Category: Latest Updates

Green flats
Fastmarkets’ weekly assessment of the green steel, domestic, flat-rolled, differential to HRC index, exw Northern Europe was €150-200 ($220-330) per tonne on April 10, flat week on week.

Fastmarkets’ methodology defines European green flat steel as “steel produced with Scope 1, 2 & 3 emissions at a maximum of 0.8 tonnes of CO2 per tonne of steel.”

For steel that falls under such specifications, offers from major European suppliers were stable at premiums of €200-300 per tonne. Offers at the higher end of the range were mainly reported from Nordic-based suppliers.

These offers have been broadly stable in the past months, but tradable premiums for the spot market were lower, sources said.

During the assessment week, minor tonnages were traded at a premium of €200 per tonne in Northern Europe.

The latest transactions for green flat steel were reported in March at premiums of €170-180 per tonne for volumes over 1,000 tonnes, sources said.

Buyer sources told Fastmarkets they estimated that achievable premiums for green steel with that level of emissions would be closer to €100-200 per tonne.

Some bids were even reported at premiums of €70-80 per tonne during the week, but suppliers said that such premiums would be acceptable for steel produced with higher CO2 emissions content.

“[A premium of] €70 per tonne is for steel with an emissions threshold of around 1.5 tonnes of CO2 — some suppliers in Europe offer steel with such emissions exactly at such levels,” a mill source said. “But, for steel [made in electric-arc furnaces (EAFs)] with emissions below 1 tonne of CO2 per 1 tonne of steel, this price is too low.”

A mill source estimated achievable premiums at €150-200 per tonne.

Another mill source estimated achievable premiums at €170-200 per tonne.

Overall, activity in the spot market remains sporadic, while increasingly more buyers are looking to sign long-term agreements with green steel suppliers, expecting higher demand in the years to come.

Notably, Nordic green steel startup Blastr signed a memorandum of understanding with Netherlands-based steel service center Vogten Staal for low-carbon emissions steel supply on Monday April 7.

This is the third offtake agreement announced by Blastr in the past few months, supporting a material increase in the supply of decarbonized steel products in Europe.

But when contacted by Fastmarkets, the company did not specify either the start of the deliveries or the volumes.

Established in 2021 with the aim of becoming an integrated low-CO2 steel producer, Blastr planned to produce around 2.5 million tonnes per year (tpy) of hot- and cold-rolled steel.

Final investment decisions on both a direct-reduced iron (DRI) plant and a steel plant were expected by early 2026.

Vogen Staal has processing lines in Maastricht, the Netherlands. The company has recently invested in a second production facility. When all new lines are installed, the production capacity of both facilities will be well over 1 million tpy.

Green longs
On Wednesday April 9, Fastmarkets launched two new European green long steel prices to reflect emerging market interest in low-carbon material.

Fastmarkets’ inaugural weekly price assessment for green steel, differential to steel reinforcing bar (rebar), domestic, delivered Northern Europe was €20-30 per tonne on April 9.

And the first assessment of the green steel base price, reinforcing bar (rebar), domestic, delivered Northern Europe, inferred was €660-710 per tonne on Wednesday.

The latter price is calculated by adding the weekly green long steel differential to the weekly price for steel rebar, domestic, delivered Northern Europe.

The European long steel industry is predominantly EAF-based, which makes it a priori cleaner in terms of emissions compared with the blast furnace-basic oxygen furnace (BF-BOF) route that prevails in flat steel production.

EAF production typically emits around 0.8 tonnes of carbon emissions per 1 tonne of steel. Therefore, “green” requirements for long steel producers are stricter than in the flat steel sector.

Several sources stressed that, to be green, emissions produced by EAF-based mills within all three scopes should not be above 0.5 tonnes per 1 tonne of steel. As a result, Fastmarkets’ methodology defines European green long steel as “steel produced with Scope 1, 2 & 3 emissions at a maximum of 0.5 tonne of CO2 per tonne of steel.”

In such conditions, long steel producers in Europe are squeezed between stricter criteria for being considered green and limited demand.

“Being an EAF producer is both an advantage and a disadvantage,” a producer from Southern Europe told Fastmarkets. “On one hand, we are already green, but on the other, customers do not see why they have to pay a premium for what they had previously been buying without it.”

Even in Northern Europe, which is pioneering the utilization of green long steel, the demand is said to be limited.

“At this moment, I see no willingness to pay extra for low-carbon steel in the rebar sector — only for specific projects where there is an order qualifier and the options are limited,” a trader from Northern Europe said.

In such conditions, customers are not ready to accept mills’ offers, which vary in the range of €30-50 per tonne, depending on the supplier.

A source on the sellers’ side said that customers accept premiums at the lower end of the range, but sometimes, producers accept lower numbers.

“Charging premiums for longs is very difficult in Europe, as the production nature is already greener than for flats,” a trading source said, providing an assessment of a workable premium at a maximum of €20 per tonne.

Under the European Green Deal, the European Commission has proposed a new EU goal to become a net-zero emitter by 2050.

The steel industry was responsible for around 5% of the CO2 emissions in the EU and 7% globally, according to Commission data.

But alongside the numerous challenges this has created, there were also opportunities for steelmakers to charge premiums for steel with a lower carbon footprint. The uptake of green premiums, however, has been very different in the flat steel and long steel sectors in Europe.

Fastmarkets has taken a closer look into the matter, investigating the new green steel landscape in the region.

Conventional steelmaking in Europe
Around 55% of the steel produced in Europe is created through the integrated blast furnace/basic oxygen furnace (BF-BOF) route. Carbon emissions from this production method amount to around 2.0-2.2 tonnes of CO2 (direct and indirect emissions) per tonne of steel, according to the Commission

Approximately 45% of the steel produced in Europe is made using the electric-arc furnace (EAF) route, but this share was expected to rise to around 57% when the EU shifts toward clean technologies on the way to net-zero emissions by 2050.

In Europe, 79% of carbon steel long products are produced via the EAF route, while 96% of flat products are produced using the BF-BOF route.

But the EU’s ambitious decarbonization goals and the growing cost of carbon emissions under the Emission Trading System (ETS) in the bloc have been stimulating European steelmakers to invest heavily in the decarbonization of their operations, using steelmaking methods that reduce carbon dioxide emissions.

Major suppliers were offering their own steel brands with lower carbon footprints – XCarb, Arvzero, SSAB Zero, Bluemint, Greentec, PureSteel+, Calibria, etc – but there was no common standard for green steel in the industry yet.

Most flat-steel makers use the same approach, intending to replace BF-BOF capacity with EAFs and hydrogen-fuelled direct-reduction iron (DRI) modules.

Consequently, the transition from traditional blast furnace-based steelmaking, widely used for flat steel manufacturing, to so-called “green” and less polluting routes of production has become an integral element in major European steel companies’ strategies.

Using coal-based DRI reduces CO2 emissions by 38% compared with the traditional BF-BOF route. Using a combination of natural gas and hydrogen and carbon monoxide in DRI reduces CO2 emissions by 61% compared with BF-BOF. And using only hydrogen can allow CO2 emissions to be reduced by as much as 97%.

Evolving green flat steel market
Demand for low-emission steels has been growing slowly due to the notably high premiums for such materials and the lack of regulation in the industry, which would stimulate buyers to “go green.”

Fastmarkets’ methodology defines European green flat steel as “steel produced with Scope 1, 2 & 3 emissions at a maximum of 0.8 tonne of CO2 per tonne of steel.” Under that methodology, in June 2023, Fastmarkets launched its inaugural green flat steel assessment.

Fastmarkets’ most recent weekly assessment of the green steel, domestic, flat-rolled, differential to HRC index, exw Northern Europe, was €150-200 ($166-221) per tonne on April 3, unchanged week on week.

European steelmakers have maintained their offer prices for green flat steel at €200-300 per tonne.

But despite slow demand, the room for discounts was quite limited due to the high costs of green steel production, market sources said.

“To produce green steel, we have to buy green energy, and pay for environmental declarations,” a mill source said. “What’s the point of selling [green steel] below cost?”

At the same time, the majority of flat steel production in Europe was still achieved using traditional BF-BOF methods. Major European mills were also offering reduced carbon emission solutions for flat steel products produced via the BF-BOF route with more “digestible premiums” as opposed to “fossil-free” steel produced via the EAF route.

“There are different shades of green in the market,” a mill source said . “Not everyone needs 80-90% decarbonized steel, and not everyone can afford it. For many buyers, a 30-50% reduction in emissions is enough to meet their needs.”

In January 2024, Fastmarkets launched an assessment for a reduced carbon emissions differential paid for flat steel produced in European blast furnaces, with carbon emissions of 1.4-1.8 tonnes of CO2 per tonne of steel.

Fastmarkets’ most recent assessment of the flat steel reduced carbon emissions differential, exw Northern Europe, was €40-60 per tonne on April 3, also stable week on week.

For steel produced in blast furnaces, with reduced carbon emissions of 1.4-1.8 tonnes of CO2 per tonne of steel, offers of premiums were reported at €60-70 per tonne in April, with some limited room for discounts.

Green long steel
In the long steel sector, which mainly uses the EAF route of steel production, the acceptance of premium charges by customers was comparatively more difficult because this method of production was already considered more ecologically sound.

Traditionally, steel produced in EAFs using scrap feedstock produces no more than 0.8 tonne of carbon per tonne of steel.

“Being an EAF producer is both an advantage and a disadvantage,” a producer from Southern Europe told Fastmarkets. “On one hand, we are already green, but on the other, customers do not see why they have to pay a premium for what they had previously been buying without it.”

As a result, the demand for green long steel in the region remained limited and was mainly concentrated in Northern Europe, where the culture of care about the environment is at a high level.

“If you sell green longs in Scandinavia, that is more in their culture,” a producer with mills across Europe said. “Southern Europe is different, [and] most customers are not ready to pay for low carbon emissions.”

Another producer with assets across Europe confirmed that the construction and automotive industries in Northern Europe were the key consumers of green steel in Europe at the moment.

A push from governments was another reason for better demand for green steel in Northern Europe.

“Demand for green [steel] should be stimulated through public procurement, the way it is in Nordic countries. Otherwise, it’s difficult to motivate buyers to pay a higher price,” a buyer in Germany said.

“In Scandinavia, there are many public projects requiring green steel procurement. There is an actual market for green steel,” a mill source in Europe said. “So distributors and trading companies there are more keen to buy green. They know that they can pass the costs [of green steel] down to the end-user.”

To track the development and prices of this emerging market, Fastmarkets has launched two new weekly assessments for green long steel prices, domestic, delivered Northern Europe.

Fastmarkets’ inaugural weekly price assessment for green steel, differential to steel reinforcing bar (rebar), domestic, delivered Northern Europe, was €20-30 per tonne on April 9.

And the first assessment of the green steel base price, reinforcing bar (rebar), domestic, delivered Northern Europe, inferred, was €660-710 per tonne on the same date.

The latter price was calculated by adding the weekly value for the green steel differential to steel reinforcing bar (rebar), domestic, delivered Northern Europe, to the weekly assessment of the price for steel reinforcing bar (rebar), domestic, delivered Northern Europe.

Stricter green criteria
At the same time, the criteria for green steel produced in EAFs have become stricter. According to market sources, 0.5 tonne of CO2 per tonne of steel is the new maximum level for EAF mills, but this is beyond the capabilities of many producers.

“In Poland, emissions are around 0.75-0.8 tonnes of CO2 per tonne of steel because their electricity is generated using coal,” the producer from Southern Europe said.

One of the main ways to cut emissions for EAF-based producers was to use renewable energy such as solar and wind power, or clean energy from nuclear plants or hydrogen.

During discussions with producers across Europe, Fastmarkets learned that, with the help of clean energy, EAF mills can reduce emissions to 0.2-0.4 tonnes of CO2 per tonne of steel, and ask for a $20-50 per tonne premium for that, while some mills did not charge premiums at all.

Nevertheless, if paid at all, the premiums accepted by customers were normally at the lower end of the offer range, while according to some producers they did not compensate for the investments and costs put into the production of such materials.

“Customers are not ready to pay for low emissions while investments are huge. So they are important, but not the priority. There will be demand later, but as of now the market is not ready,” a source with a group that owns production units across Europe said.

For this reason, market sources said, investment in emissions reductions by long steel producers will be realized at a much slower pace than in the flat steel sector.