European green flat steel premiums hold steady; Nordic countries drive demand
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.”
During the assessment week, leading European suppliers maintained the premiums for such steel at €200-350 ($206-361) per tonne.
These offers have been broadly stable during the course of 2024, but tradable values for the spot market were lower, sources said.
“When it comes to deals, especially for bigger tonnages, some discounts can be achieved – depending on supplier,” a buyer in Germany said.
Buyer sources estimated achievable premiums for green steel with such levels of emissions to be at €80-150 per tonne, but the lower end of that range was not considered to be workable by mill sources – at least for the mentioned specifications.
As a result, Fastmarkets’ weekly assessment of the green steel domestic, flat-rolled, differential to HRC index, exw Northern Europe, was €100-200 per tonne on Thursday, stable since December 12, 2024.
Market participants said there is a lack of projects across Europe requiring green steel and that demand from the key consumer – the automotive industry – has recently been slowing, in line with the general downturn in steel sales.
Consequently, demand for such steel remained subdued and highly regionalized, sources said, with Nordic countries deemed “champions” in green steel procurement.
“In Scandinavia there are many public projects requiring green steel procurement. There is an actual market for green steel,” a mill source in Europe said.
“So distributors and trading companies there are more keen to buy green; they know they can pass these costs [of green steel] down to the end user,” the mill source added.
Two other supplier sources echoed that view, and told Fastmarkets that they were selling most of their volumes of steel with reduced carbon footprint in the Nordic states.
A deal for 17,000-18,000 tonnes of green heavy plate, produced via electric-arc furnace (EAF), with cardon emissions content below 1 tonne of CO2 per tonne of steel, was reported from Bulgaria to Denmark in late December.
The premium for such steel was reported to be €150 per tonne.
European stainless flats market stagnation persists
The European stainless flat steel market is currently experiencing downward pressure, as demonstrated by the decline in coil prices observed for December and January delivery.
The market is seeing persistent overcapacity coupled with sluggish demand from buyers. Projections suggest this trend of subdued activity is likely to extend into the first quarter of 2025, according to sources across both southern and northern Europe who spoke to Kallanish.
The market has not shown any significant increase in coil and sheet stock replenishment ahead of the Christmas break. Most distributors and service centres are maintaining a back-to-back buying strategy, indicating a lack of apparent demand.
A steelmaker reports the primary challenges for coils, tubes, and sheets are a sluggish order intake for January. A re-roller says shipments are at acceptable levels, although they have diminished year-on-year. However, new orders for January are facing a decline of 50% compared to last year despite the medium-low stocks in Europe.
An Italian service centre reports limited visibility on orders, indicating a slowdown in customer activity. He confirms the absence of restocking prior to the holiday. Demand for tube products remains weak but stable, whereas demand for sheet products is showing a slightly better performance compared to tube.
In northern and western Europe, stainless cold rolled coil values for January delivery are at €2,470-2,480/tonne ($2,600-2,610) delivered, reflecting a decrease from the December range of €2,500-2,550/t delivered. By comparison, stainless hot rolled coil is priced at approximately €130-140/t lower.
Italian stainless CRC is observed at €2,400-2,430/t depending on volumes. Rough edge HRC stands at €2,100/t for large-volume deliveries, while smaller orders are priced at €2,150/t delivered. Sheet prices are not sustainable at €2,600/t ex-works; however, sources suggest lower levels are heard. Sheet prices are projected to decline in January, aligning with coils, by €20-30/t.
Natalia Capra France
European stainless steel prices down on low demand, production cuts
Fastmarkets’ monthly price assessment for stainless steel cold-rolled sheet, 2mm, grade 304, transaction domestic, delivered North Europe, was €2,600-2,650 ($2,824-2,879) per tonne on Friday, narrowing downward from €2,600-2,780 on October 4.
Three major European stainless steel mills confirmed to Fastmarkets that they had revised their production volumes for the fourth quarter, with another market source saying that others had made similar decisions.
“Demand is virtually gone, but the reduced output has helped to keep prices stable,” a trader source told Fastmarkets.
“The mills are trying to keep prices alive, but in the long term it doesn’t seem viable, price-wise,” a second source told Fastmarkets. “I expect [there to be] a drop in prices as early as the first week of November, and it could continue through to the end of the year.”
Another factor that played a role in mills’ decisions to reduce output was the expectation of increased imports of Taiwanese and Indonesian material, which were possible due to the EU import quota being reset for the fourth quarter.
“Even with [anti-dumping and anti-circumvention] duties, Taiwanese prices are much lower. If the price difference is too big, it still makes sense for them to sell in Europe,” a third trader told Fastmarkets.
“I think the import quota reset has played a part when talking about the reduced output, for sure,” a fourth source told Fastmarkets.
The alloy surcharge for grade-304 material rose on Friday.
Fastmarkets’ monthly assessment of the stainless steel cold-rolled sheet, 2mm, grade 304 alloy surcharge, domestic, Europe, was €2,077-2,114 per tonne on November 1, up by €91-114 per tonne from €1,963-2,023 per tonne a month earlier.
The assessment on September 6 was €1,999-2,051 per tonne, down by €109-111 per tonne from €2,110-2,160 on August 2.
Another factor that affected the price of stainless steel flat products in October was the slower fall in the price for stainless scrap. Fastmarkets’ weekly assessment of the price for stainless steel scrap 18/8 solids, import, cif main European port, averaged €1,162.50 per tonne in October.
This continued the downward trend that started in May-when the average was €1,430 per tonne.
Zdravko Cherkezov Sofia contributed to this story.
Consumers want green steel, state aid inevitable: Arnaud Guerendel
Given the vast cost involved, state aid is inevitable for steelmakers to be able to transition to low-emission steelmaking, while the majority of consumers have shown a willingness to pay a premium for green steel, says Vulcan Green Steel vice president of sales Arnaud Guerendel.
“Steelmakers’ limited financial sources make it questionable to transition current carbon emissions to zero, as the capex is $1 billion needed for every million tonne of steel capacity for hydrogen-based DRI and EAF route production transformed from blast furnaces,” Guerendel said during Kallanish Flat Steel 2024 in Istanbul last week. “Government aid is unavoidable.”
Some 30-35% of steel applications will be sustainable in Europe by 2035, equating to 25-35 million tonnes/year of low-CO2-emission flat products demand.
Citing a BCG survey of consumers in a few major countries, Guerendel said 57% of consumers care about net zero carbon emissions and consider this when making their next purchases of food packaging, DIY, household, and other consumer goods. When it comes to buying cars, the willingness of consumers to pay a premium for zero carbon emissions varies between 84% and 88%, depending on the type of engine (combustion engine and EV). For white goods, this willingness is at 94%.
The sensitivity and goodwill of buyers is being exploited, however. A study in Europe found that 42% of green claims were exaggerated, false or misleading, suggesting greenwashing on an industrial scale.
Scrap shortages are meanwhile also inevitable, Guerendel observed. In the best case scenario, the recyclability ratio even for the most advanced circulation system will reach only 30%. Whatever scrap trade restrictions are chosen therefore, these will not prevent a shortage.
Demand for green direct reduced iron will therefore be the primary beneficiary. DRI’s share of total metallics demand is projected to rise from the current 6% to 13% by 2050, with production expected to grow nearly five times faster than total metallics demand, reaching 320mt.
It is anticipated that by 2050, almost half of all DRI produced will be hydrogen-based. As new processing hubs emerge, it is expected that by 2050, approximately 25% of DRI supply will be traded, compared with just 7% at present. DRI exports from the Middle East are expected to reach 35-40mt, Guerendel concluded.
Burak Odabasi Turkey
