Liberty Dunaújváros, the Hungarian steelworks owned by Liberty Steel and previously known as Dunaferr, has signed a contract with CISDI Engineering to finalize the feasibility study that will lead to the installation of an electric arc furnace, according to Liberty Steel.
CISDI, a Chinese company offering engineering, procurement and construction services to the steel industry, will supply a 1.5 million mt/year EAF using its patented technologies, Liberty Steel said in a May 16 statement.
Liberty Steel in September 2023 signed a memorandum of understanding with the Hungarian government and CISDI to re-equip the met coal-based plant in Dunaújváros with electric arc furnace technology.
The ensuing contract signed in Shanghai underpins Liberty Dunaújváros’s transformation from a blast furnace-based steelworks to an EAF mill. The scope of the project will also including the installation of secondary metallurgy units and hot strip mill upgrade required to produce coil products for the automotive sector.
Swapping the existing furnaces for an EAF will not affect the Dunaújváros mill’s capacity. Equipped with the two blast furnaces, it can make up to 1.2 million mt/year of melt iron and 1.6 million mt/year of steel, but its transformation will reduce direct CO2 emissions by 80%, Liberty Steel said May 16.
The furnaces at the Dunaújváros steelworks remain idle. It is currently operating its rolling mills on a campaign basis, but aims to restart one blast furnace once the market conditions allow, a UK-based spokesperson for Liberty Steel told S&P Global Commodity Insights May 17.
The project has the support of the Hungarian and Chinese governments and will be funded by Chinese banks led by CITIC Bank and backed by China’s Export and Credit Insurance Corp., or Sinosure.
First Chinese EAF in Europe
Liberty Steel does not disclose the cost of the project, which includes the first EAF in Europe built from Chinese equipment.
“There is a rolling mill in Albania, Kurum, that was supplied by a Chinese company, but I am not aware of any other European steelworks based on Chinese equipment,” a source close to one of the European steel plant manufacturers told Commodity Insights. “Liberty’s supplier choice is down to cost. It’s 30% cheaper to source equipment in China than to order it from the likes of Danieli or Primetals.”
Chinese steel companies themselves often choose to import EAF technologies from the EU, he added.
“[Dunaújváros] will be the first China-made EAF in Europe, but China has a lot of expertise in making steel, including via that route, so this should not be a concern,” Marcel Genet, managing director of Paris-based consultancy Laplace Conseil, told Commodity Insights.
“The idea that no quality strip could be made in scrap-fed EAFs is supported by integrated steel producers, while one of the best quality strip manufacturers, Arvedi, has been making its products from EAF steel for decades,” Genet said. “High purity scrap and up to 20%-30% of imported direct reduced iron in the furnace charge will enable a quality fine enough to suit automotive applications.”
The Dunaújváros reconstruction — in the range of other investments — is owed to Hungary, along with Serbia, being picked by the Chinese authorities, as strategic partners for its Belt and Road Initiative, Genet said.
Following their May 9 talks in Budapest, President Xi Jinping and Hungarian Prime Minister Viktor Orbán committed to elevate the China-Hungary relationship to a strategic partnership, advancing cooperation in clean energy and infrastructure, including the modernization of the railway between Budapest and Belgrade as part of the Belt and Road Initiative, China’s Ministry of Foreign Affairs says on its website.
Katya Bouckley
