Sustainability ‘not yet a priority for long steel sector’

Buyers in the long steel sector cannot purchase green steel products and remain competitive unless their usage is written into legislation, sources told Fastmarkets on Friday October 7

The success of green steel initiatives and the appetite for green steel were not seen universally across flat and long steel products, Fastmarkets heard.

Green steel initiatives have seen considerable uptake across flat products. This was largely because there was greater pressure on the automotive sector to become more sustainable, compared with the construction industry.

Car manufacturers are a major market for flat steel products, and have pledged to achieve net-zero carbon emissions by a certain date, but construction companies, the main buyers of long steel, have not done the same.

A significant part of the achievement of net-zero emissions for car manufacturers entails the purchasing of more sustainable materials, such as green steel.

One of the sustainability goals that emerged following the COP26 climate conference, held in 2021, was that all sales of vans and new cars should be at zero emissions by 2040 or earlier.

At COP26, automotive manufacturers Ford, Mercedes-Benz and Volvo pledged to achieve net-zero emissions in new vehicle sales by 2035.

There was also additional pressure from consumers, who have become increasingly interested in product origins and how sustainable they are, sources said.

Low-carbon steel is an integral part of sustainability goals.

In early October, for example, German industrial group Thyssenkrupp signed an agreement with Mubea, a major automotive parts supplier, for low-carbon steel deliveries from 2026.

Similarly, in February 2022, Salzgitter signed a deal with German carmaker BMW for the supply of low-carbon steel from 2026 onward.

But the pressures that were driving sustainability in the automotive sector did not currently apply in the construction industry, Fastmarkets heard.

The construction industry is the major consumer of long steel products.

Such materials are predominantly produced with the use of electric-arc furnaces (EAFs), which are much less energy-intensive than the blast furnaces used in the production of flat steel, sources said. EAFs also consume scrap, a recycled raw material.

No construction company has been heard to have pledged to go green, or to have a green strategy.

Once a building is constructed, sustainability might be a factor in terms of its energy efficiency. But at the stage of purchasing construction materials, there was no appetite to prioritize sustainability over cost, Fastmarkets heard.

“I don’t know if I can believe in green steel yet,” one rebar buyer in Austria said. “Right now, it is not a reality — it is just a buzz-word. Everyone is throwing around [such jargon] terms, but what are the actual effects? Unless the government creates legislation which means buyers have to fulfill a quota of green steel each year, companies are never going to do it.”

Unless the government creates legislation which means buyers have to fulfill a quota of green steel each year, companies are never going to do it

Another buyer source from Northern Europe said: “We sell a minuscule amount of green steel to special projects. Sustainable steel will never make leaps and bounds in the construction industry. It will be very slow.”

Special projects, according to this source, accounted for less than 2% of overall consumption, and these projects were probably related to sustainability.

If the project were a sustainable initiative, for example, then the premium cost for green steel would be worth it, sources said. But in most projects for private clients and public projects, the main priority would be to keep costs low.

Interestingly, according to one source, the energy crisis and the subsequent weak demand have not affected the amount of green steel being requested, Fastmarkets heard. Although it was very low, the figure has remained flat.

What to read next
Nickel pig iron (NPI) is a key feedstock material used for stainless steel production, and the CIF has grown to become one of the mainstream trading methods for the Chinese market. The proposed price assessment will allow Fastmarkets to bring more transparency to the Chinese NPI market. Fastmarkets has been tracking spot and DDP China […]
Fastmarkets proposes to amend the specifications of its weekly price assessment for MB-STE-0037 steel rebar domestic exw Italy to better reflect the material traded in the market.
The purpose of this review is to ensure that the index continues to accurately reflect prevailing market conditions. We welcome feedback from industry participants on potential amendments to the base specification. This consultation, which is open until August 9, 2025 seeks to ensure that our methodologies continue to reflect the physical market under indexation, in […]
Key talking points from the 75th anniversary event of European steel distributors’ association Eurometal, held July 2-3 in Luxembourg and attended by Fastmarkets.
Mexico’s production and consumption of long steel fell year-on-year in May due to weakness in the country's construction sector, but posted a month on month gain, according to the latest data from the Mexican steel chamber, CANACERO.
Charcoal-based pig iron can potentially support decarbonization strategies in the EU, despite not being widely used in the region, delegates were told at Fastmarkets' International Iron Ore & Green Steel Summit, held June 17-19 in Barcelona.