Willingness to pay premiums for steel with reduced carbon emissions content was still limited among European buyers, however.
There was a lack of projects across Europe requiring green steel, market participants said, and demand from the key consumer – the automotive industry – has recently been slowing in line with the general downturn in the European economy.
“We can’t reverse the green steel transition,” a distributor in Germany said. “The market is moving in that direction and the demand will come – it’s just a matter of time. But in a recession, sustainability becomes a secondary problem for buyers.”
A buyer once again pointed to a lack of clarity and standards for green steel in Europe, which was slowing its uptake across supply chains.
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.”
And Fastmarkets’ weekly assessment of the green steel domestic, flat-rolled, differential to HRC index, exw Northern Europe, was €80-200 ($84-210) per tonne on December 5, stable week on week.
During the assessment week, leading European suppliers kept the premiums for such steel at €200-350 per tonne.
Buyer sources estimated the achievable premiums for green steel with that level of emissions at €50-150 per tonne, although the lower end of that range was not considered workable by mill sources.
Bids were reported at €80 per tonne during the week for steel that was carbon neutral for Scope 1 & 2 emissions. But a market source said that such bids were rejected by the seller.
One mill source estimated achievable values at €100-200 per tonne for steel produced with Scope 1, 2 & 3 emissions at a maximum of 0.8 tonne CO2 per tonne of steel.
Wider market
The European market was taken aback by recent news of ArcelorMittal’s announcement that it would postpone a final decision on several investments in direct-reduced iron (DRI) modules across Europe due to challenging market fundamentals.
Meanwhile, despite the challenging times, some buyers continued to invest in green steel and raw materials purchases, expecting demand for steel with reduced carbon emissions content to rise exponentially in the years to come.
GreenIron-Scandinavian Steel
Scandinavian Steel, a leading distributor of metals in the Nordic region, and GreenIron, a Swedish green iron startup, signed a collaboration agreement on December 2.
Under this agreement, Scandinavian Steel will become the exclusive distributor of GreenIron’s fossil-fuel-free iron, which is to be produced in Sandviken, Sweden.
“The agreement covers a regular delivery of hydrogen [produced] DRI, which will be offered to the Nordic and European markets,” a press release read.
GreenIron was expected to begin commercial production of green DRI in Sandviken in 2025. The DRI plant there will have capacity for 28,000 tonnes per year and will use hydrogen as a reducing agent.
Blastr-Interfer
On November 28, Nordic green steel startup Blastr and German steel trader Intefer Edelstahl Group signed an offtake agreement for supply of 150,000 tonnes per year of ultra-low carbon emission steel products.
Deliveries were expected to commence in late 2029, Blastr said in a press release at the time.
Blastr expected to produce hot-rolled coil-grade steel with carbon emissions of less than 500 kg of CO2 per tonne of steel, including Scope 1, 2 and 3.
Blastr and Interfer will start discussions on a binding agreement early in 2025.
Established in 2021 with the aim of becoming an integrated low-CO2 steel producer, Blastr planned to produce around 2.5 million tpy of hot- and cold-rolled steel.
Final investment decisions on both a DRI plant and a steel plant were expected by early 2026.
