German mills welcome incoming government’s strategy
German steel federation WV Stahl has welcomed in principle the signing of the “Coalition Contract” between the coalition partners forming the future German government. The association emphasises power prices and the associated grid fees are the top issue the new government must address.
The coalition of the conservative CDU party, social democrat SPD party, and the Green Party presented the agreement last week, outlining the issues it plans to tackle. Among the pledges is the reduction of power prices and grid fees.
This is a step in the right direction, but measures are needed to tackle basic market prices, which are too high in Germany to be internationally competitive. “What we need is a dedicated industry power price we can rely on,” Kallanish reads in the federation’s statement. It points to France and Italy as the models for this.
Another point of the Contract is that the parties intend to keep pushing the promotion of hydrogen. “We are especially pleased with the openness for a variety of hydrogen colours,” says WV Stahl managing director Kerstin Maria Rippel.
The coalition also pledges to promote the continuation of EU safeguard measures, which are imperative considering that one third of the steel used in the EU comes from third countries. Related to that, the federation hails the Contract’s clear message to protect from imports by means of the Carbon Border Adjustment Mechanism (CBAM). This needs to be widened to the larger value chain, as was worded in the EU’s Steel and Metals Action plan, Rippel notes.
WV Stahl furthermore underlines the coalition’s decision to consider steel scrap in the Contract, to facilitate the domestic supply of this important feedstock.
Last but not least, the statement addresses Germany’s Special Fund for Infrastructure that was announced a week earlier. WV Stahl warns that the money must be spent with a focus on strengthening domestic industry, and that the government needs to push ahead with creating lead markets for CO2-reduced products.
US duties cause gloom in Germany: WV Stahl
The announcement by US President Donald Trump of a new set of duties – a general 10% for most countries but 20% for the EU – has rung alarm bells in Germany’s steel industry.
It was a “day of gloom for trans-Atlantic trade,” says Kerstin Maria Rippel, managing director of steel federation WV Stahl.
More than any other European country, Germany depends on exports, with many goods sent to the USA containing steel, she points out. Indirect steel exports through products such as machinery or tools add up to a steel volume of 2.4 million tonnes, Kallanish hears.
German machinery makers and plant builders association VDMA underlines the short-sightedness of Trump’s measures. Importing US manufacturers need machinery suppliers from abroad for certain key technologies, representing cooperation that has existed for decades, VDMA notes. In a poll made among members, 60% of the companies stated that they will be hit, or even strongly hit, by the new US tariffs.
Meanwhile, thyssenkrupp Steel Europe and Salzgitter have called for the European Commission’s Steel and Metals Action Plan to be implemented as swiftly as possible to shield the sector from the US tariff measures, Reuters writes. Their claim was brought forward at a virtual meeting with European Commission President Ursula von der Leyen held on Monday.
The steelmakers also called for an introduction of binding minimum quotas for “European content” in private and public procurement in order to strengthen domestic markets, one participant said.
German steel output increases, remains below historic norms
Crude steel production by German mills in 2024 was 5% higher than the year before, totalling 37.2 million tonnes, according to national steel federation WV Stahl.
Still, the overall production activity in Germany remains broadly in recession mode, WV Stahl notes, as output has been lower than 40mt for three years in a row. Other economic data contribute to a gloomy picture, Kallanish hears from the federation. Demand remains at a critically low level, and market supply has hit a historic low with an annual total of 27mt of finished products, 7% less than 2023.
Since 2017, the German market lost one-third of its previous volume, in contrast to overseas economies and other industrial EU nations, WV Stahl points out. With a view on the upcoming governmental elections, managing director Kerstin Maria Rippel calls on policy-makers to take measures to lead Germany back to strength as an industrial powerhouse.
The country hurts especially from the combination of low-priced imports and uncompetitive costs for electricity, Rippel says. The grid fees alone last year imposed extra costs of €300 million ($313m) for steelmakers. With US President Donald Trump taking office, Germany and the EU can no longer hide behind the argument of World Trade Organisation compatibility, she says.
In detail, crude steel production on the oxygen-route rose by 3.3% to 26.4mt, whilst EAF production went up by 10.2% to 10.8mt. The EAF-route increase is stronger, as 2023 was affected by an unusual temporary peaking of power prices, which lead to reduced activity.
That same effect can be seen in the figures for December 2024, when EAF production fell 3.1% year-on-year. Germany’s power supply was again affected by peaking prices due to a shortfall in renewable energy last month and again this month.
Christian Koehl Germany
Study finds German steel industry at crossroads
A German study has underlined the importance of steel for the country’s industrial networks, its economic resilience and the strength of its small and medium-sized enterprises (SMEs). It also unearthed concern over the progress of the low-emission technological transition being carried out by mills.
The study, published earlier this month, was assigned by steel federation WV Stahl to consultancy Oliver Wyman and economic research institute IW Consult. A poll among 192 steel users showed that Germany as a steelmaking location is at a crossroads. Companies are increasingly expressing doubt over whether the technological transition will be successful. Failure, however, would have profound repercussions on investments and jobs for steel-using industries, Kallanish reads in the study.
“A regional steel industry is essential for the competitiveness of subsequent industries – as an incentive for innovation, higher sustainability standards, or in facilitating quality advantages,” says Hanno Kempermann, managing director of IW Consult. “If the steel industry relocates, many of the subsequent industries will reduce their production sites in Germany.”
In figures, the study states that 23% of the production value of the entire German manufacturing industry is generated by steelmakers, their suppliers, and their customers. This equals a value of €1,818 billion ($1,890 billion). SMEs, especially, are major players in the chain. Roughly half of the value generated by SMEs is connected to the “Value Chain Steel Network,” as the authors call it.
Over 60% of companies emphasise that the dense network of the country’s steel value chain provides a platform for targeted research & development activities. Only 14% believe the transition can be carried out as scheduled by 2035. One major hurdle for the transition is high energy prices, said 81% of participants.
Christian Koehl Germany
WV Stahl: German August crude steel production up 0.5% on year
German crude steel production edged up 0.5% year on year to 2.9 million metric tons in August, according to data published Sept. 24 by German steel federation WV Stahl.
However, the volume was down 8.6% month on month, according to the data.
This brought January-August crude steel production from German mills to 25.4 MMt, up 4% year on year.
Of the total August volume, 2.1 million was produced from blast furnaces, down 0.1% year on year, and down 9.1% from July.
This brought the total for the eight-month period to 18 MMt, increasing 2.2% year on year.
According to WV Stahl, German crude steel production from electric arc furnaces in August totaled 734,000 metric tons, up 2.3% year on year but down 7% month on month.
Output from EAFs over January-August also increased 8.6% year on year to 7.4 MMt.
Meanwhile, Germany produced 2 MMt of pig iron in August, up 0.3% year on year, but down 7.4% form the previous month, bringing the eight-month volume to 16.55 MMt, up 2.4% year on year.
Output of hot-rolled steel products in August dropped 3.1% year on year and 9.6% from July to 2.35 MMt, with the January-August volume up 2.6% at 21.7 MMt.
Platts, part of S&P Global Commodity Insights, assessed domestic HRC prices in Northern Europe at Eur555/mt ex-works Ruhr Sept. 23, down 20% since the start of 2024.
Gunnar Groebler new president of Wirtschaftsvereinigung Stahl (WV Stahl)
The German Steel Federation (WV Stahl) has elected Gunnar Groebler, CEO of Salzgitter AG, as its new honorary president. He replaces Bernhard Osburg, who has resigned from the position.
Groebler expressed his commitment to preserving the competitiveness of the German steel industry and ensuring its future viability, especially in light of the current challenging market conditions. Osburg thanked the WV Stahl team for their support and wished Groebler success in his new role.
“I thank the Board of WV Stahl for their trust and look forward to shaping the future of the German steel industry in this role. Bernhard Osburg has done important and energetic work and provided valuable impetus under the currently extremely difficult market conditions. My task now is to do everything I can to preserve the acute competitiveness of our industry and to advance its future viability,” said Gunnar Groebler.
Bernhard Osburg on his departure: “It has been an honor for me to represent the steel industry in Germany as president of WV Stahl. I have been passionate about this industry for 25 years and the association is a political interest group that is focused on our pressing issues and does not need any distractions. I thank the entire WV Stahl team for their professional support during my tenure and the management for the excellent cooperation. I wish Gunnar Groebler every success and a happy hand in his new task.”
Germany introduces new green steel certification standard
The LESS certification was introduced on Monday April 22 at an industry event in the Hannover Messe and announced more widely in a WV Stahl press release.
It was said to be the first standard for the steel industry that allows for tracking and comparing emissions from two key steelmaking routes: the conventional blast furnace route in the transition to low-emitting hydrogen-based production processes, and the electric-arc furnace route. The system therefore enables comparisons of the decarbonization efforts of both steelmaking methods.
LESS was developed by WV Stahl and its member companies and is supported by the BMWK.
The core part of the LESS standard is the labelling system, which allows for classification of low-CO2 steel by carbon intensity, using a graduated scale.
According to the LESS standard, low-emission steel can be grouped into five categories – A,B,C,D,E – depending on carbon and scrap content.
Steelmaking companies that would like to get LESS certificates would have to report their scrap content and Product Carbon Footprint (PCF) in the finished steel product, in accordance with an Environmental Product Declaration (EPD).
This EPD would be provided by independent certification bodies TÜV Nord and DNV.
“The definition of green steel has long been the subject of intense debate worldwide,” WV Stahl president Bernhard Osburg said. “I am delighted that, by joining forces, we have succeeded in developing a widely agreed solution based on international standards which we are now putting into practise. This will provide steel clients with all the information they need to achieve their CO2 reduction targets with the help of low-emissions steel.”
He also emphasized that the LESS standard will help steel-using companies to obtain initial funding for transformation projects.
The introduction of LESS was supported by stainless steel producer Swiss Steel Group.
“LESS creates transparency through a uniform labelling system and a step-by-step classification of low-CO2 steel, and enables steel users to achieve their climate targets with the help of sustainably produced steel,” Swiss Steel Group said on April 24.
The LESS standard was created for international cooperation, so industry sources hoped that it would help to achieve a more unified approach to pricing low-carbon steel and that this would help to promote its uptake across supply chains.
Industry sources estimated that the volume of green steel traded in Europe in 2023 was no higher than 50,000 tonnes, with very few suppliers able to offer “physically produced green steel, with emissions proven by Environmental Product Declarations [EDPs],” according to one distributor.
Fastmarkets’ most recent weekly assessment of the green steel domestic, flat-rolled, differential to HRC index, exw Northern Europe, was €150-250 ($160-267) per tonne on April 18, unchanged since mid-December.
German mills discontinue scrap pricing survey
A regular monthly scrap pricing survey compiled from data collected at Germany’s steel mills has been discontinued by steel federation Wirtschaftsvereinigung (WV) Stahl at the end of 2015.
The survey has existed longer than the monthly survey by recyclers’ federation BDSV, which is compiled from input by scrap merchants. Often, the surveys’ results gave diverging information.
“The amount of publicly accessible price information has risen in recent years. Given the selection of such sources we have decided to stop our investigations in this regard,” WV Stahl tells Kallanish by way of explanation.
Market players from the scrap collecting industry had often argued that the prices given by WV covered only parts of the industry and were therefore not representative. “Apparently, two or three mils had stopped participating in those statistics,” one market source tells Kallanish. Others argue that the monthly average figures were overlapping and thus did not reflect the market adequately. They bemoan the fact that the prices were used as a basis for calculation by the automotive industry, or to define scrap surcharges in the past.
When WV Stahl announced that it was discontinuing its service, some mills had temporarily considered setting up a scrap pricing service themselves in recent months but this has not happened. “It is not all that easy. BDSV needed two years before it got its service up and running properly,” one source says. BDSV’s data are double-checked by an external institute which crops statistical outliers to arrive at credible figures, the source adds.
Kallanish