Celsa Steel UK, Nordic secure new owner
Celsa Steel UK and Celsa Nordic are to be 100% acquired by Sev.en Global Investments following an agreement with Celsa Group announced on Thursday, Kallanish learns.
The acquisition will see Sev.en enter the steel industry and expand its European industry footprint. The company declined to comment on the transaction value.
Alan Svoboda, chief executive of Sev.en Global Investments, says: “We perceive the steel industry as vital for our growth trajectory; therefore, we are thrilled to finalise this landmark agreement. This acquisition fortifies our position on the European market including the entry into the promising Scandinavian markets. Production of green steel also advances Sev.en GI clearly towards sustainability.”
The new investor has not specified its definition of “green” steel.
The acquired mills are electric arc furnace-based producers utilising steel scrap. Celsa Steel UK, recognised as the largest steel recycling company in the UK, is based in Cardiff with a production capacity of 1.2 million tonnes/year of construction steel.
Celsa Nordic operates in Norway, Finland, Sweden, and Denmark. It has a fully integrated production chain encompassing scrap metal collection, processing, and manufacturing of finished steel products for the construction sector, as well as being powered by renewable hydro energy.
“Both facilities are technologically advanced and well-established European leaders in green steel production. We are eager to collaborate closely with both management teams and other stakeholders to further develop these assets and unlock their long-term potential,” Svoboda notes.
“We are constantly on the lookout for new growth opportunities in all our focus industries worldwide. I am happy that the steel industry is now part of our core portfolio,” he adds.
The company investment portfolio spans coal mines in Australia and the US, as well electricity power stations.
Earlier this year, the Celsa Group rejected a bid for its Polish plants, while Emsteel was said to be in talks to acquire the group’s operations.
ArcelorMittal committed to decarbonization investment in Belgium
Earlier this week, numerous reports emerged in Belgium media that ArcelorMittal was planning to only invest in electric-arc furnaces (EAFs) at the site.
“We’ve not said that [the DRI investment is cancelled]. Although there have been have been some reports in the Belgian media [on November 19]… nothing has changed. We’ve been saying all year we are working on the engineering for our European decarbonization projects and that remains the case – no final decisions have been made,” the spokesperson told Fastmarkets.
In September 2021, ArcelorMittal has signed a letter of intent with the Belgian and Flemish governments to support it’s €1.1 ($1.2) billion investment in
decarbonisation at the Ghent site.
The company also announced plans to build a 2.5 million tonne DRI plant and two electric-arc furnaces in Ghent and said the new facilities would operate in parallel with a state-of-the-art blast furnace (BF) that is set to use waste wood and plastics as an alternative to fossil carbon.
Currently, ArcelorMittal Ghent operates BFs with a combined capacity of more than 4 million tpy of pig iron per year, along with a 5 million tpy basic-oxygen furnace (BOF).
The site produces hot-rolled, cold-rolled and galvanized coil.
The company’s plan to switch to DRI/EAF production follows the common approach to decarbonization being taken by Europe’s flat steel producers – to replace BF-BOF capacities with EAFs and hydrogen-fuelled DRI modules.
Possible decoupling of iron and steelmaking in Europe
More than 50 million tonnes of new green steelmaking capacity – using just EAFs or EAFs and DRI – is expected to come online in Europe in 2025-2030.
Moving to THE DRI/EAF production route, however, raises concerns in the European market, however, due to energy-intensive nature of DRIs and the lack of energy infrastructure in Europe to support such a transition.
Europe needs to build out its production of fossil-free electricity to produce green hydrogen to feed future DRI capacities. But the volumes needed for large-scale electrolysis to produce green hydrogen are significant – requiring an additional 400 terawatt hours (TWh) of CO2-free electricity in 2050 – and about seven times the amount of energy purchased by the sector currently, according to estimates from the European steel association, Eurofer.
From 2025 to 2030 renewable electrolyser capacity within the EU is expected to rise to 40 GW, producing up to 10 million tonnes of renewable hydrogen, according to the European Commission.
Using hydrogen with existing DRI modules in Europe is currently too expensive to be competitive, Fastmarkets understands, with hydrogen prices currently seen at around €5-8 per kg. The price of hydrogen needs to be “around €2.5-3.0 per kg to make it commercially viable for steelmaking,” a steel producer in Northern Europe told Fastmarkets.
Around 140,000-150,000 tonnes of hydrogen per year would be required to fuel one 2 million tpy DRI module, sources said.
Some market participants have said that it would, therefore, make sense to split iron and steelmaking in Europe and to import hot-briquetted iron (HBI) and DRI from abroad, such as the Middle East-North Africa region, where HBI/DRI production is more commercially viable.
“Shifting energy-intensive iron production to a resource-rich region would allow Europe to produce green steel with imported HBI/DRI,” an energy producer in Europe said.
Europe is already importing significant tonnages of HBI, with import volumes in 2023 reaching 2.61 million tonnes, according to Global Trade Tracker (GTT).
European Commission to consider changes to CBAM to help exporters
Development of relevant proposals is expected in 2026
The European Commission will explore options to help European industries affected by carbon border adjustment mechanism (CBAM), such as the steel and aluminum sectors. This was announced by the Director-General for Taxation and Customs Affairs of the European Commission Gerasimos Thomas, Bloomberg reports.
According to him, this will take place as part of the revision of the mechanism, which will be held next year. Based on the results of the discussion, the relevant proposals will be formed and presented in 2026. According to the official, the EU will leave no stone unturned to help the bloc’s exporters cope with the side effects of CBAM.
EU exporters complain that their products will become more expensive as emissions costs increase.
As Thomas noted in an interview at the COP29 climate conference in Baku, maintaining the competitiveness of European industry during the energy transition is a key priority of the second term of EC President Ursula von der Leyen. According to him, there are several ideas, and nothing is ruled out. Thomas also added that the EU realizes that the problem will have to be solved earlier than expected.
Previous attempts by European lawmakers to create a mechanism to help EU exporters were rejected because of concerns that it could violate WTO rules. The CBA has already been criticized by the bloc’s trading partners, such as Brazil and China. In addition, Thomas noted, the EU is waiting to see how the new US administration will react to the mechanism.
The United States has been calling for the development of its own CBAM analog: recently, both Democrats and Republicans have put forward relevant proposals.
Toward the end of 2025, the EU will announce what steps in the US and other countries can be considered equivalent to the European mechanism in terms of climate impact. The Director-General for Taxation and Customs Affairs of the European Commission emphasized that the EU will not allow circumvention of regulation, but there will be a system that encourages and incentivizes countries that take measures to minimize the environmental impact of carbon-intensive sectors covered by the CBA.
Source: gmk.center
Węglokoks considers acquisition of pipe producer Rurexpol
The company promises to resume production at Huta Częstochowa in early 2025
Poland’s Węglokoks is considering acquiring pipe producer Rurexpol, which was one of the divisions of the Czestochowa steel mill before it was sold to Alchemia. This is reported by WNP.
In November 2024, Alchemia began the process of liquidating Rurexpol’s branch in Czestochowa due to the expected loss of its ability to compete in the market amid the deteriorating situation in the European steel industry.
“We are considering this potential transaction. When Rurexpol was part of a steel plant, its operating model was cost-effective due to access to resources and sharing of some services. The plant produces interesting products, including drill pipes, and we believe it would be a very interesting business to acquire. However, it is too early to talk about it,” said Tomasz Ślęzak, President of Węglokoks.
As for the Huta Częstochowa steel mill, which Węglokoks has been selected as a tenant, the company’s launch plan is designed to take 45 days. The cold start is scheduled for December 20 this year, with production resuming in January 2025. Maintenance services have already started preparations.
The plant is expected to produce 10 kt of steel in the first month of operation and double this in the second month. In addition, salary payments to employees have already begun.
Węglokoks also notes that it is interested in acquiring Huta Częstochowa, as it “fits into the company’s operational logic” and will reduce dependence on raw material suppliers.
“The big advantage of the plant’s foundry facilities is that they can cast billets and slabs. We can supply raw materials to the plate mill in Batory and to Huta Łabędy,” explained Tomasz Ślęzak.
Jarosław Guptysz, Production Director of Huta Częstochowa, believes that there are no threats to the implementation of the estimated 45-day launch plan for Huta Częstochowa.
On November 19, Węglokoks signed a lease agreement for the Czestochowa steel plant with the company’s insolvency administrator. To fulfill the agreement, Huta Częstochowa sp. z o.o. was established to take over the employer’s obligations to the bankrupt plant’s employees and will be responsible for restoring its operations.
Source: gmk.center
Thyssenkrupp CEO Miguel Angel López downplays the prospects of renewable energy in Germany
Thyssenkrupp AG chief executive Miguel Angel López has dismissed German government efforts to promote solar and wind power in the country as uneconomical.
“I have not seen any plan that facilitates green electricity in central Europe at competitive costs,” he said in an interview with weekly magazine Focus. Competitive green energy would only be possible on the Iberian peninsula and Scandinavia, where costs would always be lower than in Germany, he added.
“My point is pure mathematics. If you compare the costs in Scandinavia, the Iberian Peninsula, or the USA with those here, and extrapolate them into the future, the result will always be the same,” he is quoted as saying. Billions in public subsidies for solar and wind energy is therefore wasted money, he argues. Solar power will not pay off in Germany, while wind power does not have sufficient available surface area to be rolled out, he added.
The interview appeared prior to the group’s annual press conference on Tuesday, but the topic was not broached then by executives. However, one critical commentator questioned whether Iberian and Scandinavian green energy would be made available to other countries in sufficient volumes. “They might need it for their own projects,” Kallanish heard him say from the conference floor.
In the interview, López made a stand for the strength of Germany’s manufacturing industries, and warned that de-industrialisation has already begun. He rejects public subsidies to strengthen local industry, and instead favours financial incentives that have been successful in other countries. As an example, he cites London, which created attractive jobs by granting temporary tax reductions for wealthy tax payers willing to move to the UK.
Christian Koehl Germany
Decarbonisation adds to ‘fragile’ EU market facing overcapacity
The “fragile” European steel market is facing a crisis more severe than the financial downturn, with margins shrinking amid growing overcapacity at a time when steelmakers are needing to fund decarbonisation plans, Kallanish learns from a recent webinar.
The webinar, organised by Eurofer and hosted by Euractiv, heard panellists urgently calling for the European Commission to take action to support the sector, which has become uncompetitive amid high energy costs and large investments required to decarbonise.
Mario Arvedi Caldonazzo, vice-president of Eurofer, and chief executive of Arvedi, said: “The European steel industry is experiencing the most severe crisis since the 2009 financial and economic downturn. It is a real existential issue now.”
Caldonazzo pointed to the spillover effects of overcapacity in China into other markets, from where imports into Europe have now surged.
“We can’t compete against the Chinese state, because the Chinese steel industry is basically state owned and is completely subsidised by the central government; this is [an] unfair practice, and we have to react immediately,” he said.
“Europe lacks competitiveness. The high energy costs, the lack of raw materials such as scrap, which is the critical and strategic raw material for guaranteed transformation, conversion for our steel industry,” he added. “On both issues, energy and raw materials, the Commission has to intervene.”
Overcapacity was also noted by Giorgio Gori, MEP and vice-chair of the ITRE Committee. “The overcapacity is a huge threat to the survival of the European steel industry and requires appropriate measures to protect our production,” he observed. He also cited the significantly higher cost of energy than competitors, the difficult access to raw materials and the lack of public investment.
The industry move towards decarbonisation was also putting additional pressure on the European market.
“We added to a fragile situation which is now speeding up the problem. We added a market intervention which is unseen before when we said we want to decarbonise the steel industry in a decade,” said Christian Ehler, MEP and member of the ITRE Committee.
Caldonazzo also noted that public grants were difficult to access for decarbonising European companies despite support being announced as part of the Green Deal in 2019. He added that if decarbonisation is the priority for the EU, then companies need market defence, with the high costs of green steelmaking making the market uncompetitive.
Meanwhile, Judith Kirton-Darling, general secretary of IndustriAll, said of the European steel industry: “This house is on fire and unless we bring in the fire brigade right now the house will burn down.”
She called for action “at pace” and noted the danger of deindustrialisation and the geopolitical consequences of losing the strategic steel industry as a key energy transition material.
“We really need the new Commission to arrive running on the defence of this strategic industry,” she said. “We can’t wait any longer.”
“We are now in the real danger zone where if political decisions are not being taken right now, we risk major investment decisions going elsewhere in the world,” she added.
Kirton-Darling also pointed to the lack of an industrial policy attached to the targets set by the Green Deal. “You can’t have a target without an industrial strategy of how you reach the target.” However, she did see a way forward through the steel action plan. “The elements are there on the table. There is a question of sequencing. We need all the parts of the action plan on the table to have coherence,” she said.
Gori noted that the Commission needs to help create a green steel market and put forward the demand through public procurement and incentivise its use. Kirton-Darling also echoed this, stressing that from day one for the new commission, things like public procurement “are really low hanging fruit”.
Carrie Bone UK
Spanish auto industry recovers in October
Spain’s car industry began to recover in October after three months of poor performance, Kallanish notes.
According to the country’s automotive association, Asociación Nacional de Fabricantes de Automóviles y Camiones (Anfac), output in October was 227,850 units, compared to 205,418 vehicles in September. This volume was 2.2% more than in the same month in 2023. Of the total, 74.5% were gasoline and diesel-powered automobiles.
Ten-month production amounted to 2.02 million units, a decrease of 1.2% compared to January-October last year.
“Although vehicle production remains stable and we could have similar [annual] levels as last year, if the upward trend continues in the next two months, we are concerned about the drop in the production of electrified vehicles,” says Anfac general director José López-Tafall. “This must see immediate measures to boost sales of EVs. If there is no demand, there is no production.”
Spanish vehicle exports rose in October. Shipments were 200,363 units, compared to 185,327 units in the previous month and 1.2% more than a year ago.
European markets had a 94.1% share in Spanish deliveries in October, 1.4 percentage points more on-month and 5.4pp higher on-year. Ten-month exports slipped 2.4% over the same period in 2023 to 1.79 million vehicles, Anfac data show.
Todor Kirkov Bulgaria
TK Materials fares better in USA than Europe
The distribution unit of thyssenkrup AG, thyssenkrupp Materials Services, saw order intake and revenue decline significantly in the fiscal year from October 2023 to September 2024, the company says in its annual report.
Lower prices in its key product groups and declining demand affected its European trading and service centre units, in particular, whereas the corresponding North American units posted smaller decreases, it says.
Due to the difficult market situation, especially in Germany, consolidated shipments decreased to 8.2 million tonnes, down 8.4% on the prior year. Order intake fell 11% to €12.1 billion ($12.8 billion).
The group notes it achieved higher earnings in its international supply chain business, which led to an increase in adjusted Ebit by 15% to €204 million. At the firm’s annual press conference in Essen on Tuesday, attended by Kallanish, executives said the Materials Services unit will expand its “Materials as a Service” approach. “We are developing from a mere materials distributor to an international supply chain manager,” observed thyssenkrupp chief executive Miguel Angel Lopez.
Tk Materials invested particularly in North American growth projects, with new service centres in Mexico and the USA, and in processing equipment in both North America and Europe to increase vertical integration.
Christian Koehl Germany
Thyssenkrupp faces ‘year of transition’
Thyssenkrupp does “not expect any tailwinds” from the markets in its 2024/25 business year, which started on 1 October, as the macro-economic environment will remain difficult, company executives said during the firm’s annual press conference.
Thyssenkrupp AG, which comprises tk Steel Europe, tk Materials Services Maritime Systems, Automotive Technology, and Decarbon Technologies, saw order intake fall to €32.8 billion ($34.7 billion) in its fiscal year through September 2024, from €37.1 billion a year earlier. This was mainly attributable to weaker demand and lower prices at tk Materials Services and tk Steel Europe, Kallanish heard during Tuesday’s conference in Essen.
The group’s net loss narrowed to €1.4 billion from €2 billion loss the prior year. The loss was on account of costs related to extensive transformation measures and asset impairments totalling some €1.2 billion, of which €1 billion were incurred at tk Steel Europe.
“In financial terms, the fiscal year 2024/25 will be a year of transition, and one of decisions,” chief executive Miguel Angel Lopez said at the conference. He expects the firm to return to profit of between €100m and €500m next year.
Among other things, the group is in the process of selling a 50% stake in its tk Steel division to Czech group EPCG, which has already acquired 20%. Finance chief Jens Schulte noted that talks with EPCG are proceeding positively, meaning thyssenkrupp will not need a plan B to fall back on, as things stand (see separate story).
Christian Koehl Germany
EU steel transformation, renewables need government intervention: report
Government funding remains a key factor in the feasibility not only of low-carbon steel projects in Europe, but also the expansion of renewables to support them, Kallanish learns from a new report.
The report by Reuters Events notes that decarbonisation technologies such as green hydrogen and direct reduced iron are yet to be widely deployed and require massive investments to build out new infrastructure and reach industrial-scale capacities.
Despite 60 low-carbon steel projects underway, the pace of growth will depend on the availability of affordable renewable energy to power EAFs and produce green hydrogen. These projects will double electricity consumption in the EU steel industry to around 75 Terawatt Hours/year and require an additional 90 TWh of renewable energy to produce green hydrogen via water electrolysis.
These projects will require total capital expenditure of around €30 billion ($33.1 billion) and finding the funds will be a huge challenge, says Adolfo Aiello, deputy director general at Eurofer.
Additional funding is needed amid falling revenues and low production rates in recent years, as well as high costs and strong competition from foreign rivals.
“Once they have installed their first DRI, and if everything goes smoothly at a technical level, economic level and energy level, companies would continue replacing their blast furnaces with additional DRIs,” Aiello notes.
However, further regulatory intervention is required to reduce electricity prices, accelerate green hydrogen infrastructure construction and increase demand for decarbonised steel among lead end-user sectors, he adds.
The report notes a lack of grid connection points for new solar and wind farms as a key barrier to renewable energy growth. Slow approvals is a key issue globally, increasing project costs. A new EU renewable energy directive, the grid action plan, requires member states to streamline permitting procedures. This will require around €584 billion of investments by 2030, it says.
Thyssenkrupp Steel says the main challenge for its planned DRI plant will be securing green hydrogen and renewable energy at competitive prices. It has been granted €2 billion by the EU, while Thyssenkrupp will invest €1 billion.
Prices are high because the necessary infrastructure to produce, transport, and store green hydrogen across EU borders has not yet been built, a Thyssenkrupp spokesperson observes.
The enormous investments required to install green steelmaking technology and convert integrated sites mean that governments must support the cost, the company adds.
Time is of the essence because it can take up to six years to convert old natural gas storage facilities, so that they can store hydrogen, and ten years to build new ones.
Policymakers must also implement measures that support the creation of green lead markets, such as quotas for certain products or as part of public procurement, the steelmaker asserts.
This aligns with a recent policy paper by SteelZero seeking enhanced government led procurement.
The report notes that decarbonising Europe’s heavy industries will depend on whether the EU can meet its goal of producing 10 million tonnes/year of renewable hydrogen and importing a further 10m t/y by 2030.
Independent auditors consider these targets unrealistic, largely due to a lack of funding.
Oleksiy Tatarenko, lead hydrogen analyst at RMI, notes the hydrogen industry has flagged that subsidy packages in the EU are underfunded and too slow to help accelerate project investment decisions.
Steelmakers located away from ports could import green iron from outside the EU and transport to site via conventional methods such as rail, which will be “easier to accomplish than new pipelines for hydrogen”, notes Rachel Wilmoth, senior steel analyst at RMI.
“Some steelmakers see importing green iron as an important first step to decarbonising steel production in Europe in a cost-effective way, while also keeping the current steelmaking expertise and jobs in place,” she concludes.
Carrie Bone UK