Acciaierie d’Italia launches low-carbon steel brand
Italian steelmaker Acciaierie d’Italia (ADI), the joint venture between state company Invitalia and ArcelorMittal, has launched its own low-carbon steel brand called “Penisola Steel”. The steelmaker held last week a commercial roadshow called “Steel Commitment, Primary” in Taranto, attended by 500 companies, to get closer to its clients and gain market share.
The new brand defines the low-carbon steel produced at the Taranto steelworks thanks to the completion of the 2018-2023 environmental plan supported by the government and its private sector partner, Kallanish learns from ADI.
According to a study conducted by research institute SWG, 74% of companies interviewed in Italy believe that paying attention to sustainability is key, a higher figure than that of some other countries. 40% of consumers prefer sustainable steel products while 30% are ready to pay a premium for certified low-carbon products.
As for the next steps, “the main pillars are the environmental optimisation of the hot-end area, the electrification of the area itself – with the introduction of DRI technologies – and the development of a series of new energy plants, including a regasification and desalination plant, facilities for the synthesis of industrial gases, offshore wind farm and photovoltaic parks,” environmental director Alessandro Labile said during last week’s event.
He added that Taranto’s most important asset is the new research and development centre, which benefits from €12.5 million ($13.1m) investment with the support of 15 laboratories and 40 employees including researchers and technicians.
In collaboration with engineering and certification entity RINA, ADI has started a constant monitoring and certification platform for the capillary analysis of water, soil and other equipment.
Natalia Capra France
Macquarie cuts EU forecast amid recession, manufacturing deterioration
Macquarie has cut its EU crude steel production forecast for 2023 to a 2.3% on-year decline, followed by a 5% on-year rebound in 2024.
A eurozone recession likely commenced in the third quarter, with the downturn in the manufacturing sector having broadened, plus consumer services activity slowing, the financial services firm observes.
The manufacturing PMI has fallen below the levels seen during the euro crisis in 2011/12 and indicates there is still further for manufacturing gross value added to fall in the months ahead, negatively impacting steel demand, Macquarie says in a report sent to Kallanish.
Import arrivals into Europe have also picked up, especially from Asia, putting pressure on domestic prices. In July, EU hot rolled coil imports were up 88% on-year.
Interest among EU buyers in making new import orders has however fallen in recent weeks due to uncompetitive offers, as well as expectations that new safeguard quota availability will be very limited in the fourth quarter of 2023 and Q1 2024 (see Kallanish passim).
Macquarie expects European steelmaking margins to remain weak into next year. Its forecast of a lower iron ore price should help margins of blast furnace/oxygen converter-based steel producers to an extent. However, the firm expects coking coal to fall from spot but average higher in Q4 than in Q3, and scrap prices to average flat from spot levels in Q4. Scrap is now cheap relative to hot metal, but a fall in iron ore prices should bring them back in line, Macquarie points out.
Adam Smith Poland
Křetínský seeks 50% thyssenkrupp Steel stake: reports
Thyssenkrupp is about to sell a stake of 50% in its tk Steel unit to Czech billionaire Daniel Křetínský, German media reports.
Over recent months, Křetínský was heard to have emerged as an investor candidate in tk Steel (see Kallanish passim). Only some weeks ago, thyssenkrupp steel chief executive Bernhard Osburg was quoted as saying he is open to any investor who contributes to the strength of a major stakeholder. He said he especially welcomes investors with expertise in industries like steel or energy.
According to business daily Handelsblatt, talks have matured to the point that the size of a stake – 50% – has been revealed by people familiar with the matter. The new ceo of thyssenkrup AG, Miguel Lopez is pressing on with the negotiations, and a deal could reportedly still be finalised this year.
Another daily, WAZ, writes that the rumour has been received with dismay by union IG Metall, which called the plan a sell-out driven by Lopez.
When contacted by Kallanish, thyssenkrupp declined to comment on the rumours, but confirmed its efforts for the deconsolidation of the steel business.
Christian Koehl Germany
Carbon Border Adjustment Mechanism begins its transitional phase today
This Sunday, 1 October 2023, the Carbon Border Adjustment Mechanism (CBAM) will enter into application in its transitional phase.
CBAM is the EU’s landmark tool to fight carbon leakage and one of the central pillars of the EU’s ambitious Fit for 55 Agenda. It will equalise the price of carbon between domestic products and imports. This will ensure that the EU’s climate policies are not undermined by production relocating to countries with less ambitious green standards or by the replacement of EU products by more carbon-intensive imports. CBAM is a WTO-compatible measure that encourages global industry to embrace greener and more sustainable technologies.
In its transitional phase, CBAM will only apply to imports of cement, iron and steel, aluminium, fertilisers, electricity and hydrogen. EU importers of those goods will have to report on the volume of their imports and the greenhouse gas (GHG) emissions embedded during their production, but without paying any financial adjustment at this stage. While importers are asked to collect data for the fourth quarter of 2023, their first report will only have to be submitted by 31 January 2024. Furthermore, a number of flexibilities have been built into the CBAM’s structure for the first year of application, such as the use of default values for the reporting of embedded emissions and the possibility to use the monitoring, reporting and verification rules of the country of production.
The transitional phase will serve as a learning period for all stakeholders (importers, producers and authorities). It will allow the European Commission to collect useful information on embedded emissions in order to refine the methodology for the definitive period, which starts in 2026. As of that date, importers will need to buy and surrender the number of “CBAM certificates” corresponding to the GHGs embedded in imported CBAM goods.
To help EU importers and non-EU installations in the practical implementation of the new rules, a new CBAM transitional registry will become available on 1 October to help importers perform and report these calculations. The Commission is also gradually making available detailed written guidance, online training materials and webinars, sector-specific factsheets and a step-by-step checklist to support businesses as the transitional mechanism begins. Reviews of the CBAM’s functioning and product scope during its transitional phase will be concluded before the start of the definitive period, as well as the feasibility of extending the scope of CBAM to other goods produced in ETS sectors.
More details on CBAM are available here.
EUROMETAL met French distributors in Metz
EUROMETAL was present at the FFDM 2023 Convention in the French city of Metz.
The XVI Convention took place in the Metz Arsenal, a former military building intended for the storage of weapons and ammunition for the Metz garrison.
On Friday, we were welcomed by the Mayor of Metz, François Grosdidier. The day’s program took place under the theme: “Make way for Humans!”.
In an innovative era, where each year gives rise to revolutions, starting with the explosion of Artificial Intelligence, the FFDM draws attention to the place of humans in our society and in our businesses, without forgetting the problems in attracting young generations to an industry which is not always the most attractive.
The day before was devoted to visits to industrial sites in a region, Lorraine, in which Metallurgy has an important place: ArcelorMittal Lexy, Saint Gobain Pont-à-Mousson and Saarstahl Rail.
Klöckner & Co reorganizes responsibilities within the Management Board
The Supervisory Board of Klöckner & Co SE has decided to reorganize the responsibilities of the members of the Management Board regarding the European business. With immediate effect, Guido Kerkhoff, CEO of Klöckner & Co SE, will, in addition to his existing responsibilities, take over the management of the Group’s EU European operations as well as any other responsibilities from Bernhard Weiß.
The contract with Bernhard Weiß, member of the Management Board since June 1, 2021 and as Chief Executive Officer Europe (CEO Europe) previously responsible for the EU-European business, will be terminated by joint agreement as of September 30, 2023. The Management Board of Klöckner & Co SE will from now on consist of the members Guido Kerkhoff (CEO), Dr. Oliver Falk (CFO) and John Ganem (CEO Americas).
Prof. Dr.-Ing. Dieter H. Vogel, Chairman of the Supervisory Board of Klöckner & Co SE: “With this reorganization of responsibilities regarding the European business, we will optimize the composition of the Management Board, which will make the committee even more efficient. On behalf of the Supervisory Board, I would like to thank Bernhard Weiß for his great commitment and positive contribution to the development of Klöckner & Co. We wish Bernhard Weiß all the best for his future career.”
Souce: kloeckner.com
Entry into force of CBAM marks milestone, but effectiveness still to be proven, says EUROFER
The start of the transitional period of the Carbon Border Adjustment Mechanism (CBAM) on 1 October 2023 is a major milestone in the implementation of the EU Green Deal. The initial phase of the CBAM, with simplified monitoring and reporting, will be crucial to assess how watertight its functioning is in preventing carbon leakage in European industrial sectors, such as steel, to other countries that continue to invest in highly CO2-intensive technologies, states the European Steel Association.
“The EU steel industry has been shouldering a CO2 price for several years while steel imports from third countries, which on average have a significantly higher CO2 footprint, have been exempted thus far. We welcome the start of the CBAM test phase and expect that an effective carbon price will be introduced at the EU border in 2026 to level the playing field”, said Axel Eggert, Director General of the European Steel Association (EUROFER).
He continued: “We need to be extremely vigilant to ensure that the investment in the unprecedented number of EU steel decarbonisation projects is successful. This is even more urgent considering the latest OECD figures highlight there is over 600 million tonnes of global steel excess capacity – more than four times the EU’s annual steel production – with projects in the pipeline for several hundred million tonnes of additional steel capacity, based on highly CO2-intensive technologies. In this context, it is of the utmost importance that the meeting between Commission President Ursula von der Leyen and U.S. President Joe Biden on 20 October leads to an effective Global Arrangement on Sustainable Steel, establishing the right trade solutions to reduce excess capacity and decarbonise the global steel industry by 2050”.
The initial phase of the CBAM will test how watertight it is against carbon leakage towards countries that do not have equivalent climate legislation or carbon costs. Notably, default values should be sufficiently high to incentivise operators importing the most polluting products to declare real data and so avoid free-riding. Timely checks and deterring penalties are also required to address circumvention practices in complex sectors like steel. Carbon leakage also needs to be addressed throughout the entire value chain, including the downstream sectors currently not covered by the CBAM, and across global markets with an effective solution to preserve the competitiveness of European exports.
From Sunday 1 October, importers will be required to report on a quarterly basis the emissions embedded in steel, aluminium, cement, fertilizers, hydrogen and electricity imported to the EU. The first reports, covering the last quarter of 2023, are due by the end of January 2024. Payments of the levy on emissions will only commence in 2026.
CBAM monitoring and reporting rules are largely based on those used for the EU Emissions Trading System (ETS), which companies have been complying with since 2005. Nonetheless, to ensure a smooth transition, the European Commission, in its implementing regulation, has provided more flexibility for the first three quarterly reports until mid-2024. Importers can notably use default values or other monitoring and reporting methods applied in their respective countries. Additionally, they can revise and correct their reports until July 2024. In this context, constructive cooperation among all actors in the value chain and timely preparation is paramount for success, including by mapping trade flows, doublechecking the new rules and collecting the required information.
Southeast Europe continues to decrease steel output
Southeast Europe (SEE) crude steel production decreased in August, according to the latest worldsteel data monitored by Kallanish. Regional output amounted to 181,559 tonnes, compared with 246,806t in July.
In the first eight months of the year, regional production decreased to almost 2.08 million tonnes from 3.27mt in January-July 2022.
However, worldsteel did not provide data for August steel production in Bosnia or Moldova.
Serbia was again the largest steel producer among the seven countries of SEE, which also include Bulgaria, Croatia, Slovenia, Bosnia, North Macedonia and Moldova.
Serbia’s production of crude steel totalled 1.02mt in January-August, down by 13.4%. The second-largest steel producer in the region, Slovenia, achieved eight-month production of 367,291t, down by 17.6%.
Third-largest producer Bulgaria saw its crude steel output approximately flat at 361,400t. However, fourth-largest North Macedonia did not produce any volumes last month. In January-August it produced 183,587t compared to 157,374t in the same period last year.
Fifth-largest Croatia saw crude steel production at 147,998t, up 11.4%
Earlier, Special steelmaker Slovenian Steel Group (SIJ) resumed full capacity production at its subsidiaries SIJ Metal Ravne and SIJ Ravne Systems after the devastating floods that hit the country at the beginning of August (see Kallanish passim).
In July, SIJ Group suspended production of stainless steel at its SIJ Acroni unit due to an accident at the hot rolling mill (see Kallanish passim). This was expected to impact production for up to three months.
HBIS Group Serbia Iron & Steel restarted blast furnace No.1 in March at its Smederevo works. The enterprise planned to suspend one BF in summer for maintenance.
The Bulgarian Association of Metallurgical Industries (BAMI) warned earlier this year of increased imports into the EU of rebar and light sections of non-alloy and other alloy steels from Egypt and Algeria.
Svetoslav Abrossimov Bulgaria
Kicherer secures carbon-reduced steel from Beltrame
Kicherer, a distributor of mainly long products based in southern Germany, has partnered with Beltrame to supply carbon-reduced merchant bar of Beltrame’s proprietary Chalibria label.
The deal makes Kicherer the first supplier of CO2-neutral merchant bar, the company says, adding that 20% of its portfolio is now CO2-free. “We expect to source more such steel from other mills,” its managing director Eberhard Frick tells Kallanish. Kicherer is also a major distributor of rebar, with several warehouses and bending shops in the country.
On the occasion of the introduction of the new product, Beltrame chief business development officer Carlo Beltrame visited Kicherer’s headquarters in Ellwangen. Chalibria is used in a number of applications in construction, automotive and renewable energies.
Kicherer emphasises its efforts for sustainable use of resources. Among other things, it operates two solar power plant with an annual capacity of nearly 2 GWh, which covers 70% of the company’s power consumption. It highlights that it was awarded for its efforts last year by Nordwest, one of Germany’s big steel purchasing cooperatives.
Christian Koehl Germany
Supply chain disruptions change end-user procurement strategies: Miele
Disturbances in global supply chains in recent times have led to a change of attitude among players in the chain, according to Konstantin Eckert, director procurement of production materials at Miele.
Speaking at MBI Infosource’s Stahltag in Frankfurt last week, Eckert cited the examples of the semiconductors shortage last year and the blockage of the Suez Canal. Incidents like that have taught players on the receiving end “how expensive it gets when you want to produce, but cannot”, he said at the event attended by Kallanish.
Such experiences have since promoted a new mindset of resilience among players along the value chain, Eckert finds. “We have a high manufacturing depth, and in case of a standstill, our fixed costs would eat us up,” he observed.
White goods maker Miele sources carbon steel as well as stainless steel strip, for which it holds separate annual negotiations at mid-year and year-end. “We have created a formal process for the negotiations, to create confidence and transparency with partners,” Eckert explained.
Regarding stainless steel, the company ensures awareness about its sources, especially for steels produced from nickel pig iron (NPI) and its sometimes problematic mining circumstances. “We keep an eye on producers and origins, as this is a factor in the value of our brand,” he pointed out.
The German company has so far secured supply deals for carbon-reduced steels with Salzgitter, thyssenkrupp and H2 Green Steel.
Christian Koehl Germany