoff in the supervisory board at the AG, between the representatives of shareholders and of employees. The decision came about on the basis of chairman Siegfried Russwurm executing his double vote. The same move served to release the sale of a 20% stake in tk Steel to Czech energy firm EPCG.
Both decisions were followed by harsh criticism from union and employer representatives, who called it a violation of the corporate culture of fair co-determination. The ongoing dispute between tk AG’s management and employer factions came to a head with last week’s mass exodus from tk Steel’s board.
In a statement this week, union IG Metall reiterated that the confidence between employees and ceo López was shattered. It asked López and Russwurm to return to a sensible dialogue with employees, rather than push through decisions against the other faction. The union mentions a campaign branded “López is not our ceo”, which has been signed online by several thousand members.
Christian Koehl Germany
