SSAB starts construction of EAF at Oxelösund
SSAB has started construction work on an electric arc furnace at its plant in Oxelösund, which will be carried out by SMS group, Kallanish learns from the Swedish steelmaker. It highlights the event, attended by Swedish Prime Minister Ulf Kristersson, as a historic milestone for the Swedish industry and for the green transformation to fossil-free steelmaking.
SSAB earlier took a decision to transform its entire Nordic production system by around 2030, and this year took a decision to invest SEK 6.2 billion ($599 million) in an EAF and related raw material handling.
SMS’s scope of supply includes a 190-tonne alternate current-electric arc furnace (AC-EAF) capable of processing various raw materials, including fossil-free direct reduced iron or hot-briquetted iron, and scrap.
This includes automated features such as the slag handling and eccentric bottom tapping (EBT) operations. Also part of the supply is advanced electrode control X-Pact SynReg, which, together with advanced robotics applications, such as the X-Pact Sampler, ensures operational safety as well as better precision and productivity without human intervention, SMS explains. With an upper shell diameter of 9.3 metres, the new EAF is one of the largest installations in the world for similar applications, it adds.
“We are now embarking on the large-scale construction and transformation of SSAB’s Nordic production system,” says SSAB president Martin Lindqvist. “The conversion to an EAF will mean that Oxelösund alone can deliver a reduction of around 3% in Sweden’s CO2 emissions,” says SSAB Special Steels head Johnny Sjöström.
Christian Koehl Germany
Sarralle to build ArcelorMittal’s new EAF in Spain
ArcelorMittal has contracted Spanish technology supplier Sarralle Group to build a new electric arc furnace at the Gijón works. The project is part of the steelmaker’s decarbonisation plan in Spain and will substitute one of its blast furnaces in Asturias, Kallanish notes.
Construction works will start early next year. The facility is expected to commission in the fourth quarter of 2025, ArcelorMittal confirms. As part of the project, Sarralle will also install a dust collection system as well as a waste heat recovery system to maximise the EAF’s energy efficiency.
The furnace will have an annual capacity to produce 1.1 million tonnes of low-emission steel. Output will be mainly destined to long products consuming sectors such as rail transport. The investment will place the plant in a highly competitive position, particularly in sectors with strict carbon footprint criteria for public administration contracts, the steelmaker observes.
“This investment will allow us to produce high value-added rod and wire rod, consolidating a sustainable future for our activity, with a process that incorporates the highest safety standards,” comments ArcelorMittal Spain Long Products chief executive Jordi Torné.
According to Sarralle’s ceo, Elias Gonzalez, this is a very special contract for the technology firm since it is the first decarbonisation project in Spain to be carried out using Spanish technology. “It is an extremely important step for the future of the steel industry in our country, oriented towards very high added-value products,” the executive notes.
Todor Kirkov Bulgaria
Czech steelmaker Liberty Ostrava receives protection order to restart blast furnace
Czech steelmaker Liberty Steel Ostrava has been awarded court protection against action from one of its main creditors while it seeks to restructure, a spokesperson for the company said Nov. 30.
“Liberty Ostrava can confirm that a specific creditor moratorium against its main energy supplier was granted yesterday morning. This will allow the business to finalize and execute its restructuring plan, which will involve the restart of blast furnace number three and the ramping up of the steelworks which aims to ensure the business is positioned for long-term success for the benefit of its employees, creditors, and stakeholders,” the spokesperson said, without giving further details. “The moratorium will allow the steelmaker to negotiate more favorable power prices and does not affect the day to day running of the company,” the spokesperson said.
Liberty Steel Ostrava is part of the multinational GFG Alliance.
As part of the moratorium procedures at the Ostrava court, Liberty Steel Ostrava had to prove it is solvent and that the overall business is viable and could be restructured without insolvency procedures, the spokesperson added.
Liberty Steel Ostrava previously announced that it had “hot idled” its only operating blast furnace from Oct. 23 due to a Europe-wide downturn in demand. The furnace was originally expected to re-start after two weeks but the spokesperson announced in a Nov. 15 email that its resumption would depend on finalizing a “sustainable operating model for the [Liberty Steel Ostrava] business.”
The main union at Liberty Steel Ostravo, Kovo, warned Oct. 17 that the steelmaker’s management and owner want to operate the furnace in a “stop start mode” responding to demand. When uneconomic, the blast furnace could be idled with steel products bought in from outside for further processing at the rolling mills and other facilities, it added. The union said such a strategy made little sense for an integrated steelmaker also operating a coke plant, steel plant, rolling mill and Liberty Engineering Products Ostrava (Lepo) subsidiary.
Liberty Ostrava is the Czech Republic’s biggest steelmaker with annual production capacity of around 2.0 million mt. It produces rolled products, tubes, and flat products with main customers in the construction, engineering, and oil and gas sectors.
Author: Chris Johnstone
H2Green steel on schedule to produce low-carbon steel by early 2026
H2 Green Steel is on schedule to produce its first low-carbon steel made using hydrogen by the end of 2025 or the beginning 2026, before ramping up output, in a process that could cut carbon dioxide emissions by 95%, the company’s Chief Financial Officer Joel Ridderstrom told S&P Global Commodity Insights on the sidelines of the Resourcing Tomorrow Conference in London this week.
The global steel industry is one of the world’s largest emitters of CO2, representing approximately 7-8% of global emissions.
H2 Green Steel’s project, located in the Boden-Lulea region in northern Sweden, includes a giga-scale green hydrogen plant as an integrated part of the steel production facility.
Use of hydrogen rather than coal in the production of steel represents one of the main routes for the industry to reduce its CO2 emissions, with H2 Green Steel pioneering the technology in Europe.
“In northern Sweden we really rely on the hydropower backbone. So Sweden and Norway, the northern parts of those countries, it’s really now a natural resource comparable to oil. It’s just a massive battery that exists in those locations. So I mean, there’s no coincidence that we’re located in the Arctic Circle,” Ridderstrom said during the conference, adding that not only will this lower the costs of hydrogen production, but it will also eliminate intermittent power.
“You have the power available and you have the hydropower backbone to support continuous production,” he said.
During a panel discussion at the event, industry participants agreed that the industry is moving away from a reliance on fossil fuels, but they underlined the expense of this.
According to CRU analyst Paul Butterwork, constructing a hydrogen direct reduced iron facility would cost around $1.3 billion, compared with about $800-850 million for a more traditional blast furnace with its own power station, or $400-420 million for an electric arc furnace with its own power station.
“So that’s a big, big shift,” he added.
Ridderstrom agreed that low-carbon steel adds a cost premium, putting this at around Eur150/mt, but said that the industry is already evolving.
He added that companies including carmakers, white goods manufacturers and constructors are already closing offtake supply agreements to secure low carbon production.
Demand for low carbon steel is increasing. Platts, part of S&P Global, launched its own low steel carbon assessments in May this year.
Platts assessed Northwest European hot-rolled carbon-accounted coil up Eur5/mt on the day at Eur770/mt ($840.147/mt) ex-works Ruhr Nov. 30.
The assessment was calculated in line with the sum of the Platts daily carbon-accounted steel premium (CASP) assessment and Platts daily hot-rolled coil price assessment in Northwest Europe.
Author: Annalisa Villa
EU steel-using sector output detaches from consumption
The thesis was delivered by Roland Döhrn, professor of economics at the University of Duisburg-Essen, in a presentation on Thursday at distributors association EUROMETAL’s Steel Trade Day in Düsseldorf.
Döhrn compared the relation between steel consumption and production by steel users as it used to be before 2021, and how it has developed since. According to his findings, the relationship was relatively stable from 2014 and 2021, with minor deviations that were balanced over time. But “after 2021, this correlation disappears; we see increasing production at steel users but decreasing steel consumption by them,” Kallanish heard Döhrn say at the event.
He referred to the EUROMETAL meeting in Porto last spring, where this observation was discussed among participants, but without a clear clue on the cause. “We were wondering if it has to do with stock cycle, and had other ideas, but did not find an answer,” Döhrn said.
For one thing, it could have to do with production patterns: lightweighting efforts would result in lower steel intake, as would a change of materials for certain parts. In construction, the share of existing property refurbishment may have gone up versus new building, which primarily needs steel. Import patterns, too, will play a role. Steel users seem to be increasingly importing finished parts and components from overseas.
If Döhrn’s observations indicate a trend, “the future production of steel users will be less reflected in the steel market,” he concluded.
Christian Koehl Germany
German road toll weighs on rebar players
Germany is seeing truck toll rates increase from 1 December, which is worrying downstream players in the rebar market, which typically has short-haul delivery routes.
According to a manager at a cut-and-bend group, the higher rates will result in the doubling of road fees, which could mean at least €20 ($22) extra for a conventional truck load. The increase is being introduced as a compensation for CO2 emissions, but does not take into account the environmental performance of different vehicle models, he remarks, critically.
“New models are usually exempt when such fees become stricter, but not this time,” he says.
This comes “at the worst time,” as the rebar business is already suspended in a flat-out construction market, he tells Kallanish. “Builders keep holding back orders from benders. They make inquiries, but then prefer to wait for more price discounts, and this just drags on. But we benders cannot go lower; intake prices and sales prices are already totally out of proportion.”
A buyer at a hardware store confirms the mismatch of prices upstream and downstream. Mills last month lifted prices, “but nobody will pay them because our sales prices would not bring the cash back,” he notes. He confirms one purchase he made to fill a short-notice order, at the elevated base price of €350/tonne ($384), translating to €615/t delivered. But he predicts that once the current order backlog is worked down by mills, they might have to revert to the previous base price level of €320, maybe lower, rather than fetching the €370 they are seeking.
“Of course, mills are trying to keep up their prices because they have rising costs,” he states with a view on the high power prices in Germany. However, “they were moaning to us about energy costs even in spring last year when they sold for more than €1,000/t, and thus have since lost their credibility,” he adds.
From a recent query to Italy, he has learned that Italian mills are not taking orders from Germany because it pays better for them to sell elsewhere. “Germany is considered the weakest market for rebar mills,” he notes.
Christian Koehl Germany
Italy’s Arvedi AST to sell Turkish stainless steel service center to Saritas
Italian steelmaker Arvedi, planning to sell its stainless steel service center AST Turkey to Saritas Steel, has applied to Turkey’s competition authority, whose approval would be needed for the completion of any takeover, according to the authority.
German industrial engineering and steel production conglomerate Thyssenkrupp sold Italian Acciai Speciali Terni (AST), including its subsidiaries in Turkey, Germany and Italy to one of Italy’s largest steel producers Arvedi Group in January 2022.
AST Turkey has a stainless steel processing capacity of more than 30,000 mt/year, in Kocaeli, near Istanbul.
One of Turkey’s largest stainless steel service centers, Saritas Steel, which is aiming to purchase Arvedi’s subsidiary, AST Turkey, also located in the same region.
Saritas, expected to increase its stainless steel processing capacity notably with the purchase, would not comment.
Platts last assessed 304 grade 2 mm 2B stainless CRC at $2,060/mt CFR East Asian ports on Nov. 24, down 1.9% week on week, according to S&P Global Commodity Insights data.
Author: Cenk Can
SSAB to decarbonise all steel deliveries to Scania
Truck maker Scania and SSAB have signed a letter of intent to decarbonise all steel deliveries from SSAB to Scania’s heavy-duty vehicles by 2030, Kallanish hears from the companies.
Deliveries of SSAB’s proprietary “fossil-free steel” is targeted to ramp up rapidly from smaller amounts starting in 2026 and will be key in the shift towards a sustainable transport system, the steelmaker says.
SSAB is Scania’s main supplier of steel for its vehicles. The new deal, a next step in the long-standing relationship, caters for radically lowered climate emissions, the partners claim. SSAB notes that the ambition for 100% decarbonised deliveries is among the boldest of intentions agreed between SSAB and any customer. It moreover marks an ambitious plan within the First Movers Coalition, where Scania and SSAB are members to reduce the carbon footprint in hard-to-abate sectors.
Scania has outlined an industry-leading strategy to significantly reduce the carbon emissions by 2030 within four “hotspots”, constituting approximately 80% of supply chain emissions: batteries, steel, aluminium and cast iron.
The supply chain decarbonisation strategy and targets initially encompass Scania’s production in Europe but will gradually be extended to its production in China and Latin America, Scania says.
Christian Koehl Germany
Market contraction weakens Italian stainless service centres: Assofermet
Economic uncertainty and slow orders are hitting Italian stainless steel service centres’ margins and volumes. Demand continues to be sluggish but processing costs are simultaneously increasing, local steel trade association Assofermet warned during a meeting this week.
The sector is experiencing the worst margin contraction in 2023, which has become worse over the past 90 days. “We continue to see, on the one hand, a reduction in demand and, on the other hand, requests for increases from steel mills. The picture in Italy is one of high – but normalising – inventory levels and rising operating costs, preventing full price recovery,” Assofermet stainless steel service centres division coordinator Alessandro Bettuzzi says in a note sent to Kallanish.
“From the perspective of steel mills, the first half of 2023 was generally positive, both in terms of production volumes and margins … As for steel users, they are currently operating in an even more precarious condition due to the hardships of planning and scheduling purchases. The great uncertainty in the current market, caused among other things by the inflationary effect, makes them extremely cautious about both stainless steel consumption and investment,” he adds.
The association has warned of the danger of green steel and decarbonisation creating two parallel markets, a high-end one made of products resulting from sustainability policies and a consumer market with more affordable prices. “There are no conditions to impose the green standard in a homogeneous and distributed way in all contexts,” observes founder of T-Commodity Gianclaudio Torlizzi.
The Italian stainless steel market for both longs and coils has seen a harsh slowdown this year. Steelmaker Acciai Speciali Terni, part of Arvedi, has implemented several production stoppages due to sales volume contraction (see separate story). Italian demand for stainless flat steel continues to be fragile downstream.
Despite some growth in coil sales in September and October, service centres and re-rollers have not managed to pass on price increases downstream. Stocks are medium-high. The market for service centres’ clients is slow and is not absorbing the price increases. Sheet values are at the same level as producers’ coil levels, meaning these prices are not sustainable (see Kallanish passim).
Natalia Capra France
Investment funds formalise Celsa takeover, reorganise management
A group of investment funds formalised the takeover last week of Spanish steelmaking group Celsa. The funds represent the main creditors of the company and were given the green light by a Spanish court earlier in September to take over the majority of the company.
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.
Following the formalisation of the takeover, the new owners have selected a new chief executive for the group: Jordi Cazorla Pujalte. The executive is expected to take on the new role from 2024 and will replace Francesc Rubiralta.
Rubiralta represented the family controlling Celsa since its foundation back in the 1960s. He stepped down from his role as Eurofer president earlier this month.
As anticipated by Kallanish, the new owners of Celsa have also agreed to find a local industrial partner to take over a 20% stake in the group. It is understood the deadline to find the industrial partner has been set for mid-2024.
Emanuele Norsa Italy