The unit was expected to address the need for long steel materials produced with reduced carbon emissions.
“For the first time in Germany, [rebar] in coils weighing as much as 8 tonnes will be produced for the construction industry, using an innovative, fully electric process with zero direct [carbon] emissions,” Feralpi said.
The construction of the new rolling mill is part of the company’s 2021-26 industrial development plan, which was intended to reduce its environmental effects through electrification.
According to Fastmarkets’ information, the new facility will have capacity for about 500,000 tonnes per year of rebar.
The company added that the technical investment related to its industrial development plan reached €169 million ($183.3 million) in 2023.
As well as the new rolling mill, the funds were invested in a new scrapyard in Germany, and technical improvements to existing facilities in Italy.
According to Feralpi Group, the investments helped the company to address the “need to offer low-emissions steel for both the infrastructure and mechanical engineering industries.”
Currently, the demand for carbon-reduced and green steel was stronger in flat steel products such as hot-rolled coil, trade sources told Fastmarkets. Such products are more expensive due to the premiums charged by producers, with the automotive industry being the main consumer.
Fastmarkets’ weekly assessment of the green steel domestic, flat-rolled, differential to HRC index, exw Northern Europe, was €170-250 ($184-271) per tonne on July 25, stable week on week.
And the assessment of the flat steel reduced carbon emissions differential, exw Northern Europe, was €40-60 per tonne on July 25, unchanged since May 30.
Regarding carbon-reduced and green long steel products, the practice of charging premiums was not widespread, trade sources told Fastmarkets. The construction sector was usually the main consumer of long steel products such as rebar and wire rod, but many companies in this field were not ready to pay additional costs.
Premiums have been charged sporadically for particular investment projects that required carbon-reduced and green steel products.
“We still need to educate the market about the advantages of green long steel products,” a producer source said.
Ambitious green goals
Feralpi Group planned to decrease its emissions of CO2 and other climate-affecting gases by 50% by 2030, the company said, adding that this referred to the Scope 1, 2 and 3 emissions related to its hot-drawn products. This goal has already been approved by the International Science-Based Targets Initiative SPTi.
In 2023, Feralpi Group reduced its Scope 1 and Scope 2 emissions by 24% year on year, the financial report said.
Challenging environment for steel products
In 2023, Feralpi Group produced 2.42 million tonnes of steel, down by 1.06% from the previous year.
But revenue dropped to €1.73 billion, compared with €2.40 billion in 2022. The decrease in revenue resulted in a significant reduction in earnings before interest, taxes, depreciation and amortization (EBITDA), which fell to €83.2 million compared with €501.7 million in 2022.
Feralpi noted that several factors weighed on the reduced steel demand, including the shift in consumption from goods to services, the weakening of European industry, and the more difficult conditions for investments.