“We were green before it was cool to be green," Nucor Corp said in a Commitment to Sustainability report.
"In addition to producing up to 27 million tons of green, recycled steel each year, Nucor also makes up to 4.5 million tons of direct-reduced iron (DRI), a natural gas-based iron input that is blended with scrap in our [electric-arc furnaces] to make higher grades of steel. By using natural gas, our two DRI plants each emit about one-half the CO2 compared to iron produced in blast furnaces at integrated steel mills,” the Charlotte, North Carolina-based steelmaker said.
A lot of top international lending banks won’t show steel industry movers and shakers the green loan money they need for projects until they prove a desire and an effort to going green and maintaining strong environmental practices.
Welcome to 2021; that’s the way the world of big business works in a time of fear and political tension related to global climate change.
Pipe and tube producers feel it as well. The pressure is on them to go green like everyone else, but with that pressure comes opportunity.
“If hydrogen can get off the ground, it’s something that can power steel mills,” Fastmarkets’ pipe and tube analyst Kim Leppold said. “Some steel mills in other parts of the world have been working with hydrogen, but there’s not a lot of that going on yet here in the [United States]. For hydrogen, you’re going to need some pipe for transportation, so some opportunities may arise there.”
Just as pipe and tube products have been moving oil and gas for decades, it will likely be needed for hydrogen - if that becomes a growing focus in the ever changing, politicized business of energy making.
The same holds true for natural gas pipelines, Leppold said.
“In the energy transition, you have electric vehicles (EVs) that require electricity to charge the EV,” she said when asked about opportunities that might be present for pipe and tubers.
That electricity will have to come from generating plants, and so the bridge will be natural gas. So you need to get that out of the ground, but also transport it.
“We have to keep an eye on what the energy transition will look like and what it means for the pipe and tube industry, and for demand in general. My belief is that natural gas will be key in the energy transition, but the lack of pipeline capacity in the Northeast and the permitting issues with big transmission lines will hinder that,” Leppold said.
Within a US steel industry where 75% of the output already comes from cleaner EAF production, executives have learned that it sometimes pays off to look into the future for innovative opportunities. Read our exclusive report 'The true price of green steel' to learn more about the green steel transition.
“I had a hot-rolled coil call with a client not long ago, and he mentioned the solar tubing market was just going crazy and that was a really hot market,” Fastmarkets’ analyst Amy Bennett said. “So that’s another kind of tube application that could factor into the greening of the industry.”
Zekelman Industries - parent company of Atlas Tube, Wheatland Tube, Western Tube and Sharon Tube - has an entire page on its website devoted to “steel tubing for solar applications.”
Opportunities are available, but they aren’t always attractive for companies trying to bounce back from a 2020 pandemic and decades of up-and-down volatility.
“I’m not sure what the benefits of pipe and tube would be over structural... Technically, structural would be a higher recycled content, so it might actually be a disadvantage for hollow structural sections because most tubers use more integrated hot-rolled coil than EAF,” one Midwest producer source said.
“It might be an incentive to use more EAF HRC though, which would explain Nucor’s recent push to do so. California did recently come out with a new spec for green steel and it has different ratings for different products,” this source said.
Producers of stronger steel tubing might gain an advantage over the competition if some carbon footprint policies go into effect.
“One potential would be to use higher-strength tubing, such as 70ksi [kilopound per square in] or even 100ksi tubing, because it would have less weight and naturally would also have a lower-carbon footprint and longer-term environmental impact,” the same source said. “However, other than trailers and a few places on the West Coast, I haven’t seen much of an uptick there.”
Producers of seamless pipe have already been advocating their “cleaner” product versus welded pipe material made with HRC from integrated steel mills.
“The seamless OCTG [oil country tubular goods] guys could have a point in touting the scrap usage over ERW [electric-resistance welded] OCTG because they either buy from blast furnace mills that use coke or they buy from EAF mills who enhance the EAF feed for HRC with DRI [direct-reduced iron] or pig iron which is a virgin material,” Leppold said. “And pig iron uses coke, and DRI uses natural gas as a reductant.”
Tex-Isle Inc is the latest to join the growing list of companies shifting to those cleaner production techniques, building a new ERW pipe production facility designed to use 100% renewable energy for its power feed.
“This facility represents our ongoing commitment to expanding our manufacturing capabilities, while also lowering our carbon footprint,” Tex-Isle president Chris Kayem said in early June. “We are constantly evaluating further opportunities to achieve both of these goals.”
Pittsburgh-based US Steel refers to environmental stewardship as a “core value” founded on three principles: Compliance with environmental laws and regulations; continuous improvement in environmental and resource management; and continued reduction of emissions through innovation.
Cleveland-Cliffs and AK Tube have also touted innovations in the world of advanced high-strength steels (AHSS) used by engineers worried about meeting required automotive emissions standards.
“The HRC mills are looking at different approaches... Nucor may be looking at green energy for all their EAF mills since natural gas is probably used a lot at their mills along with electricity,” a West Coast distributor source said.
“The tube mills convert their coil into tube. Their approach to green energy would be in their energy source probably and with recycling their coolants utilized in production,” this source said.