European steel market participants have been digesting the recent news about several new investments in green steel projects put on hold due to challenging market fundamentals.
The economic slowdown in Europe — notably the downturn across key steel-using sectors, such as automotive and construction — weighed on the green steel market as well, slowing down the uptake of decarbonized products.
“Not the best time to pay premiums for green steel, when mills cannot even push €40 increases for gray steel due to lack of consumption,” a buyer in Germany said.
Green steel produced in European electric-arc furnaces, with Scope 1, Scope 2 (direct) and Scope 3 (indirect) greenhouse gas emissions below 0.8 tonnes of CO2 per 1 tonne of steel, has been on offer at premiums of €200-350 ($211-369) per tonne in November.
These offers have been broadly stable during the course of the year, but tradable values for the spot market were lower, sources said.
“Higher premiums of €200-350 per tonne was something mills were getting under long contracts with [original equipment manufacturers],” a buyer said.
Buyer sources estimated the achievable premiums for green steel with that level of emissions would be closer to €50-150 per tonne. Bids were reported at €50-80 per tonne during the week.
One mill source estimated achievable values at €100-200 per tonne.
As a result, the green steel premium for flat steel in Europe was stable, with Fastmarkets’ weekly assessment of the green steel domestic, flat-rolled, differential to HRC index, exw Northern Europe set at €80-200 per tonne on Thursday, stable week on week.
For steel produced in blast furnaces, with reduced carbon emissions of 1.4-1.8 tonnes of CO2 per 1 tonne of steel, premiums were reported at €40-60 per tonne.
A buyer source suggested a premium level of €0-50 per tonne for steel with emissions of 1.4-1.8 tonnes of CO2 per 1 tonne of steel.
One mill offered at a premium of €60 per tonne for steel with emissions of 1.95 tonnes of CO2 per 1 tonne of steel, but this was deemed “too high” by most buyer sources.
Another steelmaker in Northern Europe was offering a premium of €40 per tonne for steel with emissions of 1.8 tonnes of CO2 per 1 tonne of steel.
Fastmarkets’ assessment of the flat steel reduced carbon emissions differential, exw Northern Europe was €0-50 per tonne on Thursday, widening from €30-40 per tonne a week earlier.
