Van Merksteijn puts mill construction on hold

European wire rod processor Van Merksteijn has put construction of its new integrated green steel EAF mill in the Netherlands on hold due to the uncertain economic climate in Europe, its commercial director told S&P Global Platts Thursday.

“We decided to suspend for now our project mainly because of nitrogen issues, as a result of a recent decision issued by the Dutch Council of State, potential carbon dioxide taxes, and the overall insecurity linked with the trade war,” Kris Van Ginderdeuren said.

The company wanted to concentrate on its core business, which has been hit by measures for imports of wire rod implemented by the European Commission, he said.

In May, the Dutch Council of State ruled that the Dutch Government Nitrogen Approach Program was not effective enough, resulting in hundreds of central government projects needing to be reviewed and putting restrictions on private funding projects.

In February, the EC put quotas on imports of several steel products to avoid steel re-directions after the US implemented Section 232 tariffs on steel. One of the products under quota is wire rod, the main business for Van Merksteijn which is the largest independent transformer importer of rod into the EU with an average of 800,000 mt of rod imported each year.

“We really need to stay focused on our imports and look into EC regulations, so we cannot look into other large project in particular with all new emission restrictions in Netherlands. Obviously, this mill would have made a valuable contribution to the circular local economy and it would have created direct employment for 300 people. So we are very disappointed,” Van Ginderdeuren said.

“As soon as there is more clarity concerning international trade relations, the national and international development of carbon dioxide legislation and adequate governmental solutions for the permit issues, we could carry on [with construction of the new mill],” he said.

Van Merksteijn decided in 2017 to build its own EAF mill in Groningen to transform regional scrap into wire rod, mainly to supply its Almelo plant with raw material.

Van Merksteijn International is a family-owned company with a total rod transform capacity of 2.3 million mt per year and a workforce of over 1,000 people in its subsidiaries in Almelo (NL), Dendermonde (BE) and Saint-Pourçain-sur-Sioule (FR).

— Annalisa Villa