Green steel markets across Europe were at complete standstill for both flats and longs over the past week; spot activity was close to nothing, with buyers reluctant to pay high premiums for decarbonized steel, Fastmarkets heard on Thursday February 5.
Buyers across Europe continued to show limited willingness to pay premiums for steel produced with reduced carbon emission content, citing unfavorable market fundamentals and broader challenges that European steel was faced with.
Fastmarkets’ methodology defines European green steel as “steel produced with Scope 1, 2 & 3 emissions at a maximum of 0.8 tonnes of CO2 (tCO2e) per tonne of steel.”
Scope 1 refers to direct emissions, while Scope 2 and 3 are indirect emissions.
Premiums from European steelmakers able to produce steel with such emissions thresholds continued to be reported at €200-300 ($236-354) per tonne — relatively stable over the past several months.
During the assessment week, a supplier source confirmed an offer for green premiums at €200 per tonne with room for discounts for larger tonnages, but reported no deals in the past several weeks.
“We have a few inquiries, but when it comes to the prices, buyers show great resistance to pay three-digit premiums,” the supplier source said.
Buyers’ estimates of the tradable value for green steel premiums were heard no higher than €100-150 per tonne in the week to Thursday. Some sources suggested even lower premiums were possible in spot trades — below €100 per tonne — claiming that higher premiums could be mainly sealed in offtake agreements.
Seller sources estimated the achievable premiums for green flat steel at €150-180 per tonne.
As a result, Fastmarkets’ weekly assessment of the green steel domestic, flat-rolled, differential to HRC index, exw Northern Europe was flat at €100-150 per tonne on February 5, unchanged since January 22.
Meanwhile, in the long steel sector, demand for green products has been almost non-existent lately.
“Unfortunately, there is zero willingness to pay premiums for green longs. Our regular longs are already considered green [because they are produced via electric-arc furnace (EAF) using a favorable energy mix in the countries where assets are located],” a supplier source said.
Project businesses were inquiring for green long steel products produced with a CO2 emissions threshold around 450-500 kg per tonne of steel, sources said, but such demand was limited.
Fastmarkets’ methodology defines European green long steel as steel produced with Scope 1, 2 or 3 emissions at a maximum of 0.5 tCO2e per tonne of steel.
Premiums for steel with such specs were offered by several suppliers around €20 per tonne during the assessment week. But even such a relatively low premium was rarely sealed in deals, sources said.
Estimations of achievable premiums were heard at €0-20 per tonne during the assessment week.
As a result, Fastmarkets’ green steel, differential to steel reinforcing bar (rebar) domestic, delivered Northern Europe was €0-20 per tonne on Wednesday February 4, down from €20-30 per tonne seven days prior.
Vlada Novokreshchenova in Dnipro contributed to this report
