Sweden’s H2 Green Steel to supply UK’s SPM in 5-year deal

H2 Green Steel signed a five-year agreement to supply its green steel to the UK-based steel service center Steel Processing (Midlands), the Swedish steelmaker said April 24.

The green steel will be delivered from H2 Green Steel’s flagship plant in northern Sweden and will amount to 25% of SPM’s annual volumes, in a deal valued at about Eur125 million ($137million), the company said.

SPM is an independent steel flat processor with a capacity of around 100,000 mt/year of steel products with customers mainly in the UK automotive and construction industries.

“This agreement demonstrates leadership by SPM in its market segment, and it is a clear sign that businesses of all sizes are validating the business case for sustainably produced steel,” said Mark Bula, Commercial Head of Steel, H2 Green Steel. “For us, this is a landmark in terms of the English steel market, and we are very impressed by SPM’s progressive approach.”

H2 Green Steel was launched in 2021 with the aim of accelerating the decarbonization of the steelmaking process with the construction of a specialized steel plant in Boden. Initial production is expected to be 2.5 million mt/year from 2025, potentially increasing to 5 million mt/year by 2030, while removing up to 95% of carbon emissions compared with traditional steelmaking using a blast furnace and iron ore. The founder and largest shareholder of H2 Green Steel is Vargas, which is also a co-founder and one of the larger shareholders in Swedish battery maker Northvolt.

Platts, part of S&P Global Commodity Insights, assessed weekly steel hot rolled coil on April 20 down by GBP15/mt ($18.70/mt) to GBP780/mt DDP West Midlands UK.

Author Annalisa Villa, annalisa.villa@spglobal.com