European premiums for "green steel" are stable; economic problems limit the interest of buyers
European green steel premiums remained unchanged due to muted ongoing economic problems in the region, Fastmarkets sources said on Thursday May 15.
European buyers told Fastmarkets that sustainability is currently a "secondary concern, while the steel industry must operate in survival mode."
As long as the deadline for the implementation of the agreements is, the sources say that there is still demand for "green" steel goods for 2026-2027 and beyond, adding that they expect demand for decarbonized steel to be collected in the long term, driven by new regulations.
"Green steel production is increasing, but the pace is slower than we expected," a source told a buyer in Europe.
The new Green steel capacity in Europe will mainly be represented by EDP and iron direct Reduction (WDR) modules, with approximately 40-50 million tons of new steelmaking capacity expected to be launched in 2026-2027, according to Fastmarkets estimates.
In the spot market, willingness to pay insurance premiums for low-carbon steel remains low among European buyers.
The sources once again pointed to the lack of clarity on green steel standards in Europe, slowing down its assimilation across supply chains.
(2:Methodology 1)Fastmarkets’ defines European Green Steel "Steel is produced with a volume of 1, 2 emissions & 3 at a maximum of 0.8 tons of CO2 per ton of steel."
The buyer's sources estimated that achievable insurance premiums for green steel with this level of emissions should be close to €100-150 per ton. One buyer even suggested that some green steel deals could be done from scratch premium "for marketing purposes."
One source at the mill said that the premium for producing steel with such an emission content should be at least 170-180 euros per ton.
At the same time, the green steel that will fall under Fastmarlets specifications is at a premium of €200-300 per ton within a week, the estimate is.
The diplomat noted, however, there are opportunities for discounts on significant amounts.
Fastmarkets’ contribution by Yulia Bolotov
fastmarkets.com