Category: Latest Updates

H2 Green Steel and Fortum have signed a frame agreement for electricity trading for the supply of CO2-free electricity for H2 Green Steel’s projected steel mill in northern Sweden.

The frame agreement is initially planned to include two power purchase agreements (PPAs) for 2.3 TWh per year, Kallanish learns from H2GS. In detail, these are one index-based PPA of 1.3 TWh annually (from 2026) with a five-year hedging horizon, and a fixed price PPA of 1 TWh for up to nine years (from 2027).

Significant volumes of electricity are needed to power the 700-800MW electrolyser that will generate green hydrogen, H2GS notes. The electrolyser will reduce iron ore to sponge iron that will feed the steel production at H2GS’s plant.

“Fortum takes a frontrunner position among Nordic companies supporting the region’s green industrialisation,” says Luisa Orre, chief procurement officer of H2GS.

In fact, Fortum is also a stakeholder in another ambitious Scandinavian greenfield venture – Blastr – which plans to build a mill for green steels in Finland.

Christian Koehl, Germany

EU flat steel service centre shipments increased 0.5% on-year in January-February, distributors’ association EUROMETAL informs Kallanish.

This, however, represents a slowdown in February after Strip Mill Products shipments in January had risen 3.8% on-year. Only hot-rolled flats have shown a positive trend.

When expressed in days of shipments, stocks at EU SSC reached 73 days in February compared to 71 days in February 2022.

The February index of stock volumes dropped to 101, compared with 106 in February 2022 (average 2018 = index 100).

Adam Smith Poland

The green steelmaking transition is an unstoppable trend that is about to embrace significant demand growth over the coming decades, said speakers at the Kallanish Asia Steel Markets 2023 conference in Ho Chi Minh City last week.

Dr Sebastian Langendorf, chief executive and founder of Singapore-based Meranti Steel, expects significant demand for green steel due to considerations of increasing political pressure, carbon self-commitments, supply chain requirements and awareness of end customers.

Langendorf sees global green steel demand rising from 7 million tonnes in 2021 to 41mt in 2025, and then jumping significantly to 235mt by 2040. Simultaneously, the share of low-emission steel demand versus all flat steel demand will grow from 1% to 26%. He sees the trend as a big challenge but also a huge opportunity.

Meanwhile, Martin Smith, Asia business development director at Primetals, said at the event: “It [the transition to carbon neutrality] is coming, and we can’t stop it.”

In terms of technology, Gaku Ito, general manager at Japan’s largest pure EAF-based steelmaker Tokyo Steel, asserted that carbon capture, utilisation and storage (CCUS) will not be effective and feasible for low-carbon steelmaking in Japan. This is because “land and other costs are too high,” he explained.

Gaku Ito regards EAF technology as the first-choice route for green steelmaking, meaning prime scrap will become more demanded and therefore expensive.

However, questions remain over where the vast sums of money needed for the low-carbon shift will come from. “If half of global steel demand decides to be low carbon, that would require a total of $11 trillion. Who is going to pay for that?” asked Kallanish managing editor Asia Tomas Gutierrez.

Georgsmarienhütte and nearby carmaking plant Volkswagen Osnabrück will be strengthening their cooperation in the recycling of steel, Kallanish hears from the German long products maker.

Volkswagen has a pressing plant in Osnabrück, where strip steel is processed into body components for on-site production at other group locations. For some years, unused metal from the manufacturing process has been delivered to the mill in Georgsmarienhütte, around 10km away. It is then melted in an electric arc furnace and recycled into a new high-quality starting material for Volkswagen AG’s transmission production in Baunatal, Hessen.

Alexander Becker, chief executive of Georgmarienhütte parent company GMH Group, has now announced a further strengthening of this long-standing partnership with the aim of completely reusing raw materials. Shipment volumes of recyclable metal will remain at a high level in future, significantly reducing the CO2 footprint of both companies in the process.

Compared with the same tonnage of steel produced in a conventional blast furnace, the recycling of this steel scrap at Georgmarienhütte’s EAF saves 8,000 tonnes/year of CO2, GMH states.

Christian Koehl, Germany

There has been another fire at one of ArcelorMittal’s blast furnaces, this time at its Dunkirk site in France.

The fire started on the floor of blast furnace number four today, but was quickly extinguished and the unit has been made safe.

Dunkirk has three blast furnaces, with a combined pig iron capacity of 7mn t/yr. Blast furnace four has a capacity of about 3.6mn t/yr, according to Argus records. It is not yet clear what the production impact of the accident may be.

The blaze follows another at ArcelorMittal’s Gijon site, where blast furnace A caught fire on 22 March. Pictures of this fire, which started during a nozzle replacement, were widely shared on social media and it is expected that the furnace out of action for some time. The affected furnace is being emptied for assessment, said ArcelorMittal this week. After this furnace fire, which affected slab supply, sources said ArcelorMittal would use slab from one of its other sites, most likely Fos-sur-Mer or Dunkirk.

By Colin Richardson

Tata Steel Nederland, one of Europe’s largest steelmakers, will start “a massive modernization and reline program” at its IJmuiden steelworks’ Blast Furnace 6 in the first week of April, a company spokesperson said March 29.

During the furnace’s downtime, control systems and all refractories — materials that must withstand temperatures of about 1,500 C — will be replaced, spokesperson Peter van Boesschoten told S&P Global Commodity Insights in an emailed interview.

Various measures to limit environmental emissions under the steelmaker’s Roadmap Plus improvement program will be implemented during this period, including the installation of three additional exhaust hoods to limit dust. The increased extraction capacity should reduce dust emissions during hot metal tapping by about 75%, the spokesperson said.

“In order to protect the overall value chain, as part of preparation for this reline, sufficient stocks of steel slabs have been put in place to continue to operate the rolling assets to meet demand for our steel,” van Boesschoten said.

The length of the downtime was not immediately disclosed.

However, the spokesperson noted that the forthcoming stoppage “will be the last time we perform such a large-scale operation at a blast furnace.”

“As part of our decarbonization journey Blast Furnace 7 is expected to be the first to go out of operation, in 2030,” van Boesschoten said. “Blast Furnace 6 is expected to follow in the next decade.”

Blast Furnace 6’s CO2 emissions/mt of pig iron produced are among the lowest in the world, according to the spokesperson.

Tata Steel Nederland has previously announced it aims to reduce CO2 emissions by 35%-40% by 2030 and be completely carbon neutral by 2045. Across Europe, the company is implementing CO2-reducing measures at its locations, including a switch to green hydrogen-based steelmaking at its IJmuiden steelworks.

Cold mill task force

Tata Steel Nederland has meanwhile put into place a task force to resolve challenges encountered during the steelmaker’s upgrading of its cold rolling mill 21, which resulted in a force majeure being declared Feb. 24. The force majeure is still in place.

“During the process of upgrading Cold Mill 21 at Tata Steel’s IJmuiden steelworks, we encountered unforeseeable challenges that have led to an extended commissioning phase,” the spokesperson said. “We’ve a task force in place — including the involvement of the cold mill upgrade supplier — to resolve the situation.”

The steelmaker has and will continue “to put full focus on all possible mitigation measures to reduce supply risk and disruptions to our customers as much as possible,” van Boesschoten said. “This also includes sourcing of external cold-rolled material and toll rolling at third party cold rolling mills. Furthermore, TSN has worked and is working with customers to bring the order book in line with available capacity.”

The steelmaker will continue to update customers on the situation and when further improvement can be expected, he said.

Tata Steel Nederland had started the upgrade of Cold Mill 21 in August 2022 to further improve the steel surface quality.

The blast furnace-basic oxygen furnace-based IJmuiden plant has capacity to produce up to 7.5 million mt/year of hot- and cold-rolled coil in a variety of finishes, according to Tata Steel Nederland’s website.

The steelmaker denies market talk of the existence of any structural cold mill production problems that could take up to two years to fully recover from, the spokesperson added.

Platts, part of S&P Global, assessed domestic HRC prices in Northwest Europe at Eur860/mt ex-works Ruhr March 29, up Eur5/mt on the week.

Market sources said that mills were in a bullish mood, and lead times for EU material long, meaning buyers have started showing greater interest in imported coil.

Steelmakers across Europe are expected to increase HRC offers to around Eur900/mt ex-works in the week ending March 31, according to market sources.

— Diana Kinch

Steel plate prices were stable in Northern Europe, but slightly down in a quiet Italian market in the week to Wednesday March 29, with producers in Southern Europe giving discounts for bigger volumes, sources told Fastmarkets.
Italy
Italian re-rollers were offering May delivery plate at around €900-910 ($974-985) per tonne EXW, with transactions for small tonnages reported at the lower end of the range over the past week.

Stockholder prices for bigger volumes, however, could be below €900 per tonne EXW – at about €870-890 per tonne EXW, sources said.

Stockholders in Italy are now looking to book May delivery plate, but traded volumes remained limited in the week to Wednesday, they added.

Fastmarkets’ weekly price assessment for steel domestic plate, 8-40mm, exw Southern Europe was €890-900 per tonne on Wednesday, down by €10-20 per tonne from €900-920 per tonne on March 22.

Market participants said they expect plate prices to stabilize in April.

“Prices for slab, [which is the key feedstock for steel plate production,] have stabilized,” a mill source told Fastmarkets. “Imports are quite expensive [and] there has been some limited restocking, so a rollover [in plate prices] is a very likely scenario.”

A buyer source agreed, but said supply tightness was a key issue.

“The lack of heavy plate-grade slab will keep the market stable in April,” the buyer source said.

Steel plate from Indonesia and South Korea was on offer in Italy at €860-870 per tonne CFR, for June shipment, sources said, which was also largely stable over the past week. No new booking were reported, however, because the Italian buyers did not consider those offer prices “workable” given the long lead times and the fact they are in line with domestic prices.

Northern Europe
In Northern Europe, steel plate prices have been largely unchanged in the week to March 29, with trading in the region slow and buyers maintaining a “wait-and-see” stance, sources said.

The plate volumes held by distributors and stockholders has reduced, however, so a pick-up in activity is expected soon, they added.

“Stock levels for [heavy plate] have sunk to their lowest level for the past six years,” a trader source told Fastmarkets, “so restocking activity is expected, especially for special sizes and grades.”

One integrated mill in Germany was offering May rolling plate to the spot market at €1,050 per tonne EXW, according to some market participants.

Another integrated mill in the nation, traditionally more focused on sales for projects,was maintaining offers at €1,100 per tonne EXW

Offers from France and Denmark to Germany were heard at €1,030-1,050 per tonne CPT for S355-grade plate with May delivery.

Czech re-roller was aiming for €1,085 per tonne CPT to the German market and reportedly had limited allocation.

Several sources also reported that limited tonnages from a Polish producer were on offer in Germany at €1,070 per tonne CPT, but added that the price was not considered workable because the supplier had apparently had problems with production and had delayed previous deliveries.

Fastmarkets’ weekly price assessment for steel domestic plate, 8-40mm, exw Northern Europe was €1,050 per tonne on Wednesday, narrowing from €1,040-1,070 per tonne on March 22 and reflecting the lower offers, deals and buyer estimates of achievable prices.

Published by: Julia Bolotova

European steel merchant bar producer AFV Beltrame Group forecast for 2023 a consolidation of the 2021 volumes to 2.2 million-2.3 million mt of finished products, Carlo Beltrame, head of business development and the CEO of France and Romania, told S&P Global Commodity Insights March 28.

The National Recovery and Resilience Plan is the instrument that, using Next Generation Europe funds, will make Italy more sustainable and better prepared for the challenges and opportunities of the green and digital transitions within the EU, of which 37.5% of the plan will support climate objectives and 25.1% will support the digital transition, he spoke on phone during his roadshow to present the company’s low-carbon emission green product Chalibria.

“At the moment, the market is very quiet because the demand is low not only in Italy but also across Europe due to the high interest rates that are slow due to the high interest rates. I think that as soon as we see the EC funds being used, the situation will change in both the private and public sectors. Companies that can provide low-carbon products to the market will do particularly well,” Beltrame said.

The Merchant Bar Europe Domestic monthly went down since the beginning of the year to Eur820/mt delivered from Eur885/mt delivered, with prices that have been stable since February, according to S&P Global data. The Platts TSI Northwest Europe Rebar prices registered a similar path, beginning January from Eur745/mt to Eur710mt base ex-works March 22.

Back in November, Beltrame announced the production of Chalibria. The company at the moment is doing a roadshow in Italy, France, Romania and Switzerland where it has steel production sites. On March 28, the company did a large event in Italy.

Beltrame aims to reduce its CO2 emissions (Scoop 1+2) by 40% by 2030 and to achieve this it has defined a Eur200 million ($185 million) decarbonization plan with a roadmap to accelerate the transition toward climate neutrality.

“Through Chalibria we want to convey the group’s sustainability strategy. The green evolutions at a European level are so fast, the changes so rapid that we need to respond promptly. We are working on this as a company and at the moment we are already the first producer in France to comply with the law against greenwashing, thank you to our zero-emission certified steel,” Beltrame said, although he underlined that the Beltrame Group’s activities are already well below average international and European sectors, reaching 570 kgCO2/mt of rolled steel.

Beltrame produces steel via the electric arc furnace route. “I believe that as EAF producers, we need to focus on Scope 2 and 3, for this reason, we bought hydroelectric plans whose closing will be in May as well as the already announced construction of a photovoltaic park in Targoviste.”

Beltrame confirmed that the 70-55 MW park in Targoviste should be ready to be operative by late October.

In March 2022, Beltrame bought the special steel producer Romania-based Targoviste (COS) for Eur33.3 million to transform COS Targoviste into an important production unit, investing Eur100 million to revamp the mill.

“In April, we will start production in COS and we will produce 15.000 mt of rebars every month and then 20,000 mt a month from 2024,” Beltrame told S&P Global.

Carlo Beltrame also updated about plans to build a 600,000 mt/year greenfield steel plant in Romania and a 100 MW solar power farm.

“We are very much focused also on this project. We have submitted to Romania’s government our environmental impact assessment and we are waiting for the authorizations while in parallel we are working with the creditor’s banks,” he added.

— Annalisa Villa

Aartee Bright Bar (ABB) administrators Alvarez & Marsal Europe have sold the insolvent UK engineering steel distributor to Barrett Steel Limited for £13 million ($16m).

The acquisition encompasses Aartee Bright Bar Limited’s distribution business, located in Rugby, Bolton, Newport and Southampton, and its Bright Bar business operating out of Willenhall, as well as Aartee Bright Bar Property Limited’s freehold and leasehold interests at these sites. As a result of the sale, 173 jobs have been saved.

However, Aartee Bright Bar Limited’s Hot Rolled business in Dudley is not included in the transaction and will be wound up, leading to 45 redundancies and the closure of the site.

“This substantial investment from Barrett Steel is a vote of confidence in the business and the wider UK steel industry. The Companies’ creditors will now receive a substantial dividend and will have the opportunity to trade with the new business going forward,” Alvarez & Marsal managing director Michael Magnay says in a note sent to Kallanish.

Barrett Steel chief financial officer Marcus Tyldsley says his firm is “delighted” with the acquisition “as part of our ongoing expansion strategy”.

Bradford-based Barrett Steel is the UK’s largest independent steel stockholder. The firm recently announced plans to build a £10m dedicated steel distribution centre at its Groveport site in North Lincolnshire (see Kallanish passim). The firm’s revenue in 2021, the latest figures available, rose 44% on-year to £440.99m, while net profit was £41.11m versus a year-earlier loss of £5.5m.

Jeffrey Kabel, chief transformation officer at Liberty Steel, whose parent GFG sought to buy Aartee Bright Bar out of administration earlier this month, says GFG’s business plan “would have rescued ABB in its entirety, saved all its 250 employees and ensured its continuation as a going concern. Within hours of this development we’ve witnessed the devastating impact of the decision with the announcement of immediate layoffs of all employees at ABB’s steel plant in Dudley.”

“We struggle to see the logic in this outcome which has put short-term gain for a selected few ahead of the long-term interest of the UK steel industry and its workforce,” Kabel adds.

Adam Smith, Poland