The high level of electricity prices in Germany is the main hurdle for the transition to low-emission steelmaking, says ArcelorMittal Germany chief executive Thomas Bünger.
A price of €50-55 ($57-62) per MWh “would be the measure of things”, Bünger notes in an interview with broadcaster RBB about the prospects for the group’s Eisenhüttenstadt mill. “That was the price before the energy crisis, and we need to get back there, but we are very far away from it.”
Bünger says Eisenhüttenstadt saw temporary production breaks in December, when spot price for power skyrocketed to a record mark of €850/MWh. “Such interruption deals us a heavy blow, as it brings into question our reliability for timely deliveries to the customers,” Bünger observes. He notes capacity utilisation was high at the time and the interruption harmed production flow. The mill also has enough orders to maintain full utilisation in the first half of 2025.
It is not without irony that the mill’s own power production from off-gases would bring more profit if sold to the market than being used to make steel for sale. Bünger emphasises that this is by no means planned, as the company’s main wish is affordable power prices to facilitate a reliable framework for steel production, Kallanish notes.
“Decorbonisation requires a conversion of the primary steel making route from blast furnaces to electric arc furnaces,” he notes. But no blast furnaces means the loss of in-house generated electricity, whereas EAF operation would put the mill at the mercy of erratic market power prices.
The company therefore expects quick measures from the new German government to initially reduce the power grid fees back to the level of 2023. “This could be arranged in a short time, would not cost much, and would mean a good first step,” Bünger says.
Christian Koehl Germany
