“This year started on a positive note, but demand is deteriorating, the steel market is weak in general and the willingness to pay a premium [for green steel] is not there,” a mill source told Fastmarkets.
Market participants said there was a lack of projects across Europe requiring green steel and demand from the key consumer – the automotive industry – had also been slow lately.
European suppliers have, therefore, started to be more flexible with their green steel sales and have started offering discounts on bigger lots.
Notably, recent trades for steel with Scope 1, 2 and upstream Scope 3 emissions below 0.8 tonnes of CO2 per tonne of steel, were reported at €100-150 ($111-166) per tonne.
And one transaction was said to have been completed with a premium below €100 per tonne – although that was for for steel with CO2 content below 0.3 tonnes per tonne of steel and could not be widely confirmed, sources told Fastmarkets.
Most buyers estimated the achievable premiums for green steel with Scope 1, 2 and upstream Scope 3 emissions below 0.8 tonnes of CO2 per tonne of steel at €100-200 per tonne.
In stark contrast, however, offers for the same material were reported at €200-300 per tonne during the assessment week.
Fastmarkets’ weekly assessment of the green steel domestic, flat-rolled, differential to HRC index, exw Northern Europe was €100-200 per tonne on Thursday, widening downward from €150-200 per tonne on August 29.
The corresponding green steel base price, HRC exw Northern Europe, daily inferred was €737.60 per tonne at the midpoint on September 5.
Despite the weak market and slow consumption, sources told Fastmarkets they remain optimistic regarding the take-off of green steel in Europe in the coming years.
“The transition to green steel is still on the cards – it’s coming; it’s inevitable. But considering the current economic situation [in Europe], it is going to be delayed,” a large buyer in Northern Europe said.
