Fastmarkets’ weekly green steel domestic, differential to US HRC, fob mill was flat at $0 per short ton on Wednesday.
Fastmarkets’ domestic green steel base price, hot-rolled coil fob US mill stands at $930.40 per ton. The price is the average of the most recent US Midwest and South HRC prices. Plus the US green steel differential.
Lastly, Fastmarkets’ carbon threshold is 0.7 tCO2e per 1 tonne of steel. Renewable energy credits and mass balancing can be used for carbon calculation. However, carbon-offset credits are explicitly disallowed.
The green steel market in the US was stagnant in the assessment period, sources told Fastmarkets.
“We have regular discussions with interested buyers in the US, but there is still the challenge of the end users monetizing this with their products and customers,” a mill source said. “Most [market participants] do not want to or cannot just absorb higher costs in the absence of any other incentives. It seems most will continue to focus on longer term sustainability objectives, despite the short-term distractions.”
Impact of Trump administration’s policies
Donald Trump’s second presidency is approaching the first 100 days. With that, market participants have felt a shift in the push for clean steel under the new administration.
“The excitement has dwindled with Trump back in office. We are not seeing the sales pitch for green steel that we had from the last administration. [I’m] definitely not seeing an environment that sets up a premium for that steel,” a buyer said.
“With respect to green steel, there is clearly a slowdown in lobbying efforts by producers for federal funding for sustainability projects that do not have a clear return on investment,” a green steel consultant told Fastmarkets. “Some of the projects that are already in motion are also in question.”
Funding freeze and its consequences
On Trump’s first day back in office, the president signed the Unleashing American Energy Executive Order (EO). This order froze funds made available under the Inflation Reduction Act (IRA) and Infrastructure Improvement and Jobs Act (IIJA). It includes Department of Energy (DOE) loans and grants.
The funding freeze could negatively impact the acceleration of the green steel market in the US.
An example is steelmaker Cleveland-Cliffs’, which received a $500 million grant to upgrade its blast furnaces in Middletown, Ohio. While another $75 million was awarded to the steelmaker for a similar project in Pennsylvania may be cut, according to media reports.
Most recently, a US judge blocked the administration from halting the billions of dollars of Biden-era funding on Tuesday April 15.
“Agencies do not have unlimited authority to further a president’s agenda, nor do they have unfettered power to hamstring in perpetuity two statutes passed by Congress during the previous administration,” District Judge Mary McElroy in Providence, Rhode Island, said.
Market trends and partnerships in Europe
Meanwhile, green steel premiums in Europe were stable amid limited trading, sources told Fastmarkets on Thursday April 10.
Fastmarkets’ methodology has a specific definition for European green steel. Namely, “steel produced with Scope 1, 2 & 3 emissions at a maximum of 0.8 tonne of CO2 per tonne of steel.”
Despite the patchy spot market activity in Europe, buyers are increasingly looking to sign long-term agreements with green steel suppliers. This is likely to fuel demand in the years to come.
Nordic green steel startup Blastr signed a memorandum of understanding with Netherlands-based steel service center Vogten Staal for low-carbon emissions steel supply on April 7. This marked the third offtake agreement announced by the former in the past few months.
“We continue to see good progress in Europe, with many partnerships and a continued focus on decarbonization,” the mill source, based in the US, said.
Europe’s long steel and rebar green steel market overview
Fastmarkets’ assessment for green steel domestic, flat-rolled, differential to HRC index, exw Northern Europe was €150-200 per tonne ($155-206) on Thursday, unchanged week on week.
In the green long steel markets, Fastmarkets’ weekly price assessment for green steel, differential to steel reinforcing bar (rebar), domestic, delivered Northern Europe was €20-30 per tonne on Wednesday, unchanged on the week.
The assessment of the green steel base price, reinforcing bar (rebar), domestic, delivered Northern Europe, inferred was €670-710 per tonne on Wednesday.
Progress in green steel initiatives in India
In Asia, ArcelorMittal Nippon Steel (AM/NS) India has advanced in its transition to green steel. It reported that it aims to make 70% of its production low carbon by 2027.
Currently, 65% of AM/NS India’s steel production originates from the use of direct reduced iron (DRI). It uses natural gas, creating a low carbon footprint, according to the steelmaker.
Expansions that will incorporate technologies to further reduce carbon emissions are underway, AM/NS added. It includes a renewable hybrid project with clean energy company AM Green Energy. As well as a new scrap processing facility that is already operational.
India’s green steel taxonomy and decarbonization roadmap
In December, India unveiled the “Taxonomy of Green Steel”, which is expected to be rolled out by 2027. It is a set of guidelines for the production of decarbonized “green steel” in the country.
Finished steel will be applied a star rating based on the carbon dioxide emissions intensity of the product. This is as per the guidelines.
A five-star rating will be given for finished steel with an emissions intensity below 1.60 tonnes of CO2 per tonne of steel produced. Following this, four stars will be given when these figures fall between 1.60 and 2.00 tonnes. And three stars will be given when they fall between 2.00 and 2.20 tonnes.
“As India pursues its decarbonization goals toward net-zero emissions by 2070, it has pioneered the world’s first green steel taxonomy. This landmark initiative provides a clear roadmap for the steel industry to transition toward sustainable practices,” Dilip Oommen, chief executive officer of ArcelorMittal Nippon Steel India (AM/NS India) said on Wednesday.
Pricing trends in East Asia
Meanwhile, east Asian green steel producers have kept their premiums at 20-40%. This is against base prices for high-grade flat steel, sources told Fastmarkets.
Fastmarkets’ weekly calculation of the green steel import differential to HRC index, cfr Vietnam, which calculates the price difference between flat-rolled green steel and the CFR Vietnam price, was $101.40-204.00 per tonne on Friday, unchanged from the previous week.
Furthermore, the assessment of the green steel base price, HRC, cfr Vietnam, weekly inferred, which is calculated by adding new spreads to Fastmarkets’ Japan, Korea and Taiwan-origin HRC prices, was $608.40-714.00 per tonne on Friday, similarly unchanged week on week.
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