Germany’s Wagon Automotive signs deal with Salzgitter Flachstahl for low carbon steel supply

Automotive industry supplier Wagon Automotive Nagold signed a memorandum of understanding with German steel producer Salzgitter Flachstahl to use the latter’s CO2-reduced steel to manufacture its complex body shell modules, the companies said Sept. 28.

The two companies did not disclose the volume of the supply agreement, but said that “the bulk of supplies in Germany will go to the Wagon Automotive plant in Nagold and will comprise mainly surface-treated flat steel products.”

“We are delighted to have been able to convince Wagon Automotive Nagold GmbH of the merits of our SALCOS project,” Phillip Meiser, Sales Director of Salzgitter Flachstahl said. “We think that by working together, we all can successfully make the ‘green’ transformation.”

Wagon Automotive is already a partner of Salzgitter Flachstahl. The SALCOS project is a Salzgitter Low CO2 Steelmaking program in which the company will be converting its steel production step by step to hydrogen-based processes with the target to achieve neutral carbon production from 2033. Currently, Salzgitter is already able to supply its customers with CO2-reduced steel made by the so-called Peiner route in which the slabs are produced from scrap using the plant’s electric arc furnace, or EAF.

Platts, part of S&P Global Commodity Insights, assessed Northwest European hot-rolled carbon-accounted coil up Eur5/mt on the day Sept. 27 at Eur830/mt ($873.08/mt) ex-works Ruhr. The assessment was calculated in line with the sum of Platts Daily Carbon-Accounted Steel Premium assessment and Platts Daily Hot-Rolled Coil price assessment in Northwest Europe. Offers for material with CO2 content close to 0/mt under scopes 1-2 were heard at Eur200-300/mt.

Annalisa Villa