Flat steel
A holiday period across Europe has limited further already-slow demand for green flats, sources said.
Sources said that that economic crisis in Europe was slowing down decarbonization and green steel uptake in the market in general.
“Green steel demand should be generated through public procurement — and we only see that in Scandinavia so far,” a mill source in Europe said.
Fastmarkets’ methodology defines European green steel as steel produced with Scope 1, 2 & 3 emissions at a maximum of 0.8 tonne of CO2 per tonne of steel.
Green steel suppliers in Europe maintained premiums for such steel at €200-350 ($226-395) per tonne.
Notably, a premium for steel with carbon emission of under 600 kilograms and Scope 1,2 and 3 upstream was reported at €200 per tonne.
Transactions for such steel were heard at €200 per tonne during the week, but for limited tonnages.
Premiums for steel, carbon neutral under Scopes 1 and 2 were reported at €300 per tonne.
And premiums for green steel, with Scope 1, 2 and upstream Scope 3 carbon emissions of less than 0.8 tonnes per tonne of steel, were reported at €200-250 per tonne.
Buyer sources estimated achievable prices for such material at €150-200 per tonne.
As a result, Fastmarkets calculated its weekly green steel domestic, flat-rolled, differential to HRC index, exw Northern Europe at €150-200 per tonne on Wednesday April 30, stable week on week.
Long steel
Activity in the green long steel segment was typically slower, compared with the flat steel segment, as the production nature of the former is more ecological than than the latter.
Most long steel producers are electric-arc-furnace (EAF) based; therefore, their emissions are much lower than in the flat steel sector, which is mainly equipped with basic oxygen furnaces (BOF).
Most buyers do not see the point in paying premiums for green long steel, as there is not much incentive from local governments to use it in projects, Fastmarkets heard.
The existing modest demand is typically coming from Northern Europe.
Fastmarkets’ methodology defines European green long steel as “steel produced with Scope 1, 2 & 3 emissions at a maximum of 0.5 tonne of CO2 per tonne of steel.” Meanwhile, EAF producers — who use scrap as feed — typically emit around 0.8 tonne of CO2 per tonne of steel.
Premium offers varied within the range of €20-50 per tonne, unchanged week on week, but only low-end figures are accepted, sources said.
Thus, the price assessment for green steel, differential to steel reinforcing bar (rebar), domestic, delivered Northern Europe was €20-30 per tonne on April 30 stable from April 24.
Looking ahead
Despite quiet activity in the spot market in the recent months, industry sources were still largely optimistic regarding green steel uptake in the years ahead.
In general, the market for steel with reduced carbon emissions was still evolving in Europe, and industry sources expected a greater uptake of green steel across supply chains once environmental regulations, such as the Carbon Border Adjustment Mechanism (CBAM), are implemented.
European producers were securing financial support from state and private business to support their decarbonization projects.
Notably, SSAB, one of the leading Nordics steelmakers, has secured a €2.3 billion loan to finance construction of a state-of-the-art fossil-free mini-mill in Luleå, Sweden, the company said on Tuesday April 29.
The financing package is covered by the Swedish National Debt Office (Riksgälden), the Italian Export Credit Agency (SACE) and the Nordic Investment Bank. Crédit Agricole CIB structured the transaction.
The new mill in Luleå will have a capacity of 2.5 million tonnes of steel per year with two EAFs, advanced ladle metallurgy and an integrated rolling mill.
The investment also includes a cold-rolling complex, advanced galvanizing, as well as continuous annealing and is key to re-position SSAB Europe as a maker of premium products.
The facility will be focused on flat steel production with operations scheduled to commence in 2030.
And earlier this month, Spanish future green steel producer Hydnum Steel has been granted €60 million funding from the Spanish government to support the construction of new steel plant.
The Puertollano plant, which is located south of Madrid, is projected to have initial capacity for 1.5 million tpy of hot-rolled coil. After the start-up in 2026, exthe expansion is expected to reach a combined total of 2.6 million tpy of HRC and cold-rolled coil by 2030.
Hydnum Steel has already secured the sale of 75% of its production for the first seven years of operation, through strategic agreements with major sector players such as Gonvarri Industries, Thyssenkrupp Materials Processing Europe and Knauf Interfere, Fastmarkets reported.
Published by: Julia Bolotova, Vlada Novokreshchenova
