Sources noted that most demand for steel with reduced carbon emissions was coming from Nordic states.
“This is very simple: if there is fit legislation and public projects requiring green steel then there is a market [for green steel],” a mill source in southern Europe said.
“Nordic countries are champions of green steel procuring, while Central and Southern Europe are lagging far behind,” the mill source added.
“We sell most of our [steel with reduced carbon footprint] in the Nordic states,” a second supplier said.
Also, sources pointed out that publicly listed companies that had to submit sustainability reports have also been expressing more interest in green steel bookings.
“Investors are not only interested in financial data; sustainability is noticeably higher on everyone’s agendas lately,” a second mill source said.
Fastmarkets’ methodology defines European green steel as “steel produced with Scope 1, 2 & 3 emissions at a maximum of 0.8 tonne of CO2 per tonne of steel.”
During the assessment week, leading European suppliers kept the premiums for such steel at €200-350 ($210-368) per tonne.
Buyer sources estimated the achievable premiums for green steel with such level of emissions at €50-120 per tonne, although the lower end of that range was not considered workable by mill sources.
A mill source reported a bid for steel with carbon emissions of 0.8 tonne of CO2 per tonne at €70 per tonne. The bid was rejected by the supplier, however.
Mill sources estimated achievable premiums for steel produced with Scope 1, 2 & 3 emissions at a maximum of 0.8 tonne CO2 per tonne of steel at €100-200 per tonne.
One supplier, however, said that for such a threshold the premium should be no lower than €150 per tonne.
As a result, Fastmarkets’ weekly assessment of the green steel domestic, flat-rolled, differential to HRC index, exw Northern Europe, was €100-200 per tonne on Thursday, narrowing upward by €20 per tonne from €80-200 per tonne seven days earlier.
Sources pointed out that lack of willingness to pay premiums for steel with reduced carbon emissions content was partially explained by the unfavorable economic situation in Europe.
“Many small and medium-sized steel companies have to fight for their survival, so sustainability becomes secondary in such conditions,” a trader in Germany said.
Meanwhile, Fastmarkets’ assessment of the flat steel reduced carbon emissions differential, exw Northern Europe, was €0-60 per tonne on Thursday, widening upward by €10 per tonne from €0-50 per tonne seven days earlier.
For steel produced in blast furnaces, with reduced carbon emissions of 1.4-1.8 tonnes of CO2 per 1 tonne of steel, premiums were reported at €40-60 per tonne.
A transaction for steel with emissions of 1.6 tonnes of CO2 per 1 tonne of steel was reported at €60 per tonne.
Buyer sources suggested a premium level of €0-50 per tonne for steel with emissions of 1.4-1.8 tonnes of CO2 per 1 tonne of steel, depending on the supplier.
A premium for steel with emissions of 1.8 tonnes of CO2 per 1 tonne of steel was reported at €40 per tonne.
