Heavy plate and hot rolled coil demand will continue this year from the shipbuilding sector, but the issue of reducing the carbon footprint of steel products procured will come more into focus in the coming years, European shipbuilding sector sources forecast.
Companies are looking to diversify their source of supply between electric arc furnace and blast furnace route steel, according to carbon footprint, and will be ready to pay a premium for greener, high-quality plate and coil.
Large plate buyers in Europe have found alternative sources of supply since war broke out in Ukraine, a major supplier. The international diversification of most European firms’ supply chains has helped secure required volumes. Shipbuilders throughout Europe have a significant order backlog for the coming years, sources observe.
“We are doing that [securing alternative supply] in a relatively short period of time … The point is to establish what is the real balance in terms of their [mills’] capability compared to our need for finished product. In that sense, the full transparency and visibility we get from our suppliers throughout the entire supply chain was key to giving us the assurances we needed,” one source tells Kallanish.
Since the beginning of the conflict, some companies have worked closely with their suppliers, also supporting them in procuring slab. Transparency is a key element in the relationship with platemakers when setting up procurement rules.
Because of disruption in the value chain, some firms had to review their procurement mix, shifting some volumes from plate to HRC. When availability dropped and prices skyrocketed, “we were able to try to change the balance and move some quarto plate procurement volumes to coils”, the source comments.
Natalia Capra France