Metso builds DRI smelting furnace pilot facility
Metso says it is investing €8 million ($8.7m) to build a “state-of-the-art” direct reduced iron smelting furnace pilot facility, in Pori, Finland. This will allow customer-specific pilot-scale testing to demonstrate the applicability and results of industrial-scale DRI smelting with Metso’s Outotec DRI Smelting Furnace technology.
“There has been a lot of interest towards the recently launched Metso’s ‘Outotec’ DRI Smelting Furnace. It substitutes traditional blast furnaces used in iron and steel making, and enables a significant reduction of emissions, when combined with a direct reduction plant,” Metso vice president, smelting Jyrki Makkonen says in a note sent to Kallanish.
“The investment into the DRI Smelting Furnace pilot facility supports the rapidly increasing customer demand for reliable testing when planning a transition to emissions-free smelting. With the pilot facility, we can reliably test various types of customer materials for industrial scale-up,” notes Metso director, smelting research & development Mari Lindgren.
Construction of the facility has started, with first tests and campaigns scheduled in the latter part of 2024.
The new high-capacity Outotec DRI Smelting Furnace, launched in 2022, is one of Metso’s breakthrough technologies. Combined with a direct reduction plant, it substitutes traditional blast furnaces in the production of hot metal, reducing CO2 emissions with minimal changes to the rest of the steel plant. The furnace can be integrated with Metso’s hydrogen-based “Circored” process or other direct reduction processes.
Adam Smith Poland
Bremen, EWE go for more hydrogen cooperation
ArcelorMittal Bremen and northern German energy service provider EWE want to jointly implement further hydrogen projects, they say in a statement sent to Kallanish.
In April 2023, ArcelorMittal Bremen, EWE and its subsidiary utility SWB (Stadtwerke Bremen) laid the foundation stone for the construction of a 10-megawatt hydrogen production plant in Bremen. The electrolysis plant will form the basis for green steel production in northwest Germany. It is due to go into operation this year.
The two companies have now signed a letter of intent to supply green hydrogen in large quantities to significantly reduce CO2 emissions from steel production. Green hydrogen from a 320-megawatt production plant in Emden is expected to be supplied to Bremen from 2028, EWE says.
EWE plans to build up to 400 megawatts of electrolysis capacity at locations near the German North Sea coast. Up to 40,000 tonnes/year of green hydrogen are projected to be produced, depending on the sales market, EWE says. There is also the possibility of expanding production capacity to gigawatt scale in line with demand, it notes.
The hydrogen from the EWE plants is to be transported via hydrogen pipelines, which are being built as part of the large-scale “Clean Hydrogen Coastline” project, as well as the planned “HyPerLink” project.
Christian Koehl Germany
Feralpi considers investing in hydrogen for German plant
Italian steelmaker Feralpi is assessing replacing gas with green hydrogen to decarbonise the steelmaking process at its Feralpi Stahl facility in Riesa, Germany, a source close to the company tells Kallanish.
In an interview with Italian media outlet Industria Italiana, Feralpi managing director Giovanni Pasini said the project may become operational in 2027. Renewable energy plants need to be built to feed the electrolysers, as does the infrastructure required to operate a green hydrogen production plant.
While the company is boosting its renewable capacities in Italy, it is focusing on accelerating hydrogen use in Germany where the uptake of the green gas is expected to occur much faster. “Germany is investing much more than Italy in hydrogen but it also has some traits that make hydrogen more attractive … The north of Germany has several wind farms. It intends to build several offshore wind power capacities and this will allow Germany to have several hours [of wind energy generation], many more than today, resulting in negative prices of energy. Using renewable energy at a negative price can be a challenge that allows hydrogen to be extremely competitive,” Pasini says.
Feralpi Group is further expanding investments to decarbonise steel production at its sites in Italy and Germany. The company aims to cut a further 275,000 tonnes/year of CO2 emissions from its Scope 1 and Scope 2 emissions by 2027.
During the 2023-2027 period, Feralpi is investing €131 million ($142m) in industrial processes in Italy, €233m in Germany and an additional €200m across both countries aimed at developing renewable energy production. Feralpi Stahl and eastern Germany’s largest municipal utility, SachsenEnergie, want to jointly build a 150-megawatt solar park in the Zeithainer district of Jacobsthal. This will provide renewable energy for steelmaking. Energy supplier Stadtwerke Riesa will also support the project (see Kallanish passim).
Feralpi in Germany is located in the industrial area of Meissen, a cluster that uses large quantities of energy.
Natalia Capra France
ADI prepares for life after ArcelorMittal
The Italian government has issued a decree clearing the way for the implementation in future of an “extraordinary administration” to prepare for the departure of its private partner in Acciaierie d’Italia (ADI), ArcelorMittal.
According to sources close to the matter, this follows a meeting between Italian Prime Minister Giorgia Meloni and the ministers involved in saving the troubled steelmaker.
The decree also guarantees production continuity and employment at Acciaierie d’Italia, a joint venture between state company Invitalia and ArcelorMittal, formerly known as Ilva.
“The Council of Ministers has approved a law decree which strengthens some measures already present in the legal system, to protect the production and employment continuity of companies in crisis, including the former Ilva, and provides guarantees of extraordinary layoffs during any extraordinary administration,” states the decree document obtained by Kallanish.
The government is looking for a partner to replace ArcelorMittal in the ADI JV, after the steelmaking group refused to inject any more cash into the troubled steelmaker. Authorities have solicited Italian steel companies.
Natalia Capra France
CRC, HDG strengthen in northwest Europe
Northwest European mills have held prices for cold rolled and hot-dip galvanized coil steady, although the target value of €900/tonne ($976) plus seems way out of sight.
Mills are maintaining pricing discipline, helped by recent outages at blast furnaces, but the weak demand on the market will not allow for clear increases. In fact, now that ArcelorMittal Belgium, Tata Ijmuiden and Salzgitter are restarting their furnaces, increased supply might stop the gentle upward movement.
Buyers in the Benelux and Germany see prices at between €830 and €870, with CRC slightly lower than HDG. One Dutch manager, however, tells of offers for HDG below that of CRC, but could not explain this effect. His observation has not been confirmed by others, although players offered several theories for such a scenario.
“It could well happen if, for example, carmakers do not call off HDG volumes reserved for them, which makes that oversupply available,” a buyer of a German processor says. Along the same lines, “there may have been too much production at some galvanizing lines, meaning mills were forced to sell off,” another German source says.
According to a manager at an automotive supplier, “cold-rolling capacities were reduced notably when mills cut back on production. That could cause such an effect temporarily,” he tells Kallanish.
Another Dutch source does not consider the observation very representative. “Especially for CRC, import offers are attractive, so that mills here won’t be able to push their prices too far up,” he says. According to Swiss and German sources, imported CRC starts at €750/t cif Antwerp, for delivery in May-June.
However, import prices are likely to rise as vessels increasingly avoid the Suez Canal/Red Sea route. This means longer freight duration at higher costs around the Cape of Good Hope, and, as one manager points out, higher insurance rates.
Christian Koehl Germany
Italian distributors expect market to improve in 2024
Italian steel trade association Assofermet expects an improvement in 2024 sales and earnings for the local distribution sector thanks to a general positive macroeconomic outlook.
The beginning of this year however is not seen bringing particularly positive changes as consumption is forecast to remain in line with the last months of 2023.
“The improvement in global economies and the end of interest rate hike policies are some of the elements that are driving the positive forecast for the evolution of the market … If it’s true that 2023 was worse than 2022, it is however also true that the results exceeded the pessimistic expectations of 12 months ago,” the association says in its market report sent to Kallanish.
Price reduction was the main trend in 2023 for those involved in the trade and distribution of steel. The bulk of the decline occurred from the second quarter, while during the last three months, the market returned to a stabilisation in prices.
Last year was marked by uncertainty and lower margins for distributors, lower on-year revenue and weaker downstream consumption which caused the drop in prices. The import ban on Russian steel and increase in interest rates in Europe have contributed to generating an excess of supply in the entire EU, Assofermet states.
A similar situation of lack of stability, volume reduction and weaker demand was registered in 2023 in the scrap market, for which the association also forecasts an improvement this year. It points out that besides international and geopolitical issues, the Italian steel market has been strongly impacted by the crisis in the manufacturing industry in Germany, one of the main outlet markets for Italian steel companies.
Natalia Capra France
Celsa’s new chief takes office amid worker mistrust
Jordi Cazorla Pujalte started his role as Celsa Group chief executive on Monday, Kallanish learns from the company. He replaces Francesc Rubiralta who left the steelmaker after a group of investment funds, representing the main creditors of the company, took control of Celsa last November.
Deutsche Bank, SVP, Cross Ocean, Anchorage, Golden Tree, Attestor, Goldman Sachs, Sculptor and Capital Group are among the banks and funds included in the new ownership group.
“Celsa’s current financial situation will allow, by introducing the best market practices, to take the necessary operational measures to position the company as one of the major steel companies at national and international level, committed to the production of recycled green steel,” says Cazorla.
The ceo’s first meeting was with Celsa workers’ representatives on Monday. They asked Cazorla to provide details about the new owners’ industrial and investments plan and how they will ensure jobs. “There is a climate of mistrust towards the management, because it tried to force a restructuring without any negotiation with personnel,” the CC.OO. union says in a note.
Workers have already begun voting on whether to go on strike or approve the proposed plan, the union confirms. They are also pushing the new owners of Celsa to confirm which Spanish companies are in talks to acquire the remaining 20% stake in the group, as agreed in the court-approved restructuring plan. The deadline to find the industrial partner is reported to have been set for mid-2024.
Todor Kirkov Bulgaria
Kirchhoff Automotive, H2 Green Steel sign low-carbon steel delivery offtake deal
Kirchhoff Automotive signed a seven-year agreement with H2 Green Steel for the delivery of low carbon steel to decarbonize its supply chain, the two companies announced Jan. 16.
“The message from our customers is clear, they want to see products with lower CO2 footprint,” said Michael Rank, global executive vice president of procurement at Kirchhoff Automotive.
“This matches our ambitions to be in the forefront of sustainable development in the industry, as well as our legacy where sustainability has always been important.”
The deliveries of green steel to Kirchhoff Automotive’s plants across Europe from H2 Green Steel’s Boden plant will start in 2027. The offtake agreement is reported to be worth Eur130 million, but the two companies did not disclose the tonnages volume.
The two companies will also work together on a circularity initiative where the aim is to send at least 30% of the steel scrap volume back to H2 Green Steel’s electric arc furnaces in Boden for recycling.
For Kirchhoff Automotive, 50% of its supply chain is steel, of which 90% of its carbon footprint is currently determined by the use of conventionally produced steel and aluminum.
In 2022, Kirchhoff Automotive started locating the greenhouse gas emissions in its supply chain (Scope 3), both upstream at suppliers and downstream at customers.
Author Annalisa Villa, annalisa.villa@
Spanish rebar prices rise, construction activity seen improving
Spanish rebar market prices are continuing to rise since December. The construction sector is showing signs of improvement and is expected to increase demand for long products in the first quarter, Kallanish understands.
“The improvement in longs consumption will be moderate since the industry uses the last quarter of 2023 as a reference, when activity and investment remained stagnant,” a Valencia region construction company comments. “Demand growth will not materialise in the way that we expected, but there are already positive signs coming from both private and public construction for stable long steel purchases in Q1 in most of the southern regions.”
Meanwhile, some companies in northern Spain believe the government’s decision-making for industry development and large infrastructure investment has been greatly delayed.
“There remain many unknowns regarding how the commitments that the new administration has made to secure constitutional support, especially from the Catalan nationalists, will affect the sector in general, and this keeps most of the industry indecisive to advance new projects,” a local source observes.
Rebar suppliers say their order books are gradually increasing. “Values are moving up since December in line with the international market. The new levels seem stable and I don’t think they will vary much for the rest of the month. The market situation does not yet allow us to increase our sales margins as we would like, but they are still better than a month ago,” a market participant observes.
16mm material is currently being offered at €390-395/tonne ($424.7-430.1/t) base. Including €262/t size extras and loading expenses, transaction values are at €652-657/t ex-works. Some offers have also been heard at €660/t delivered.
Meanwhile, the price of 6mm mesh with 150x150mm dimensions stands at €179/square meter delivered. The other largely sold quality, 8mm, is offered at €302/m2 on the same basis.
The monthly index for Spanish domestic rebar prices (B-500 SD 12 meter/12mm) increased in December compared to that in the previous month, according to data published by the Spanish Chamber of Commerce. The index stood at 170.62, up 2.53% over November. However, it was 7.9% weaker year-on-year. The index is based on a value of 100 in 2014.
Todor Kirkov Bulgaria
Vestas to use ArcelorMittal’s low carbon-emissions steel for wind turbines
Wind turbine maker Vestas is to use ArcelorMittal’s low carbon emission steel for its wind turbines for the Baltic Power offshore wind farm in Poland, the two companies said Jan. 16.
The steel is produced using 100% steel scrap melted in an electric arc furnace powered by 100% wind energy at the ArcelorMittal steel mill, Industeel Charleroi, in Belgium, Europe’s largest steel producer said.
The steel slabs are then transformed into heavy plates used to make wind turbine towers at ArcelorMittal’s heavy plate mill in Gijon, Spain. The steel of the heavy plate has also the EDP certification, the Environmental Product declaration that it is certificated by an independent party, detailing the complete environmental footprint of the product.
By using low carbon-emissions steel in the top two sections of an offshore tower, emissions will be 25% lower than for a tower made from steel produced via conventional steelmaking. For an entire onshore tower, the CO2 reduction is at least 52%.
Overall, steel constitutes 80%-90% of of the material needed for a wind turbine, meaning Vestas could see a 66% decrease in emission intensity per kg steel.
During 2025, Vestas will start the construction of the offshore wind farm, expected to generate up to up to 1.2 GW and ultimately supply clean electricity to more than 1.5 million households in Poland. Vestas will supply, install, and commission 76 wind turbines for the Baltic Power project, of which around 52 will be made with low carbon-emissions steel.
The Baltic Power offshore wind farm, a joint project of ORLEN Group and Northland Power, will be the first in the world to be built using Low-emission steel produced almost entirely from recycled raw material in an electric arc furnace powered by renewable energy. The use of this material will reduce the turbine’s life cycle carbon footprint by 10%.
Energy transition is gaining momentum in Central Europe and the Baltic Power wind farm is its landmark. Once it becomes operational in 2026, an additional almost 1.2 GW of capacity will be added to the Polish energy system, providing about 3% of the country’s total electricity demand.
In the following years, an additional 5.2 GW will be added, thanks to the construction of further wind farms in 5 new ORLEN Group concessions in the Baltic Sea.
“Being the largest investment in renewable sources in this part of Europe, our project is setting new benchmarks,” Jaroslaw Broda, CEO Baltic Power, said. “The use of low-emission steel from Vestas and ArcelorMittal in our wind farm underscores our commitment to innovation and environmental stewardship. We are proud to lead the way in transforming Poland’s energy landscape as we progress towards completing the construction by 2026.”
Author Annalisa Villa, annalisa.villa@