German fabricator production continues to trend lower
The production volume of Germany’s steel and metals working industries from January through September was 7.2% lower than in the first nine months of 2023, according to industry federation WSM.
Order intake in the first seven months was down 12.8% y-on-y, amid the ongoing economic dip, WSM notes, while utilisation of production facilities was 76.3% in July, Kallanish notes.
September reported a 6.7% year-on-year decrease, a less sharp fall than July’s 10.8% y-o-y decrease.
In August a poll by economic research firm ifo Institute reported 43% of companies in the sector predicted a decline over the next six months from an already modest level of business activity. Half of the respondents expected business to remain flat.
By June, the industry workforce had reduced by 8,700 y-on-y, which is around 2.4% of the former workforce, Kallanish understands.
In early October, WSM reported that 41% of its members would have to lay off further staff.
The federation’s managing director, Christian Vietmeyer continues to call on policymakers to take action against a further industrial deterioration, with a focus on tackling uncompetitive power prices in Germany.
He conceded that the ongoing political situation was also more challenging, after collapse of the current government, with new elections projected for early 2025.
Christian Koehl Germany
Ruukki opens new roof profile production
Ruukki Construction, part of SSAB, has opened the new roof profile production line in Vimpeli, Finland, Kallanish notes.
Recent years have seen Ruukki spend a total of €8 million ($8.4m) on the Vimpeli plant as part of a multi-year investment programme. In Vimpeli, the company has further improved product properties, streamlined material flows, increased production capacity and the degree of automation, upgraded production lines, and improved social and civil defence shelter facilities, SSAB notes.
The almost 100-metre profiling line in Vimpeli will double the production capacity of the plant’s snap lock roofing. It is dedicated to making Ruukki Classic, Ruukki Classic LowCarbon and Ruukki Trendic profiles, and is the largest single machine investment in the project, which was announced in December 2021.
The improvements will result in new, better and more sustainable roofing products, more efficient for installation partners as well as for house builders and renovators, SSAB says.
Christian Koehl Germany
Italian steel output increases
Italian crude steel output increased in October for the first time following several months of decline, industry association Federacciai says in a note obtained by Kallanish.
In October, production ticked up by 2.2% on-year but slipped by 4.7% in the first ten months of the year to 17 million tonnes.
The two categories of long and flat products demonstrate a clear production trend that persisted for almost the entire year, according to the association.
Flat steel production fell 12.3% to 794,000t in October and by 10.5% to 7.2mt over January-October. In contrast, longs output ticked up last month by 0.6% to 1mt and by 0.5% to 9.9mt in the first ten months.
In the first half of the year, Italian crude steel output fell by 5.2% on-year to 10.8mt. It declined by 11.5% y-o-y in 2022 to 21.6mt and by 2.5% on-year to 21mt in 2023.
Natalia Capra France
GreenIron, Scandinavian Steel sign distribution agreement
GreenIron, the start-up venture that was firstly announced in spring this year, has entered into an agreement with Scandinavian Steel AB, a Nordic distributor of metals, Kallanish notes. Both companies are headquartered in Stockholm.
According to a statement by the companies, Scandinavian Steel will become the exclusive distributor of GreenIron’s fossil-free iron, to be produced in Sandviken, Sweden. The agreement covers regular delivery of hydrogen-based direct reduced iron, which will be offered to the Nordic and European markets, they state.
“This partnership is a milestone not just for Scandinavian Steel but for the entire industry. Offering fossil-free iron to our customers is not only important – it is essential,” says Peter Witz, Scandinavian Steel chief operating officer.
GreenIron is set to begin commercial production in Sandviken in 2025. The market has already shown significant interest in GreenIron’s fossil-free production, the company notes. In summer, it collected SEK 100 million ($9m) of additional financing, and on that occasion also announced a larger financing round within the next six to nine months.
Christian Koehl Germany
Kallanish Green Steel Strategies debates obstacles to decarbonisation
Kallanish Green Steel Strategies held in Brussels on 27 November debated the key obstacles holding back the decarbonisation of Europe’s steel industry, including renewable energy and hydrogen bottlenecks, legislative restrictions, financing availability and raw materials supply limitations.
High European electricity costs make steelmakers uncompetitive on global markets
Henrik Adam, vice president of European corporate affairs, Tata Steel Ltd and president of Eurofer, said that Europe was not a level playing ground on energy costs, while Stanislav Zinchenko, chief executive of consultancy GMK Center, expects steelmaking to relocate within the bloc to where low-cost energy is, noting that EU members were now also competing among themselves.
“We can assume production in the EU will move away from high power cost countries to low-cost ones,” Zinchenko said.
“We have all the ingredients with speed and the right mindset to make Europe great again,” Adam noted.
Lack of regulatory frameworks, demand-side policies hinders investment and uptake
“When we build a strategy, it cannot be a global strategy. We know what to do in India for the Indian market, we know what to do in America for the American market, we don’t know what to do in Europe because the clarity is not there,” observed Stephane Tondo, head of climate change at ArcelorMittal.
Åsa Ekdahl, head of environment and climate change at the World Steel Association, told delegates: “There are quite a lot of policy developments on the supply side but very little on the demand side,” adding that not enough was being done.
Meanwhile, while some bemoaned a lack of regulation, many were critical of the EU’s Carbon Border Adjustment Mechanism in its current form.
“It’s the right tool; it needs development over many years to come … There is a lot of work still to be done,” said Christoph Zinsser, head of project finance at Stegra.
Several participants also called for the scope of products to be expanded further to avoid carbon leakage, which Adam said was forcing customers to leave Europe, with finished car products then being imported into the bloc.
“We want to decarbonise but do not want to de-industrialise,” Adam asserted.
Missing ‘green steel’ definition making buyers reluctant to commit to premiums
Ekdahl pointed to the lack of a global standard for green steel as being a barrier, while Josu Piña Bilbao, director of business development at SSAB Europe, noted the lack of regulation clarity on a green steel definition.
For some steelmakers, future offtake contracts were being agreed with a premium, but for others it was not their priority, with companies reluctant to agree a premium without a set definition several years ahead of delivery.
The automotive industry was said to be a key driver of demand for green steel, while the white goods and construction sectors lagged behind for now.
Challenges, roadblocks hamper available decarbonisation options – many concentrated in certain regions
The supply of high-quality scrap and potential trade barriers could hamper the growing adoption of EAFs, panellists noted.
“There’s not enough clean scrap around,” noted Metalshub co-founder and managing director Sebastian Kreft.
Daniel Pietikainen, trade and environment officer at the Bureau of International Recycling, said trade barriers could discourage investment in scrap processing and see scrap suppliers exiting the supply chain.
Europe is currently the epicentre for announced decarbonisation projects, but the US and the Middle East are catching up. However, the EU will not be a cost competitive location for hydrogen reduction.
Most panellists agreed that hydrogen will not be shipped, regardless of logistics costs. Instead, hydrogen hubs would become iron hubs, with green iron being a cost competitive material which can be shipped to steelmakers without resources available locally.
On carbon capture and storage, a panellist from Transition-Asia noted that the costs and risks outweighed the benefits.
On hydrogen availability, amid project delays and high costs, Anna Pekala, market director green energy transition at Ramboll, said the EU’s plans to annually import 10 million tonnes of hydrogen and produce the same amount domestically by 2030 were “unfortunately very unlikely.”
“The realistic capacity will be at only 25-30% of that. Not more than 50-65 GW of installed capacity of electrolysers,” she added.
On metallics, the supply of different grades of iron ore would likely become a challenge for miners and steelmakers.
“The mining companies are desperately looking for solutions for lower to mid-grade iron ore. In the future, they will end up in an oversupply, while the higher-grade iron ores are already looking at an undersupply,” said Alexander Fleischanderl, Primetals chief technology officer & head of green steel.
Carrie Bone UK
Hopes for Europe steel HRC price rebound in Q1 clouded
Fastmarkets calculated its daily steel hot-rolled coil index, domestic, exw Northern Europe, at €560.00 ($591.61) per tonne on November 29, up by €0.67 per tonne from €559.33 per tonne on Thursday.
The index was down by €2.50 per tonne week on week but up by €4.58 per tonne month on month.
Trading was quiet, but several trading sources expected more activity next week.
“Buyers will need to sort January booking ahead of the Christmas break,” a market source in Germany said.
He added that in Germany many trading companies, steel service centers (SSCs) and original equipment manufacturers (OEMs) would already be closed for Christmas holidays in the week starting December 16, for three-to-four weeks, so the market would be “dead.”
Besides, in the following week, the outcome of long-term contract negotiations with automotive OEMs and steelmakers should be more clear, which would “set the tone for spot sales,” market sources said.
As Fastmarkets has reported, buyers were expecting discounts for first-half and full-year 2025 contracts, while mills were hoping for a price rollover.
One OEM in the region said that it had booked HRC volumes for the second half of 2024 at €730-740 per tonne, and hoped for €650 per tonne in the new negotiations.
Meanwhile, in the spot market, offers of January-February delivery HRC from first-tier mills in the region were still being heard at €600 per tonne ex-works, but no confirmed trading has been done at this price so far.
“We haven’t had evidence of any transaction [at €600 per tonne ex-works]. The buyers are still in wait-and-see mode,” an SSC in the region said.
Estimates of tradeable values were reported by buyer sources at €550-570 per tonne ex-works on Friday.
Meanwhile, in Southern Europe, Fastmarkets calculated its daily steel hot-rolled coil index, domestic, exw Italy, at €558.33 per tonne on Friday, flat from Thursday.
The Italian index was down by €1.25 per tonne week on week but up by €9.70 per tonne month on month.
Sources expected more clarity on the price direction in the Italian market in the next two weeks, when deals for HRC with first-quarter delivery should be finalized.
Buyer sources estimated an achievable price around €570-580 per tonne delivered (€560-570 per tonne ex-works), while target offers from local suppliers in Italy were heard at €600 per tonne delivered (€590 per tonne ex-works).
Trade restrictions and an offer-bid disparity kept trading quiet in the imported HRC market as well, trade sources said.
Besides, overseas suppliers were offering late-January shipment, which would mean March arrival. Such long lead times in the highly volatile market kept buyers away from imports.
In the week to Friday, HRC offers from Asian mills were heard in the range of €555-570 per tonne CFR, and at €590-600 per tonne CFR from Turkey.
Buyers estimated an achievable price for imports at €520-530 per tonne CFR, but no such offers were confirmed in the market.
One source suggested that €540 per tonne CFR could be achieved for larger tonnages.
Green steel in focus: five key questions answered by experts
The context
In 2023-2024 Fastmarkets launched 12 green and reduced carbon steel prices to assess the price differential against traditional flat and long steel prices, to establish benchmarks in the emerging markets, bring more transparency for the industry and support the investment decisions needed to reduce emissions.
MB-STE-0904 Green steel domestic, flat-rolled, differential to HRC index, exw Northern Europe, €/tonne
MB-STE-0905 Green steel base price, HRC exw Northern Europe, daily inferred, €/tonne
MB-STE-0907 Green steel import, differential to HRC index, cfr Vietnam, $/tonne
MB-STE-0908 Green steel base price, hot-rolled coil cfr Vietnam, weekly inferred, $/tonne
MB-STE-0911 Flat steel reduced carbon emissions differential, exw Northern Europe, €/tonne
MB-STE-0912 Flat steel reduced carbon emissions, daily inferred, exw Northern Europe, €/tonne
MB-STE-0916 Green steel domestic, differential to US HRC, fob mill, $/short ton
MB-STE-0917 Green steel base price, hot-rolled coil fob US mill, weekly inferred, $/short ton
MB-STE-0921 Green steel import, differential to rebar assessment, cfr Singapore, $/tonne
MB-STE-0924 Green steel base price, rebar cfr Singapore, weekly inferred, $/tonne
MB-STE-0922 Flat steel reduced carbon emissions differential, exw China, yuan/tonne
MB-STE-0923 Flat steel reduced carbon emissions, daily inferred, exw China, yuan/tonne
The subject experts
Alexander Fleischanderl, chief technology officer, Primetals Technologies
Jose Noldin, chief executive officer, GravitHy
Paulo Carvalho, independent consultant and managing director, decarbValue
The Q&A
There are quite a few new green steel projects announced in Europe with new green steel tonnages expected to arrive in the market starting 2025-2026. Volume-wise, how many tonnes of green/carbon reduced steel will be in the market in the next five years?
Alexander Fleischanderl: It’s true that Europe is progressing at high pace with multiple transition projects. However, the first thing required is a definition of “green steel.” We see individual brandings for steel producers in the market, where the carbon footprint is different. And we should stop the proportional green steel allocation system, where the reduced fossils usage is allocated to a specific amount of steel produced.
The real carbon footprint of the individual coil purchased by the end-customer is different to what is allocated. What we need is a coil- or sequence-based carbon footprint certificate.
The ongoing transition projects will still work with a high share of natural gas for their Direct Reduction Plants (DRPs). The steel produced will be low-carbon steel, but not net-zero yet.
But cost competitive real green steel cannot be expected soon. Hydrogen procurement deals are at a level of around €8 per kg instead of earlier reported forecasts of €2-3 per kg before 2030.
The chicken-egg problem is obvious, the hydrogen market must scale, but it hasn’t yet because the demand side is weak.
Despite these roadblocks, we recognize a growing interest for low-carbon footprint steel from the demand side especially for automotive and white goods, but also in terms of public procurement. The share of green steel in Europe in five years’ time could be around 10% of total production.
But its competitiveness compared with “gray steel” (regular steel) can only be achieved by combining three things: the benefits from the avoidance of emissions trading scheme (ETS) payments; a green steel premium; and support from the public for Capex [capital expenditure] and Opex [operational costs].
Jose Noldin: I strongly believe the market will be tight and more than people might anticipate. But that will strongly depend on regulation, standards and definitions, rather than on self-imposed targets. It is carbon pricing developments and broader initiatives, such as the European Union’s “Green Deal Industrial Plan” and “Steel and Metals Action Plan,” that will move the needle in terms of business environment, demand aggregation, etc.
To give some numbers, I expect the demand for truly green, fossil-free steel (less than 400 kg of CO2 per 1 tonne of steel) to be at least 10 million tonnes a year in 2030. As the offer will not be there, people may end up with solutions such as CO2-reduced/mass-balance steels, which, in my opinion, is very borderline from a greenwashing perspective.
Paulo Carvalho: It depends on what we are calling “green steel” here. In terms of hydrogen-based, near-zero-emissions steel (with a CO2 footprint well below 400 kg per tonne, including Scope 3 emissions), for flat products, the available tonnages are [almost non-existent right] now – other than tiny pilot volumes – and will be very limited in the next five years. But before 2030, [availability will be] in the low-single-digits in millions of tonnes in the best case scenario.
Stegra [formerly H2 Green Steel] is likely to have ramped up the plant it is building in Boden, Sweden; Hybrit/SSAB will be scaling up its first demonstration plant; and GravitHy may have started up its H2-DRI [hydrogen-powered direct reduced iron (DRI)] plant in France enabling hydrogen-based green steel production elsewhere.
Various other projects could also be at or close to ramp-up, while some may face delays – so volumes will still be relatively small and that will remain the case even if we add volumes from European scrap-based EAF flat steel plants – because there are only a handful of those.
The bulk of low-carbon flat steel within this timeframe will still be of certificates-based products, or using mass balancing, with a higher carbon footprint. So the supply-demand balance will still be relatively tight. For long steel, a much bigger share of European production already meets lower CO2 emissions thresholds, so the supply-demand balance is much less tight.
Most of the EU flat steelmakers are opting to switch from the conventional, blast furnace-basic oxygen furnace (BF-BOF) route to using electric-arc furnaces (EAFs) or the EAF+DRI steelmaking route, but what other options does industry have?
AF: Well, there are not too many transition options out there, despite opting for EAF, with a flexible feedstock mix, but including DRI/HBI to dilute tramp elements coming along with scrap usage. The DRP can either be integrated or decoupled from steelmaking, allowing for an investment in regions that benefit from much lower energy costs.
A viable option, still not sufficiently supported by governments, is carbon capture utilization and storage (CCUS). We believe the net-zero timeline will be missed without a proper deployment of CCUS technologies.
Last, but not least, there is the option to optimize existing assets. This includes the electrification of burners and furnaces, endless casting & rolling, any energy efficiency measures, waste heat recovery from waste gas as well as improving circularity [through] yield improvement, recycling of by-products and more scrap usage.
JN: Options include 100% scrap (very limited due to scrap availability both in terms of quantity and quality), biomass (huge challenges in supply chain) and CCUS (huge issues with regulation, economics and TRL). Other options, such as Molten Oxide Electrolysis (MOE), still have a long development journey ahead of them.
I, therefore, firmly believe that pursuing the H2 based DRI+EAF route – especially with innovative business models where Iron is decoupled from steel – remains the right way to go and will allow for a very competitive scheme. In this way, iron is produced where low-carbon electricity is available and competitive; is then shipped globally as a commodity to steel producers that will play in their own backyards, in their comfort zone – ie, steel production. And in the transition, using hot-briquetted iron (HBI) to boost blast-furnace operations can also be a very interesting and competitive solution.
PC: Europe has a large fleet of existing BF-BOF plants, many of them running very efficiently and close to downstream processing plants and end markets – although most are suffering in current market conditions. Therefore, many players are opting for an intermediary solution, replacing the BFs only (with a DRI+smelter to leverage lower-grade ores) and keeping the steelmaking with their existing BOFs. The economic case for this solution is probably better than a full conversion to H2-DRI steelmaking, especially if the cost of hydrogen remains higher for longer.
Imported, or third-party, DRI/HBI could also play a major role, either from EU countries/sub-regions where green power prices are competitive, or from third countries/regions such as the Middle East & North Africa (MENA) region, which are well suited to renewable power and have competitive gas prices.
Policies and regulations in the EU are massive drivers for decarbonization, notably the EU emissions trading scheme (ETS) and its carbon border adjustment mechanism (CBAM). So, is CBAM a problem or a saviour for the industry? What impact will there be on the market once CBAM is fully phased in from 2026 on and free-ETS certificates start being phased out (halved by 2030 and fully eliminated by 2034)?
AF: ETS is the main pillar supporting EU transition project investments. For example, assume that a 6 million tonnes per year steel mill emits 10 million tonnes of CO2… If the ETS price is at €150 per tonne in 2034, the steelmaker would have to pay €1.5 billion per year, adding €250 per tonne of steel produced.
CBAM is, indeed, controversial [because] it adds a lot of administrative burdens for all players in the steel value chain, including technology providers, such as Primetals. But it is the only instrument identified to avoid carbon-intensive steel from flooding into the EU from other markets. So it at least provides a level [playing field] for all players. But it can be expected that foreign markets will produce their own share of low-carbon steel for export to the EU, so the CBAM weapon may not be as effective as hoped.
JN: CBAM cannot be reduced to a saviour or a problem. It is a good (yet complex) starting point because without instruments like CBAM the market does not resolve the decarbonization puzzle by itself. CBAM is imperfect, I agree, but it is definitively needed, so I hope it stays and gets improved, optimised, fixed, reinforced, and so on… but not abandoned or significantly slowed down.
The impact is obvious! For example, with a carbon pricing of €100 per tonne of CO2 once allowances are phased-out, a fossil-based steel producer will have a “penalty” of roughly €200 per tonne of steel if it insists on sticking with the coke-based BF-BOF route. From a different perspective, this could be considered the so-called “green premium” which is needed during the transition while the CBAM/phase-out allowances are not fully in place.
But a workable and strong CBAM, along with a full phase-out of the allowances, will make the polluters pay and will, therefore, serve as a huge driver for investments in green steel.
PC: CBAM is a temporary but necessary evil – as I keep repeating. Necessary, because, in the absence of a global carbon price, European production is penalised vis-à-vis imports and that distorts capital allocation (and jobs, tax generation etc); evil, because the sheer complexity of compliance – most usual exporters to the EU are not prepared yet – generates distortions itself and ends up being a de-facto non-tariff trade barrier.
So, in my view, CBAM has to be temporary. There will be pushback from other regions and, ultimately, industry and policy efforts have to be toward convergence of carbon policies and pricing globally, not on raising border tariffs. Until that happens, of course, it will affect the market, favouring imported steel with lower-emissions footprints – with MENA potentially emerging as a key source – and penalizing existing conventional steel importers.
Another major impact will be on the competitiveness of EU steelmakers in export markets: because there is no ETS rebate for exports or “inverted CBAM.” The European mills [that bear a carbon costs] will increasingly be at a competitive disadvantage in export markets without a similar carbon price and will lose market share.
Raw materials challenges arise from new ways of steelmaking. Can we expect potential shortages of pellets, scrap? And how will raw materials supply chains evolve?
AF: The trend for massive new DRI/HBI capacity is likely to continue and even accelerate. DR-grade iron ore will be in short supply and pelletizing capacity is likely to run short as well.
We see three ways forward: iron ore beneficiation efforts; using lower-grade iron ore in DRP; and ground-breaking fluidized bed based DRP that does not require pelletizing. In the case of lower grade ore usage, a smelter is required to maintain high metal yields and efficient gangue removal in he form of added-value slag to support circularity.
Fluidized bed DRPs are more energy efficient, improving yield and are lower in overall Capex. Utilization of more scrap is indeed the most effective way to decarbonize. However, even in 2050 more than 50% of steel production will be based on virgin iron ore. The EU is still exporting about 20 million tonnes per year of lower-quality scrap, mainly to Turkey. We should increase our efforts to process and clean EU scrap to produce a recycled feedstock with certified quality and chemical analysis. Digitalization, including artificial intelligence (AI) will support these efforts.
JN: I believe the market will react if the demand is there. Today, pellet makers, for example, face a chicken-and-egg dilemma. There is a potential shortage, but projects need to be more mature and reach final investment decision (FID) to allow pellet producers and scrap processors to invest in new capacity, new technologies and debottlenecking!
If nothing is done, yes, there will be a shortage. But I still believe that when DR projects reach FID, pellet producers will recognize the great opportunity to play in the high-value side of the business and then invest in new capacity.
Still, for some years the market may be tight and support good premium levels which, by the way, will incentivize new investments in capacity.
PC: DR-grade pellets and agglomerates are already relatively scarce and the raw materials industry has an immense challenge to ramp up capacity and production. That requires big investments in concentration/beneficiation plants and pelletizing plants as well. Other high-grade pellets will also be increasingly used, in combination with a melter/submerged-arc furnace to remove gangue after the DRI making process, which will help alleviate the relative scarcity.
Scrap is already fully recycled and we already broadly know now how much will be available to be recycled into new steel in, say, 2050 – only about half of the world’s steel needs by then. But given it’s direct contribution to lowering the carbon footprint of the steel produced, I currently see a scramble for scrap resources (and sorting/processing facilities) and that will only intensify in the coming years.
The supply chain will continue to further integrate vertically into scrap and the miners, steelmakers and end users will intensify the development of partnerships to ensure end-to-end availability of high-quality raw materials for the required low-carbon final products.
Renewable energy and green hydrogen are deemed to be the weak spots of decarbonization, notably due to high price of hydrogen. Are there alternatives to the use of green hydrogen in steelmaking?
AF: Renewable power availability and pricing is the most pressing roadblock. Power prices have a strong impact on hydrogen prices – the main reason why decoupling the energy-intensive ironmaking from steelmaking has become an omni-present discussion point.
Regions like the Middle East, North America and Australia have different energy prices. We are talking about up to 10-fold prices per MWh in Europe! The alternative to hydrogen is electrification of process steps (again electric power) and the intermediate use of natural gas while processes are designed to switch to hydrogen at a later stage.
JN: I believe people are looking from the wrong angle here. Instead of just saying that hydrogen is expensive, people should reconsider their business model. Make hydrogen where low-carbon electricity is available and competitive and then ship DRI/HBI as a commodity to steel-producing sites. It’s a big mistake is to insist on making iron close to steel just because “this is what we have been doing as an industry for decades.”
It’s very simple! Hydrogen-based DRI/HBI can be cost effective and a smart way to store and/or transport hydrogen! It’s just that it will be H2 in “metallic form.” In other words, decoupling iron from steel can catapult the H2 economy and decarbonize steel production with a very interesting and competitive value chain. In the future, Iron will be produced by ironmakers and steel by steelmakers. Looks logical, doesn’t it?
PC: Ironmaking has been dominated by coke (fossil coal) as the key reductant and, although hydrogen is the key solution to reducing the reliance on fossil reductants, natural gas is a tried-and-tested (and widely used) alternative.
To produce near-zero emissions steel, its CO2 emissions have to be captured and stored. The economics and geology for that to happen at scale are still to be proven and differ widely region by region, and it can involve controversial aspects such as enhanced oil recovery, but in my view carbon capture and storage (CCS) will play a key role in the steel sector’s transition to net zero.
Italian plate producers push up prices
Italian heavy plate prices are on the rise, driven by a resurgence in domestic demand and producers’ price hike attempts in order to restore margins, Kallanish notes.
The market is showing signs of increased activity, as reported by mills; however, distributor sources indicate that weak activity persists downstream. Given the current environment of tight margins and insufficient profitability, there is a request for a €30/tonne ($31.7) increase for deliveries scheduled in December. One mill has plans to raise prices further for deliveries scheduled in January and February.
Producers are indicating a lead time of approximately two weeks. It appears large customers have not resumed their purchasing activities, having acquired substantial quantities from the import market in recent weeks. Distributors are still purchasing limited quantities from producers’ inventories.
One producer is reported to be maintaining a diverse inventory of various grades and measures, which is especially beneficial in a market characterised by buyers who favour frequent purchases of smaller quantities.
Producers are now quoting domestic S275 grade plate at €650/t ex-works and S355 at €680-690/t. Current contracts for S275 grade are priced between €620-630/t, whereas S355 is at €20/t higher. The present booking prices for Asian slab remain stable month-on-month, hovering at around $520-530/t cfr.
A source from a mill indicates that a substantial volume of plate imports is consistently entering Europe, with figures slightly below 200,000 tonnes/month. October and November demonstrated adequate performance in sales, albeit typically characterised by short lead times and limited quantities.
Natalia Capra France
EU lacks decarbonisation regulation, demand-side policies
Europe is lacking regulatory frameworks and demand-side policies to support decarbonisation and uptake of green metals, while clarity over definition remains missing, delaying project investments, panellists said at the Kallanish Green Steel Strategies event in Brussels.
Åsa Ekdahl, head of environment and climate change at the World Steel Association, told delegates: “There are quite a lot of policy developments on the supply side but very little on the demand side”, adding that not enough was being done.
“Governments are thinking about how to increase demand, [such as with] CBAM, the new contract for difference policy in Germany, initiatives around public procurement, but it’s moving quite slowly,” she added.
Ekdahl also noted that demand for low-emission steel is coming from the private sector, especially premium brands, with some movement in the automotive industry, but very little within the construction sector.
Stephane Tondo, head of climate change at ArcelorMittal, agreed that “demand is the elephant in the room; this hasn’t been tackled at all by the policymakers.”
“We have seen some policies emerging in green public procurement … in construction and wind. But unlike concrete where public procurement is 50% of their turnover, in steel it’s 5% in flats and 10% in longs. This will not trigger an investment, for 5% of your business,” he asserted.
He added that before investment could be decided, Europe would need to fix the conditions on trade, CBAM, energy, and lead markets.
“When we build a strategy, it cannot be a global strategy. We know what to do in India for the Indian market, we know what to do in America for the American market, we don’t know what to do in Europe because the clarity is not there,” Tondo noted.
Erik van Doezum, head of metals, mining and fertilizers at ING Bank, echoed this lack of regulation.
“The steel industry does not exist in a vacuum; this is about the full European industrial supply chain. Where it seems to be clear to me that the EU hasn’t been able over the past decade to put forward a regulatory framework which encourages innovation and investments and development of industrial landscape,” he said.
Meanwhile Anna Pekala, market director green energy transition at Ramboll, also noted challenges including cost competitiveness.
“Problems on the demand side [are] we see a lack of incentivises and willingness to pay for the green products,” she observed.
On hydrogen, she sees lacking regulatory incentives and clarity, as well as delays in policy being implemented, resulting in project delays and investors being unable to commit and provide funding.
“We see a lot of push on the producer side; the question is, will there be enough decarbonising measures to actually decarbonise the market?” she added.
Ekdahl also pointed to the lack of global standard for green steel as being a barrier, with worldsteel seeking to address this through ongoing work with members, to streamline these approaches together.
Tondo echoed this lack of standards for other markets such as carbon.
“We all dream there’s one global carbon market, as it would give stability … Today it’s not the case, we have different systems emerging. There is no harmonised system at all,” he said.
Meanwhile, Henrik Adam, vice president of European corporate affairs at Tata Steel and president of Eurofer, urged the EU to utilise income from existing measures to support the industry.
“Today, the income from CO2 is by no means flying back into decarbonisation,” he said. “If we used the income from ETS, CO2, CBAM, to decarbonise our industry, it would be a great thing.”
Carrie Bone UK
Liberty Steel officially bankrupt in Dudelange
The bankruptcy of Liberty Steel’s Dudelange site was declared by the Luxembourg Commercial Court. 147 jobs are at stake.
Neither the local management nor the company’s lawyers were present at the Luxembourg Commercial Court at 9am on Friday 29 November. However, Liberty Liège-Dudelange and its Luxembourg site were declared bankrupt after the management admitted that it was in suspension of payments. Olivier Wagner was appointed receiver in front of a few journalists and the LCGB union’s deputy general secretary, Robert Fornieri, who had made the trip.
“The most urgent matter is the employees, who are entitled to their back pay for October and November,” commented Wagner as he left the court. “They will be entitled to their severance pay under the Labour Code, which corresponds to the month of the bankruptcy, the subsequent month, i.e., December, and half the notice period to which they would have been entitled in the event of conventional dismissal.”
A recovery to avoid the real state of bankruptcy
“Everything will be checked by me under the supervision of the supervisory judge, the files will then be sent to the employment administration. We must wait for the date of verification of the claims, which is set in the judgment for January 17, for it to be ratified and sent to Adem,” continued the new receiver. But since employees cannot wait several weeks without pay, the unions will try to find an accelerated procedure to release certain amounts.
“Contacts have already been made with the ministries. For us, the most important thing is the situation of the 147 employees and their salaries, there is still a long time to go before a single euro arrives in the employees’ bank accounts. The ministry of labour must help us, as it promised us this week”, said Fornieri.
“We will have to react very quickly and quickly get in touch with the receiver. We could perhaps be heading towards an unfinished bankruptcy if buyers act in the meantime to transfer the employment contracts to new ones. Because if we really enter a state of bankruptcy, employment contracts and activity cease, and this is a danger for the installation, especially in winter. This would make any possible recovery difficult,” added the deputy general secretary of the LCGB.
Written by Ioanna Schimizzi
Source: paperjam.lu
