Trading activity in the European sheet metal market remained low during the week until Thursday, June 18, with market participants reporting a lack of mass demand due to a lack of regulatory pressure. However, some manufacturers continued to raise prices in individual deals.
Fastmarkets defines environmentally friendly steel as a material with a combined level of carbon emissions of 1, 2 and 3, which does not exceed 0.8 tons of carbon dioxide (CO2) per ton of steel produced.
One seller reported receiving premiums in the range of 180-200 euros (207.10–230.11 US dollars) per ton in transactions with customers who committed to purchase a share of low-carbon material.
According to one of the manufacturers, purchases of rolled products made of environmentally friendly materials are combined with purchases of traditional gray materials. And although the share of "green" material in the total volume of purchases is small, the total cost of the premium does not feel punitive.
However, the manufacturer does not see any demand for green flat rolled products.
Fastmarkets' weekly estimate of prices for domestic flat rolled "green" steel with a differential to the HRC index for Northern Europe (exw, Northern Europe) on Thursday was 0-200 euros per ton, an increase of 50 euros from 0-150 euros per ton in June 11.
Despite the fact that business has been weak, lobbying has intensified in recent weeks, including in early June, Transport & Environment (T&E) advocated the inclusion of low-carbon steel loans in EU automotive industry standards as a mechanism to support the introduction of environmentally friendly steel.
This week, three leading European steel producers – ArcelorMittal Europe, thyssenkrupp and voestalpine – jointly called on EU policy makers to halt the rising carbon costs of the Emissions Trading System (ETS) until low-carbon steel production becomes economically feasible.
Manufacturers, who collectively account for about 60% of total European steel production, have warned that the current ETS dynamics could undermine the region's industrial base unless adjustments are made.
Under current conditions, the cost of steel production in the EU could rise by about 50% by the early 2030s, while steel imports are not subject to equivalent carbon costs, and exports from the EU are not compensated, creating a competitive imbalance.
Three companies estimated that without the reform, steel-intensive manufacturing activity in the EU could decrease by 30-40%, putting as many as 5 million jobs at risk along the value chain, and undermining the bloc's intention to raise production overall.
