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The Kallanish...

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Kallanish Green Steel Strategies debates obstacles to decarbonisation


Kallanish Green Steel Strategies held in Brussels on 27 November debated the key obstacles holding back the decarbonisation of Europe’s steel industry, including renewable energy and hydrogen bottlenecks, legislative restrictions, financing availability and raw materials supply limitations.

High European electricity costs make steelmakers uncompetitive on global markets

Henrik Adam, vice president of European corporate affairs, Tata Steel Ltd and president of Eurofer, said that Europe was not a level playing ground on energy costs, while Stanislav Zinchenko, chief executive of consultancy GMK Center, expects steelmaking to relocate within the bloc to where low-cost energy is, noting that EU members were now also competing among themselves.

“We can assume production in the EU will move away from high power cost countries to low-cost ones,” Zinchenko said.

“We have all the ingredients with speed and the right mindset to make Europe great again,” Adam noted.

Lack of regulatory frameworks, demand-side policies hinders investment and uptake

“When we build a strategy, it cannot be a global strategy. We know what to do in India for the Indian market, we know what to do in America for the American market, we don’t know what to do in Europe because the clarity is not there,” observed Stephane Tondo, head of climate change at ArcelorMittal.

Åsa Ekdahl, head of environment and climate change at the World Steel Association, told delegates: “There are quite a lot of policy developments on the supply side but very little on the demand side," adding that not enough was being done.

Meanwhile, while some bemoaned a lack of regulation, many were critical of the EU’s Carbon Border Adjustment Mechanism in its current form.

“It’s the right tool; it needs development over many years to come … There is a lot of work still to be done," said Christoph Zinsser, head of project finance at Stegra.

Several participants also called for the scope of products to be expanded further to avoid carbon leakage, which Adam said was forcing customers to leave Europe, with finished car products then being imported into the bloc.

“We want to decarbonise but do not want to de-industrialise,” Adam asserted.

Missing ‘green steel’ definition making buyers reluctant to commit to premiums

Ekdahl pointed to the lack of a global standard for green steel as being a barrier, while Josu Piña Bilbao, director of business development at SSAB Europe, noted the lack of regulation clarity on a green steel definition.

For some steelmakers, future offtake contracts were being agreed with a premium, but for others it was not their priority, with companies reluctant to agree a premium without a set definition several years ahead of delivery.

The automotive industry was said to be a key driver of demand for green steel, while the white goods and construction sectors lagged behind for now.

Challenges, roadblocks hamper available decarbonisation optionsmany concentrated in certain regions

The supply of high-quality scrap and potential trade barriers could hamper the growing adoption of EAFs, panellists noted.

“There’s not enough clean scrap around,” noted Metalshub co-founder and managing director Sebastian Kreft.

Daniel Pietikainen, trade and environment officer at the Bureau of International Recycling, said trade barriers could discourage investment in scrap processing and see scrap suppliers exiting the supply chain.

Europe is currently the epicentre for announced decarbonisation projects, but the US and the Middle East are catching up. However, the EU will not be a cost competitive location for hydrogen reduction.

Most panellists agreed that hydrogen will not be shipped, regardless of logistics costs. Instead, hydrogen hubs would become iron hubs, with green iron being a cost competitive material which can be shipped to steelmakers without resources available locally.

On carbon capture and storage, a panellist from Transition-Asia noted that the costs and risks outweighed the benefits.

On hydrogen availability, amid project delays and high costs, Anna Pekala, market director green energy transition at Ramboll, said the EU’s plans to annually import 10 million tonnes of hydrogen and produce the same amount domestically by 2030 were “unfortunately very unlikely.”

“The realistic capacity will be at only 25-30% of that. Not more than 50-65 GW of installed capacity of electrolysers,” she added.

On metallics, the supply of different grades of iron ore would likely become a challenge for miners and steelmakers.

“The mining companies are desperately looking for solutions for lower to mid-grade iron ore. In the future, they will end up in an oversupply, while the higher-grade iron ores are already looking at an undersupply,” said Alexander Fleischanderl, Primetals chief technology officer & head of green steel.

US scrap foreseen settling sideways to down


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Italian crude output increases


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Lisco, Danieli advance DRI project: reports


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Benelux scrap stabilises amid thin inflow


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Interpipe supplies pipe for Ukraine’s energy sector


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LatAm steel exports to US surge in October


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Vale explores EV integration in partnership with BYD


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Egypt's Suez Steel plans Africa's first rail mill


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Godo Steel to modernize Himeji plant rolling mill


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Severstal decreases domestic river shipments


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Aperam decreases alloy surcharges


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Steelmaking minerals production rises in South Africa


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Vietnam's Hoa Phat reduces domestic HRC prices


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Turkey eyes 70% capacity utilisation in 2025


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India mulls safeguard duty ahead of FTA meeting


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India government will not decide vehicle scrappage pricing


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Turkey’s economic confidence, GDP fall sequentially


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Turkey’s Tosyalı finalises Bastug acquisition


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With...

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Tangshan billet prices tick higher as inventories decline


Tangshan billet prices ticked higher on Monday as market inventories declined, albeit slower, and steel futures prices moved higher, Kallanish notes.

Spot Tangshan billet was assessed at CNY 3,180/tonne ($437/t) on Monday afternoon, up CNY 30/t week-on-week, while the most traded January 2025 rebar contract on the Shanghai Futures Exchange rose by CNY 36/t.

Market inventories of Tangshan billet declined 32,600t w-o-w to 791,700t on Monday, a reduction in pace versus the previous week's drop of over 70,000t. Increased local supply and worsening re-rolling margins accounted for the slower pace of decrease.

Softening long steel products sales saw two Tangshan local mills increasing supply of billet w-o-w, while hot metal production remained at a high level.

Meanwhile, the fourth round of coke price reduction has been postponed.

Orderbooks for flat products at mills did not improve compared to the earlier week, according to market sources.

Some re-rollers continued production suspensions at the start of the week due to high finished products inventories.

Forwards billet, for January to March delivery, were offered at CNY 10-15/t higher than spot, which was unattractive for traders, while market participants remained cautious amid recent volatility.

One trader says he prefers to hold on to spot billet and wait to hedge when steel futures are lower, rather than holding a long-term position.

Fenix to increase strategic investment in Athena


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Leader Steel reports loss on lower margins


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Melewar posts quarterly loss amid lower steel prices


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Stellantis' chief executive resigns with immediate effect


European carmaker Stellantis announced on Sunday evening its board of directors accepted the resignation of chief executive officer Carlos Tavares with immediate effect, Kallanish reports.

“Stellantis’ success since its creation has been rooted in a perfect alignment between the reference shareholders, the board and the ceo. However, in recent weeks different views have emerged which have resulted in the board and the ceo coming to today’s decision,” explains Stellantis’ senior independent director, Henri de Castries.

A new permanent ceo will be appointed in the first half of 2025, as a search process is “well underway,” the carmaker says in a statement. Until then, the company will be led by an interim executive committee chaired by John Elkann, current chairman.

“Together we will ensure the continued deployment of the company’s strategy in the long-term interests of Stellantis and all of its stakeholders,” the chairman says. He has also thanked Tavares for his “years of dedicated service” and the role he played in the creation of the company, a merger of Fiat Chrysler Automobiles and Peugeot S.A.

The news follows the announcement of a Stellantis plant closure in the UK and a month-long production stoppage at a plant in Italy. The group is also facing major headwinds in the US, including a lawsuit due to collapsing profits.

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Japanese PM encourages Biden to approve Nippon/USS deal


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Canada construction output continues monthly expansion


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German scrap exports continue to decrease


Germany’s ferrous scrap exports decreased in January-September, according to new data from the German federal statistics office.

Exports totalled 5.4 million tonnes, down 10% on-year, and were worth €2.9 billion ($3.06 billion), Kallanish notes.

In the full-year 2023, exports totalled 7.61mt, down 3% on-year. This was the lowest export volume since the economic and financial crisis of 2009.

Shipments to Switzerland and Belgium fell the most, while deliveries to India increased.

Scrap imports last year fell by 20.7% to 3.48mt.

In terms of quantity, scrap exports to India in January-September fell the most during the reporting period. Deliveries to Italy, the Netherlands and Turkey also fell significantly.

German steel recyclers federation BDSV said in September it is pessimistic about the coming year, according to its annual industry survey (see Kallanish passim).

Due to the lack of investment momentum in the German economy and the stuttering transformation of the industry, scrap demand will not exceed supply, it noted.

BDSV and its non-ferrous counterpart VDM has previously emphasised the importance of relations with India with respect to raw materials trade. A strong partnership could develop joint environmental and labour standards, and lower trade barriers, the associations said during a meeting in New Delhi.

German scrap prices have decreased in November due to low domestic demand and limited exports (see Kallanish passim). Most sources expect trade activity to be weak next month, with possible additional declines.  

Nationwide average German prices for old thick scrap sort 3 are at €305/t, while new scrap sort 2/8 was at €308/t and E40 shredded scrap at €310/t.

Iron ore holds steady in November amid fluctuations


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Turkish scrap prices falter on fresh deals


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Feralpi Germany secures oxygen supply through Air Liquide


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Russia boosts scrap export quota to 650,000t


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Italian scrap prices could change direction following rises


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Vietnamese HRC market prepares for anticipated duties


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Turkey’s October steel imports soar as exports fall


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Austria’s steel production rebounds in October, down on-year


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Regional conditions inform decarbonisation technology choices: conference


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Chinese scrap prices remain stable


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Turkey's scrap imports dip in October


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Russia cancels export duty on coking coal


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Weak demand dampens Pakistan's scrap market activity


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Blastr signs supply deal with Interfer Edelstahl


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China's rebar gains despite rising inventory


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Italian plate producers push up prices


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EU lacks decarbonisation regulation, demand-side policies: panellists


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Argentina's October primary iron production grows sequentially


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Brazil's pig iron price stabilises, production rises


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India remains net importer in April-October: JPC


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ASEAN billet market slides amid demand weakness


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Taiwan increases Fujian Kaijing galvanized steel AD rate


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Chinese coking coal prices slip further, coke stable


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Yusco, Tang Eng cut stainless offers for December


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Italian wire rod producers seek increases


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India's imported scrap demand stagnates


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Chinese lithium hydroxide exports down 24% in October


Chinese lithium hydroxide exports declined 23.7% year-on-year in October, with the average exporting price collapsing 70%, Kallanish reports.

The Asian giant shipped 7,831 tonnes of the battery raw material, a volume that is also 38% lower than in September. The value of these exports reached $99 million, which is 77% less than in the same period last year.

The average price dropped 70% y-o-y to $12,604/tonne, according to customs data.

South Korea, Japan, Germany, India and Taiwan, China were the top five importers of lithium hydroxide from China. Battery manufacturing powerhouses South Korea and Japan took the bulk of shipments at 5,771 t and 1,696 t, respectively.

The data shows South Korean battery makers accounted for nearly 74% of all lithium hydroxide exports from China, while Japan had a market share of 21.6%.

Meanwhile, Chinese companies imported 492 tonnes of lithium hydroxide, representing an 86% on-year increase.  

The imports amounted to $7.9 million, an on-year increase of 40.4% and an on-month drop of 54.33%. Yet, the average price of imports reached $16,102/t, which is 24.6% lower than in October 2023. It’s also over 35% cheaper than in September.

Australia, the US and South Korea were the top three product sources, accounting for 44%, 35.6% and 20.3% respectively. Their average import prices are $8,726/t, $29,776/t and $8,100/t. 

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Huaxinyuan Steel orders long rolling line from Danieli


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Lion Industries reports higher losses amid lower revenue


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Masteel's profit surges on improved margin


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German bank agrees €24 billion loan for hydrogen core network


Amid concerns that the EU’s energy transition goals are heading towards a reset, Germany provided good news for the hydrogen industry, with a new milestone in its hydrogen network.

State-owned bank KfW signed off a €24 billion ($25.3 billion) loan to finance an “amortisation account” that the government will provide for the implementation of the core network. Berlin said last month the 9,040 kilometres of pipeline will be financed privately by network operators.

However, due to high investment costs and a cap in network fees, to ensure affordability to users from the outset, initial revenues will be low. KfW says it will provide the necessary compensation payments for the amortisation account, and as soon as the network operators’ revenue exceeds costs, the additional revenue will be returned to the amortisation account.

“The construction of the hydrogen core network is a pioneering and crucial project for the ramp-up of hydrogen that is as green as possible,” comments KfW chief executive Stefan Wintels. “A successful transition to hydrogen is particularly critical for energy-intensive industries.”

He explains that the amortisation account will play a key role, making a “significant” contribution to a “viable” financing concept for the hydrogen infrastructure, which should come online by 2032. The mammoth project consists of the repurposing of existing natural gas and the construction of new hydrogen lines.

It will connect potential hydrogen production sites to key industrial centres to enable industrial use. This part, however, is another challenge that companies and governments must address if climate targets are to be met.

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Steelmakers should avoid costly, risky CCS: Transition Asia


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EU steelmaking to relocate to low-cost energy: Zinchenko


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Turkish pipe producers cut export quotes further


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NLMK Lipetsk revenue increases, profit falls in January-September


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Iron ore holds on mixed sentiment


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Italian re-rollers plan production cuts, coils trend higher


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EU waste regulation could hamper EAF steelmaking: Pietikainen


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Numsa ends strike after agreement with AMSA


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Russia continues to increase car production in October


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Turkish longs decline further, market questions bottom


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Chinese rod export prices fall on weak demand


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German stockholders’ sales bottom out in Q3


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