European green steel premiums little changed; deals remain sporadic
European green steel premiums were little changed in the past week, with demand remaining slow because original equipment manufacturers (OEMs) feel no pressure to “go green” yet, sources told Fastmarkets on Thursday August 3
Fastmarkets’ weekly assessment of the green steel domestic, flat-rolled, differential to HRC index, exw Northern Europe was €150-250 ($164-274) per tonne on Thursday, narrowing downward by €50 per tonne from €150-300 per tonne on July 28.
A buyer source reported an assessment for flat steel produced via electric-arc furnace (EAF) with carbon content of about 0.4-0.5 tonnes per tonne of steel at €150-200 per tonne.
Offers for such material were heard at €150-250 per tonne, depending on the mill. Additionally, long-term contracts for green steel deliveries were being negotiated with such premiums, mainly with automotive companies.
Another buyer reported an assessment for flat steel produced via EAF with carbon content of 0.4-0.6 tonne per tonne of steel at €100-150 per tonne.
A mill source gave an offer for flat steel with less than 0.1 tonne of CO2 per tonne of steel at €300 per tonne, but added that demand for “nearly 100% decarbonized steel is very low, since such premiums are way too high for the most buyers.”
An end-user source said that demand for green steel remains low and rather sporadic because OEMs currently do not feel much pressure from authorities to use decarbonized steel.
But this is expected to change gradually in the upcoming years, with the EU’s Carbon Border Adjustment Mechanism (CBAM) being phased in and free Emissions Trading System (ETS) allocations being phased out.
Notably, sources estimated that by 2030, 30% of the European steel market will be green (zero or close to zero emissions).