Green flats
Fastmarkets’ methodology defines European green flat steel as “steel produced with Scope 1, 2 or 3 emissions at a maximum of 0.8 tonnes of CO2 per tonne of steel.”
Such steel was on offer at a minimum price of €200 per tonne ($233) among the European mills. However, some suppliers indicated that, on large volumes, €150-180 per tonne was achievable.
Buyers estimated tradable values for green flat products with such specs at €100-120 per tonne and even below €100 per tonne in some cases, citing insufficient demand.
One supplier source said categorically that such low levels, notably below €100 per tonne, were impossible for physically produced green steel due to high costs of production.
“We don’t have many suppliers in the EU who can offer such steel [with emissions below 800 kg per 1 tonne of steel] without mass-balancing. And we have to pay for green electricity for Environmental Product Declarations – there has to be a premium to compensate for that,” a mill source said.
Another supplier confirmed that demand for green steel has recently been more concentrated in Nordic countries, with the Germany and Benelux area “catching up.”
“Green steel demand should be generated through public procurement – and we mainly see that in Scandinavia so far,” a second mill source in Europe said.
Fastmarkets’ assessment of the green steel domestic, flat-rolled, differential to HRC index, exw Northern Europe was €120-170 per tonne on Thursday, unchanged week on week.
Green longs
In the long steel segment, it remains traditionally more difficult for producers to push through premiums among customers, owing to the initially more environmentally friendly nature of production.
Most mills are equipped with electric-arc furnaces (EAFs), which give a maximum of 0.8 tonnes of CO2 emissions per tonne of steel under their standard Environmental Product Declaration (EPD).
Following the improvement of EPD, mills in Europe can provide material with CO2 emissions varying within the range of around 0.2-0.4 tonnes of CO2 per tonne of steel.
Some mills, however, have initial EPDs of 0.35-0.45 tonnes of CO2 per tonne of steel, while customers – mainly located in the countries of Northern Europe such as the Netherlands, Finland, Norway and Denmark – have asked for long steel with an EPD of 0.35-0.5 tonnes CO2 per tonne of steel in their recent tenders, a seller source told Fastmarkets.
Fastmarkets’ methodology defines European green long steel as “steel produced with Scope 1, 2 or 3 emissions at a maximum of 0.5 tonne of CO2 per tonne of steel.”
Green longs premium offers heard in the week to August 20 varied within the range of €30-40 per tonne, according to several sellers.
Nevertheless, in actual deals it is difficult to get even €20 per tonne, one of them said, adding that in most cases no premium is charged.
They added, however, that emission requirements set by customers cut off any material produced outside Europe because mills overseas have not reached EPDs equal to those in Europe.
Fastmarkets’ assessment for the green steel, differential to steel reinforcing bar (rebar), domestic, delivered Northern Europe was €20-30 per tonne on August 20, stable week on week.
