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LIBERTY Steel Newport Extends Successful Business Turnaround

LIBERTY Steel’s Newport mill continues to make significant progress, achieving its best financial results for the first quarter, with the outlook for the second quarter looking even stronger. The business improved profitability last year despite challenging market conditions caused by Covid-19. LIBERTY Steel Newport’s Managing Director Mr Michael Perry said “Demand for our product is strong with the construction sector bouncing back from the impact of Covid-19 and we’re looking forward to setting more production and sales records over the coming months. It’s a great team here going from strength to strength.”

Newport East MP Ms Jessica Morden said "I commend everyone at Liberty Steel in Newport on such a strong performance during challenging times. This is a real testament to the great local management at the site and the dedication of the skilled and experienced workforce. The steel sector in Newport East is an asset to the regional economy and our community, and this will continue to be the case as the country looks to recover from the effects of the pandemic."

Strong sales along with a much-improved operational performance have put the business on a profitable footing. LIBERTY Steel invested just over GBP 2 million last year in modernising the Newport plant and this has continued with GBP 1.1 million spent in the first three months of this year. Investments include new gas furnace software and controls to lower gas consumption and reduce the plant’s carbon footprint.

LIBERTY Steel’s parent group GFG Alliance acquired the mothballed Newport mill, its first industrial acquisition, in 2013 and took the decision to pay employees half of their salaries while market conditions improved before reopening the site in October 2015. LIBERTY Steel Newport manufactures hot rolled coil for use in the UK manufacturing and construction sectors.

Source - Strategic Research Institute
Border Carbon Adjustment Bill Proposed in US

Following a move by the EU, US Democrats have unveiled legislation that would levy a fee on imported carbon-intensive goods, including steel. US Senate Climate Solutions Caucus Chair US Senator Mr Chris Coons (D-Del.) and US House Energy and Commerce Committee member US Representative Mr Scott Peters (D-Calif.) have unveiled new legislation to establish a Border Carbon Adjustment on polluting imports. BCA is a trade tool that levels the field for domestic manufacturers by imposing a fee on carbon-intensive products when they reach the border. This will incentivize investments in cleaner technologies and account for the cost of complying with US laws and regulations on greenhouse gas emissions. The BCA will also provide a flexible framework for more ambitious climate policy to come.

Imposing a BCA will protect U.S. jobs, reduce global emissions, and drive resilience in frontline communities.

The FAIR Transition and Competition Act of 2021 will protect U.S. jobs, reduce reliance on foreign energy sources, and drive climate innovation and community resilience domestically by

Recognizing the costs incurred by US companies in producing cleaner products due to emissions-related laws and regulations

Accounting for those costs by levying a fee on imports in carbon-intensive, trade-exposed sectors

Supporting international climate cooperation and the reframing of trade around climate

Directing revenue to the development and commercialization of high-impact emissions reductions technologies

Creating a new Resilient Communities Grant Program for states to support climate adaptation, transition assistance, and the communities facing the most severe impacts of climate change and historic pollution.

Source - Strategic Research Institute
3,000 RINL VSP Employees to Protest at Jantar Mantar in Delhi

The Great Andhra reported that as many as 3,000 workers opposed to the central government's privatisation plan of the Visakhapatnam Steel Plant will leave for Delhi on 31 July and protest on 2-3 August at Jantar Mantar in New Delhi. Also, 10 VSP workers union leaders left for Delhi to meet opposition party floor leaders in the Parliament and explain about the steel plant, their opposition to its sale plan, loss that would occur to Visakhapatnam & workers and whom the Centre is planning to benefit with this sale

According to the protesters, Rajya Sabha member and Yuvajana Sramika Rythu Congress Party leader Mr V Vijayasai Reddy has already assured that he would facilitate meetings with all the political parties' floor leaders in the Parliament, including the new steel minister.

VSP employees and workers have resolved that they will fight until the central government takes back its privatisation plan. Several workers fear that privatising the steel plant will lead to the non-implementation of reservation benefits.

Source - Strategic Research Institute
USITC Votes for AD Duty on Steel Wire Mesh Import from Mexico

The United States International Trade Commission has determined that US industry is materially injured by reason of imports of standard steel welded wire mesh from Mexico that the US Department of Commerce has determined are sold in the United States at less than fair value. As a result of the Commission’s affirmative determination, Commerce will issue an antidumping duty order on imports of these products from Mexico.

The scope of this investigation covers uncoated standard welded steel reinforcement wire mesh (standard wire mesh) produced from smooth or deformed wire. Standard wire mesh is produced in square and rectangular grids of uniformly spaced steel wires that are welded at all intersections. Sizes are specified by combining the spacing of the wires in inches or millimeters and the wire cross-sectional area in hundredths of a square inch or millimeters squared. Standard wire mesh may be packaged and sold in rolls or in sheets.

Petitioners: Insteel Industries Inc, Mount Airy NC; Mid-South Wire Co, Nashville TN; National Wire LLC, Conroe, TX; Oklahoma Steel & Wire Co, Madill, OK and Wire Mesh Corp, Houston, TX.

Source - Strategic Research Institute
Energiron DRI Technology Can Help India Reduce CO2 Emissions

In 2006, two Italian companies Danieli & C Officine Meccaniche SpA and Tenova SpA came up with a revolutionary green' method to produce steel, which can reduce carbon emissions by 50%. The two companies combined their technology and know how to design and construct gas based DRI plants, which are being offered worldwide under the Energiron trademark. They are now looking to increase their presence in the Indian market, where coal has been the primary reducing agent. With this technology, Danieli hopes to help India make green steel by using reducing sources cleaner than coal and capturing at least 60% of the carbon dioxide emission that can be commercialised as a by-product for different industries.

Danieli & C Senior Manager Sales Mr Dario Pauluzzi spoke to Moneycontrol about the Energiron technology and the company’s plans in India. He told “There are a number of reasons that make us believe that this technology can bring added value also to the Indian steel industry. India is one of the most important producers of Direct Reduced Iron, with a large number of coal-based rotary kilns in operation and some gas-based shaft furnaces. The Energiron process will be able to significantly add value to the local DRI and steel industry by producing DRI of quality far superior to the ones made by rotary kilns.”

He said “India is a large country with very heterogeneous conditions and requirements at each production site and the Energiron process enables the use of a wide range of iron oxides and reducing gases while maintaining the original process scheme. This flexibility can be of strategic importance to fit all these diverse requirements of the Indian steel industry. With the same plant configuration, the Energiron process can operate using not only natural gas but also coke oven gas, syngas, and hydrogen, in any mixture. And the use of all these reducing gases is extremely efficient, enabling minimised consumption and reduced CO2 emissions. Further, by replacing existing coal-based reduction facilities with a modern and efficient gas-based direct reduction technology such as Energiron, India will be able to drastically reduce CO2 emissions while increasing plant availability and DRI quality.”

It has been a while since Danieli has been promoting the Energiron green steel technology jointly developed by Danieli and Tenova around the globe. Standard Energiron modules are available with capacity ranging from 200,000 to 2,500,000 tonnes of DRI per year. DRI can be produced in any of its forms: Hot DRI, Cold DRI or HBI, with metallisation greater than 94% and with any carbon content in the range from 1.5 to 4.5%.

Source - Strategic Research Institute
Jamshedpur MP Mr Rai Alleges Pollution of Damodar River by SAILBSL

Times of India reported that Jamshedpur East MLA & Damodar Bachao Andolan President Mr Saryu Rai has raised concerns over the condition of pollution in Damodar River, accusing Steel Authority of India Limited’s Bokaro Steel Plant of callously discharging its effluents into the water body posing health hazards to local population dependent on the river, considered as one of the lifelines in this part of the state. During a meeting with Steel Minister Mr RCP Singh in Delhi to draw his attention and demand action against BSL, he showed photographs of the current condition of river to the minister depicting how the colour of the water has turned red and how discharge of effluents through BSL’s canal is flowing into the river.

Mr Rai said, “I have also shown photos to the steel minister, in which, it is clearly visible how Damodar’s water is turning red due to contaminated acidic effluents of BSL. I told the minister that after the continuous efforts of Damodar Bachao Andolan, the industrial units located on the banks of Damodar controlled releasing their effluents in river in the last 15 years but violations have again started taking place.”

He maintained that sustained efforts to save Damdoar river from industrial abuse since 2004 helped in its cleansing in 2018 as a result of which local residents were again able to use the water for domestic purposes.

SAIL BSL’s chief of communication Mr Manikant Dhan said “Zero liquid discharge system has been installed in BSL. In outfall-1, this system was installed in January 2018 and it is fully functional. In outfall-2, this system was installed last year and its trial was done for the first time on August 11, 2020. Since then the system installed in Outfall-2 is also working but it is currently in the stabilization stage. The water used in the plant is treated and recycled again for use in the plant itself by the effluent treatment plants installed at both the outfalls. Sometimes due to technical reasons, ETP in Outfall-2 has to be shut down for short period for testing and trial but even then 100% treatment of the water is ensured. Water quality testing is done twice a day in the plant’s lab and also through third party labs accredited by NABL. Also, 24x7 real-time monitoring of post-treatment quality of water discharged outside is carried out.”

Source - Strategic Research Institute
Hyundai Steel to Replace Lime Stone with Oyster Shells Sinter Feed

Aju Business Daily reported that South Korean steel maker Hyundai Steel is in the final phase of introducing a method to recycle shellfish and oyster shells that have been an environmental issue due to a huge accumulation of waste mainly along the southern coast. Adding limestone in the process of sintering iron ore for furnace injection can improve productivity and reduce fuel costs. Hyundai Steel has launched a project to replace limestone with powder made by processing shell pieces in collaboration with a domestic shell processing company.

Hyundai Steel has completed the evaluation of quality through mock-up tests. Environmental assessment is underway, and the steelmaker would seek approval from the state-run National Institute of Environmental Research. Shells can reduce the discharge of air pollutants from steel mills.

South Korea is one of Asia's biggest oyster farming countries. According to the Ministry of Oceans and Fisheries, more than one million tons of oyster and shellfish waste are left unattended every year. The management of oyster shell disposal at aquafarms is an ongoing challenge in South Korea.

Source - Strategic Research Institute
POSCO & HBIS to Set Up Automotive Steel JV in Tangshan

South Korean POSCO has signed a contract with China’s HBIS Group Co Ltd to set up a joint venture for production and sales of automotive steel sheet in China. POSCO and HBIS plan to build a plant with a production capacity of 900,000 tonnes of galvanized steel sheets in the economic development zone of Laoting County in Tangshan City in Hebei Province by investing a total of USD 600 million, with USD 300 million each and aim to start construction in next January and complete it by the end of 2023. In addition, it plans to incorporate Guangdong Continuous Galvanizing Line, which is currently operated by POSCO in Guangdong Province of China and has an annual production capacity of 450,000 tonnes of steel sheets as a subsidiary company into the joint venture. As a result, the joint venture will have a production capacity of 1.35 million tonnes and the two companies will supply cold rolled full hard coils

HBIS, the second largest steelmaker in China and the third-largest steelmaker in the world producing 44 million tonnes of crude steel as of 2020.

Source - Strategic Research Institute
Malaysia Imposes AD Duty on PPGI Steel from China & Vietnam

Bernama reported that Malaysian government has imposed anti-dumping duties on imports of prepainted, painted or colour coated steel coils originating or exported from China and Vietnam for a period of five years, effective 20 July 2021 to 19 July 2026. Malaysia’s Ministry of International Trade and Industry said that products by all manufacturers from China would be imposed with 52.1% duty while Vietnam’s Nam Kim Steel Joint Stock Company 0.06%, Maruichi Sun Steel Joint Stock Company would be imposed with 12.06% duty, NS Bluescope Vietnam Ltd 34.85%, and others 34.85%

The decision was made after the completion of an administrative review initiated on 22 January 2021 based on a petition filed by CSC Steel Sdn Bhd on behalf of the domestic industry.

Source - Strategic Research Institute
Mr Soydan is Sales & Supply Chain Director of NLMK Europe Strip

NLMK Group announces some organizational changes with the appointment of Mr Burak Soydan as the new Sales & Supply chain Director of NLMK Europe Strip Products, which includes NLMK La Louvière, NLMK Strasbourg, and NLMK Manage Service, all part of NLMK Belgium Holdings. After almost 7 years as Commercial & Supply chain Director Mr Jaap Piso will concentrate on several highly strategic projects for business unit, in cooperation with CEO Mr Cornelius Louwrens. Over the next 2 months, Jaap will also focus on the transition with his successor to enable Mr Burak Soydan to start his new position in the best possible conditions.

Previously, Mr Burak held the position of General Manager at NLMK Turkey. After a Bachelor of Science in Mechanical Engineering and a Master of Business Finance, Mr Soydan has held various managerial positions in Sales and Marketing for major international groups for more than 25 years. In 2017, Mr Soydan joined the NLMK Group as General Manager of NLMK Turkey. Upon his arrival, he developed the Sales & Marketing department and the Logistics organization from scratch. Under his leadership, NLMK Turkey has become the largest importer of steel with more than 2MT per year. He, therefore, has a very good knowledge of the group, our products, and our different markets.

Source - Strategic Research Institute
ArcelorMittal Unlikely Save Liberty Steel Dudelange in Luxembourg

Luxembourg Times reported that the embattled Liberty Steel plant in Dudelange in Luxembourg has secured payroll for two more months, with a takeover of the site by its former owner ArcelorMittal unlikely. Luxembourg’s Economy Minister Mr Franz Fayot updated members of the Parliament's economic committee on the future of the Liberty Steel plant. Mr Fayot told lawmakers that payroll for July and August has been secured. The site currently operates at reduced capacity with staff on partial unemployment because of a lack of funds to purchase raw materials. However, Mr Fayot told lawmakers there was no indication that the European Union’s competition authorities would consider an exception and allow former Dudelange plant owner ArcelorMittal to repurchase the site.

Luxembourg Prime Minister Mr Xavier Bettel's Democratic Party’s lawmaker Mr Andre Bauler said “At this moment, a takeover by ArcelorMittal is not possible. But there is also a certain consideration by the European Commission, where there is a certain degree of openness."

European Commission Vice President Ms Margrethe Vestager seemed to create an opening earlier this month for those who want to reverse the Luxembourg and Belgium factory sales by ArcelorMittal to Liberty Steel in 2019. Ms Vestager, in response to four MEPs from Luxembourg and Belgium two weeks ago, wrote “EU competition law prohibits ArcelorMittal from reacquiring production sites it has decided to divest, unless it can be proven that the situation and market dynamics have changed dramatically.”

According to opposition Christian Social People's Party Member of Parliament Mr Laurent Mosar, the situation at the Dudelange plant remains precarious. He said "I think Mr Fayot was relatively clear when he says that he's not excluding any option including taking a share of the steel company as earlier governments have when important companies like Cargolux or BGL bank have faced financial trouble. The main risk is that creditors force Liberty Steel to sell the Dudelange plant in an asset liquidation process, with unpredictable consequences. The essential question is how long the government will continue to accept this very difficult situation.”

Belgian newspapers had reported that the government of the French speaking Belgian region of Wallonia last month agreed to loan Liberty Steel money that could be used to organise the sale of the Liège and Dudelange plants.

ArcelorMittal was forced to sell the Liège and Dudelange plants along with others in Italy, Romania, Macedonia and the Czech Republic in order to buy Europe's largest steel factory in Italy. Liberty Steel stepped in as the European Commission sought to ensure the steel market remained competitive.

Source - Strategic Research Institute
Severstal Delivers Large Diameter Pipe for Barcarena LNG in Brazil

Russian steel giant Severstal has delivered large diameter pipes to Brazil for the first time. Also, for the first time, large-diameter pipes will be used for an LNG project being implemented abroad. The pipes will be used for the construction of Barcarena LNG. LDPs with a diameter of 508 mm, a wall thickness of 12.7 mm and a length of 11.5-11.8 m were manufactured according to the API 5L PSL2 standard from steel of strength category X65M at the Izhora Pipe Plant, located at the production site in the Kolpinsky district of St Petersburg. Additional requirements for offshore pipelines were applied to this order, which were successfully completed by the ITZ.

For the production of pipes, Severstal uses its own rolled metal products, which are produced by the company's 5000 sheet-rolling mill, located at the same industrial site with the ITZ in the Kolpinsky district of St. Petersburg. Having its own raw material base, steel-making and rolling production facilities allows Severstal to control the quality of products at each processing stage and provides flexibility in interaction with consumers.

In Brazil, LDP was delivered through the port of St. Petersburg to the port of Vila do Conde.

Barcarena LNG provides for the construction of a floating regasification unit with a capacity of 15 million cubic meters per day on the Para river, near the port of Vila do Conde. Natural gas from the terminal will be transported to customers in the industrial area of Barkaren and for the needs of the 605 MW Celba thermal power plant for electricity generation. The project is expected to be completed and commissioned in 2022.

Source - Strategic Research Institute
Jindal Shadeed Turns Oman into Net Exporter of Steel

Oman Observer reported that Oman has made the important transition from being an importer of steel to a net exporter over the past five years. Jindal Shadeed Head of Production Planning, Shipping and Logistics Mr Sameer Gupta said “From 2015 to 2020, we have been able to turn Oman from an importer of steel. Oman was importing about a million tonnes of steel per annum to a net exporter of steel; today we are exporting about 1.5 million tonnes of steel per annum.”

He said “We have invested close to USD 1.2 billion in Oman, having brought the latest steelmaking technology to this part of the world. Today, we manufacture about 1.8 million tonne of DRI, 2.3 million tonne of steel and 1.5 million tonne of rebar every year.” A dedicated 600-metre-long jetty earmarked for Jindal Shadeed’s exclusive use at Sohar Port enables the exports of around 1 million tonnes of steel products, including rebars, to international markets every year. Export markets include those in North and South America, Europe and for the first time this year, to Australia as well. Around 3.5 million tonnes of raw materials are also imported, primarily from India, for the project’s requirements.”

Mr Gupta also underlined the plant’s unique capabilities that allow for the production of special types of steels. He said “We are the only plant in the GCC with a vacuum degassing facility which helps us in producing special grade alloy steels for use by downstream industries for special applications, such as in the manufacture of automotive parts.”

Mr Gupta also noted that the Free Trade Agreement between Oman and the United States has also been beneficial for the Jindal Shadeed project.

Source - Strategic Research Institute
Marcegaglia, Arvedi, Posco & BaoSteel Eying Acciai Speciali Terni

Terni Today reported that the procedure for the sale of Acciai Speciali Terni, German Thyssenkrupp’s stainless steel manufacturing site in Italy, has come to life. A delegation from the Marcegaglia group visited the production site on 20 July and a tour was conducted at the Tubificio in the industrial area of vocabolo Sabbione. 21 July was the turn of the Arvedi group, while a date has not yet been set for the Posco and Chinese Baosteel delegations.

Within about ten days, the advisor JP Morgan, hired by ThyssenKrupp to follow the sale procedure, should receive the binding offers. The closing of the transaction is expected after the summer. The game for AST is played on three factors: industrial plan, available liquidity and employment guarantees.

Also Acciai Speciali Terni CEO Mr Massimiliano Burelli along with Personnel Director Mr Alessandro Rusciano and Plant Manager Mr Dimitri Menecali met the territorial secretaries of unions Fim Cisl, Fiom Cgil, Uilm Uil, Fismic, Ugl and Usb. The company management confirmed the opening phase two which will be completed with the visit to the plant of two other players, to arrive at the completion of the operation in October. Trade unions which asked guarantees on the scope of sale and on the future autonomy of the site, noted the absence of regional institutions and the Italian government.

Acciai Speciali Terni is market leader in Italy for Flat Rolled Stainless Steel Products. Acciai Speciali Terni Spa can boast a long industrial tradition with over 137 years of presence on the market and now ranks among the most important European integrated cycle steel plants. The company’s core business consists of flat rolled stainless steel products, for which AST is the market leader in Italy and one of the top four manufacturers in Europe. In addition to flat rolled steel products, the company produces electro welded stainless tubes, through its Tubificio Division, and forgings made of special steel, among the largest in the world, through its Forging Di

Source - Strategic Research Institute
Equinor Opts for Nippon Steel OCTG Seamless Pipes for CCS Project

Nippon Steel Corporation has been selected by Equinor as provider of High alloy OCTG seamless pipes to the Northern Lights Joint Venture, a carbon dioxide capture and storage value chain operator in the North Sea in Europe. Nippon Steel’ high alloy OCTG have been proven to perform the world's best corrosion resistance and can be used in a high concentration CO2 environment without causing corrosion. The construction has already started for the go-live in 2024 and Nippon Steel has so far supplied nearly 130 pieces, 1,550 meters, of carbon steel seamless pipe. Recently, high-alloy OCTG has also been ordered by the project, and Nippon Steel plan to start supplying approximately 120 pieces, 1,390 meters, in October 2021.

In this large-scale development, CO2 emitted from industrial facilities in Norway and other European countries will be collected and transported to an intermediate storage facility, before it is transported by pipeline 100km offshore before injected into a subsurface reservoir 2600 meters under the seabed. The high concentrated and liquefied CO2, requires the steel pipe to be extremely resistant to corrosion.

Northern Lights is the transport and storage component of Norway’s Longship project, which includes capture of CO2 from industrial point sources in the Oslo region. Northern Lights ships the CO2 to an onshore terminal on the Norwegian west coast and, from there, transport the liquefied CO2 by pipeline to a subsea storage location in the North Sea. It will also offer companies across Europe the opportunity to store their CO2 safely and permanently deep under the seabed in Norway. When Northern Lights starts operations in 2024, it will be the first ever cross-border, open-source CO2 transport and storage infrastructure network. Northern Lights was incorporated in March 2021 as a partnership between Equinor, Shell and TotalEnergies. Equinor is the service provider for the execution and operation of the Northern Lights onshore and offshore facilities. The project is scheduled to be operational in 2024.

The carbon dioxide capture and storage technology to collect CO2 emitted from power plants, chemical plants, etc. after isolating it from other gases and then store and inject it deep underground.

Source - Strategic Research Institute
Mr Kwarteng Assures UK Steel Council Meeting of Full Support

As part of the UK government’s ongoing engagement with the steel industry on how best to decarbonise, UK’s Business Secretary Mr Kwasi Kwarteng co-chaired the latest UK Steel Council meeting on 21 July 2021, along with the Chair of UK Steel Mr Luis Sanz. Representatives from the 6 major steel companies in the UK, trade unions and the devolved administrations also attended. Mr Kwarteng reaffirmed the UK government’s support for the steel sector and, in partnership with industry, commitment to helping it modernise, increase competitiveness and transition to a cleaner and profitable future and reiterated the need for a sustainable industry and discussed the ongoing work to explore an overarching, longer-term approach for the sector. Mr Kwarteng emphasised that as a national strategic asset, steel will play a critical role in providing the materials necessary to drive the UK’s green industrial revolution and that the government would continue to work closely with the sector on its transition to a low carbon future.

Following on from the previous meeting, where industry body UK Steel presented its draft roadmap for achieving net zero steel production, the Council discussed progress on the report, including a new section on jobs and the skills needed in a decarbonised industry. Other items raised included electricity prices, the quality and availability of scrap for steel making and what would be required to create a market for low carbon steel. The council also discussed what government support and on what timescales, might be needed to enable a transition to a competitive low carbon future. It was agreed the Council would meet again after Summer to discuss progress and that government and industry would continue to work together closely on these areas.

This is in addition to the ongoing meetings of the Steel Procurement Taskforce, chaired by Investment Minister Lord Grimstone, working to address difficulties reported by the sector in competing for and securing major public contractors. The government is also reviewing its public procurement rules to better able to meet the needs of this country now we’ve left the European Union.

The UK government has already announced a GBP 250 million Clean Steel Fund that will help the industry transition to a low carbon future, and, since 2013, it has provided over £600 million in relief to the sector to help with the costs of electricity.

Attendees included

UK Business Secretary Mr Kwasi Kwarteng

UK Energy Minister Ms Anne-Marie Trevelyan

UK Minister for Investment Lord Grimstone

Wales Secretary Mr Simon Hart

Welsh Government’s Minister for Economy & Transport Mr Vaughan Gething

UK Steel Chair & Celsa CEO Mr Luis Sanz

Tata Steel UK Chairman Mr Sandip Biswas

British Steel Chairman Mr Huiming Li

Liberty Steel’s Mr Peter Hogg

Sheffield Forgemasters COO Mr Gareth Barker

Outokumpu DirectorMr David Scaife

UK Steel Director General Mr Gareth Stace

Community Union’ Mr Roy Rickhuss

Unite Union’s Mr Harish Patel,

GMB Union’s Mr Ross Murdoch

Materials Processing Institute CEO Mr Chris McDonald

Source - Strategic Research Institute
Analysing Impact of Fit for 55 on European industry

Independent Commodity Intelligence Services Analyst EU Power & Carbon Markets Mr Sebastian Rilling has analysed the impact of Fit for 55 package on European industry

ETS Reform (2030 Target & Cap) - The released documents show a proposed emissions reduction target of -61% vs. 2005 by 2030 for the EU Emissions Trading System, putting the 2030 cap at around 800m allowances. The annual reduction of the cap through the Linear Reduction Factor, which came into force in 2014 and reduced the total quantity of allowances (cap) linearly by 1.74% each subsequent year till 2020 and up to 2.2% as of this year, will increase to 4.2%, or 82m allowances, in the year following entry into force of the legislation. This will be coupled with a one-off rebasing that will equate to applying the new LRF from 2021 on. The amount of the rebasing will depend on when the legislation will pass into law - we are expecting this for 2024, while some lawmakers on Wednesday suggested that the rebasing could take place as early as 2023. In the legislative process, we expect both the European Parliament and the Council to challenge the targets set for the EU ETS, and push for a higher emission reduction in the system to reduce the burden on other sectors, such as transport and heating. A change to the 2030 target for the ETS would directly influence the number of allowances supplied into the system and shorten the market, increasing prices for emission certificates (EUAs).

ETS Reform (Free Allocation) - The proposal further confirms an increase of the highest benchmark reduction rate from 1.6% to 2.5% annually. These benchmarks determine the number of free allowances producers covered by the EU ETS receive per unit of output produced. While it remains to be decided which product benchmarks would face this highest possible reduction, both the heat and fuel benchmarks are likely candidates. Preliminary free allocation for the heat benchmark in 2021 is 79.9m allowances, and another 36.1m certificates are foreseen for the fuel benchmark. An increase to the highest possible reduction rate in the second allocation period (2026-2030) would yield a 34.2% reduction of allocation for these benchmarks. At the same time, the proposed legislation foresees a phase-out of free allocation to sectors covered by the CBAM over a ten-year period beginning in 2026. Free allocation would be reduced by 10 percentage points annually for the steel, aluminium, cement, and fertilisers sectors. According to ICIS forecasts, the four sectors were expected to receive 291m certificates annually as free allocation between 2026 and 2030 - this would be cut by an average 87m EUAs if the legislation passes into law.

EU ETS Extension to Maritime Sector - Maritime shipping would be phased into the EU ETS over a three-year period as of 2023 according to the proposal. The scope of voyages covered spans intra-EU voyages, emissions at berth in EU ports and 50% of the emissions from extra-EU voyages (both incoming and outgoing). According to ICIS data, the inclusion of maritime emissions could expand the system by around 100 Mt of C02 emissions annually once fully phased-in, while introducing a new sector that faces abatement costs significantly above those of sectors currently covered by the ETS, as a previous ICIS Analysis shows. This is likely to further increase prices in the system, especially once the sector must fully comply with the system as of 2026.

Carbon Border Adjustment Mechanism - The European Commission is also planning to introduce a CBAM covering the steel, aluminium, cement, electricity, and fertilisers sectors. Allowances will be virtual and priced at the average previous week's EUA auction prices. There will be a transitional period from 2023-2025, and a reduced surrender obligation while free allocation in the EU ETS remains in place. ICIS estimates that around 200 Mt of embedded emissions would initially be covered by the measure. It remains to be seen, however, to what extent domestic carbon pricing schemes in the countries of origin as well as a potential resource shuffling will limit the impact for importers on the ground especially in the first years of operation.

Legislative Timeline - The proposed changes will change the market fundamentally likely as of 2024 with the application of the higher annual reduction of the cap, as well as the introduction of maritime emissions into the new system, depending on the legislative timeline. Potential points of contention in the political process will be the burden sharing between the ETS and other sectors, including road transport and buildings, for which the introduction of a new trading system as of 2026 is planned. The discussion around this new ETS itself is likely to face opposition in both Parliament and Council, as emission reduction costs in these sectors could impact end consumer prices and lawmakers anticipate a political backlash. While an adoption by the end of 2022 is possible, the political discussion could therefore reach well into 2023, making an application as of 2024 likely.

Price impact & Implications - In the absence of any changes to the proposed package, ICIS expect EU ETS prices to reach around EUR 90/tC02 by 2030, with a price increase expected in particular in the second half of the decade when the proposed reforms to free allocation would take effect. According to an estimate by our team, this price increase could see sectors covered by the CBAM face a carbon bill between 2026 and 2030 that is EUR 32.9bn higher than in the absence of a phase out of free allocation. Compliance players will therefore increasingly seek to cover their exposure to volatile C02 prices by turning towards an active emissions trading strategy.

On 14 July the European Commission published the Fit for 55 package reshaping the European emissions trading landscape. The proposal covers all aspects of the existing system, including the overall amount of allowances supplied into the market, the allocation of free certificates and the functioning of the Market Stability Reserve. At the same time, it introduces sweeping reforms, by expanding emissions trading to the maritime sector, introducing a Carbon Border Adjustment Mechanism, and proposing a new trading scheme for the road transport and buildings sectors.

Source - Strategic Research Institute
Recordwinst voor Nucor
Na omzetverdubbeling in tweede kwartaal.

(ABM FN-Dow Jones) Nucor heeft in het afgelopen kwartaal een recordwinst geboekt dankzij een ruimschootse verdubbeling van de omzet. Dit bleek donderdag uit de kwartaalcijfers van de Amerikaanse staalreus.

Nucor boekte het afgelopen kwartaal een nettowinst van iets meer dan 1,5 miljard dollar, ofwel 5,05 dollar per aandeel, in vergelijking met 109 miljoen dollar of 0,36 dollar per aandeel in dezelfde periode een jaar eerder. Aangepast voor bepaalde posten bedroeg de winst per aandeel 5,04 dollar. Nooit eerder in de geschiedenis van Nucor behaalde het zo'n hoge kwartaalwinst.

De omzet verdubbelde dan ook van 4,3 miljard in het tweede kwartaal van 2020 naar 8,8 miljard dollar het afgelopen kwartaal. Deze stijging is met name het resultaat van een hogere verkoopprijs per ton staal. Deze steeg op kwartaalbasis met 21 procent en op jaarbasis met 25 procent.


Nucor verwacht voor het derde kwartaal opnieuw een recordwinst, "nu de vraag robuust blijft en feitelijk alle eindmarkten die we bedienen groeien", zei CEO Leon Topalian van de staalreus in een toelichting.

Het aandeel lijkt donderdag bijna een procent hoger te gaan openen.

Door: ABM Financial News.

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ArcelorMittal's XCarb innovation fund makes $25M equity injection in Form Energy

Jul. 22, 2021 9:48 AM ETArcelorMittal (MT)ArcelorMittal (MT)By: Preeti Singh, SA News Editor

ArcelorMittal (NYSE:MT) has concluded its second investment in its recently launched XCarb innovation fund, which is the lead investor in Form Energy’s $200M Series D financing round.

The fund made a $25M equity injection in Form Energy. In addition to the investment, ArcelorMittal has entered into a joint development agreement with Form Energy. The companies will explore the potential for ArcelorMittal to supply iron to Form Energy as the iron input into their battery technology.

Founded in 2017, Form Energy is developing a low-cost energy storage technology to power a fully-renewable electric grid year-round. The company recently introduced a low-cost, scalable iron-air battery with multi-day reliability (100-hour duration hence overcomes the intermittent nature of renewable energy generation).


ArcelorMittal invests $25 million in Form Energy
Jul. 22, 2021 7:30 AM ETArcelorMittal (MT)
Agreement concludes second investment in ArcelorMittal’s XCarb™ innovation fund

22 July 2021, 13:30 CET

ArcelorMittal (‘the Company’) today announces it has completed its second investment in the Company’s recently launched XCarb™ innovation fund, serving as lead investor in Form Energy’s $200 million Series D financing round, with a $25 million equity injection.

Form Energy, which was founded in 2017 is working to accelerate the development of its breakthrough low-cost energy storage technology to enable a reliable, secure, and fully-renewable electric grid year-round. It has recently unveiled a new iron-air battery which is: low-cost (approximately one-tenth the cost of lithium-ion battery technology); has multi-day reliability (100-hour duration hence overcomes the intermittent nature of renewable energy generation); scalable; and can be sited anywhere.

Alongside the $25 million investment, ArcelorMittal and Form Energy have signed a joint development agreement to explore the potential for ArcelorMittal to provide iron, tailored to specific requirements, to Form Energy as the iron input into their battery technology.

Commenting, Greg Ludkovsky, global head of research and development, ArcelorMittal, said:

“Form Energy is at the leading edge of developments in the long-duration, grid-scale battery storage space. The multi-day energy storage technology they have developed holds exciting potential to overcome the issue of intermittent supply of renewable energy. They are exactly the kind of ambitious and innovative company we are seeking to invest in through our XCarb™ innovation fund.

“In addition to our investment, there are obvious synergies we are exploring with them. These include from ArcelorMittal supplying iron for their battery solutions, through to the potential their batteries hold to deliver us a permanent, reliable supply of renewably generated energy for our steel plants, therefore helping us in our journey to transition to carbon-neutral steelmaking.”

Mateo Jaramillo, CEO and co-founder of Form Energy, added:

“This is an extremely exciting time at Form Energy and we are pleased to welcome ArcelorMittal as a business partner and investor. ArcelorMittal is a world’s leading steel and mining company and this investment demonstrates their commitment to innovation and deep decarbonization. We appreciate their confidence in our team and in our technology as we work to reshape the global electric system to enable a clean energy future.”

The investment is the second ArcelorMittal has made in its XCarb™ innovation fund since its launch in March 2021. It follows an initial $10 million investment in Heliogen, a renewable energy technology company which focuses on ‘unlocking the power of sunlight to replace fossil fuels’, on 8 June.

The XCarb™ innovation fund – in which ArcelorMittal anticipates investing up to $100 million a year - is designed to invest in companies which are developing technologies which have the potential to support and accelerate the transition to carbon-neutral steelmaking. It was launched as part of ArcelorMittal’s wider XCarb™ initiative, which will ultimately encompass all the Company’s efforts to progress to carbon-neutrality.

Source: ArcelorMittal S.A. 2021 GlobeNewswire, Inc.
India Approve PLI Scheme for Promoting Specialty Steel Production

Indian Government’s Union Cabinet has approved the Production Linked Incentive Scheme for specialty steel. The duration of the scheme will be five years from 2023-24 to 2027-28.As per government estimates “With a budgetary outlay of INR 6322 crores, the scheme is expected to bring in investment of approximately INR 40,000 crores and capacity addition of 25 million tonnes for speciality steel. Speciality steel production will become 42 million tonnes by the end of 2026-27.”

Specialty steel is value added steel wherein normal finished steel is worked upon by way of coating, plating, heat treatment, etc to convert it into high value added steel which can be used in various strategic applications like Defence, Space, Power, apart from automobile sector, specialized capital goods etc. The five categories of specialty steel which have been chosen in the PLI Scheme are:

Coated & Plated Steel Products

High Strength & Wear resistant Steel

Specialty Rails

Alloy Steel Products and Steel wires

Electrical Steel

Out of these product categories, it is expected that after completion of the Scheme India will start manufacturing products like API grade pipes, Head Hardened Rails, electrical steel needed in transformers and electrical appliances which are currently manufactured in very limited quantity or not manufactured at all.

There are 3 slabs of PLI incentives, the lowest being 4 % and highest being 12% which has been provided for electrical steel CRGO. The PLI Scheme for specialty Scheme will ensure that the basic steel used is ‘melted and poured ‘within the country which means that finished steel used for making specialty steel will be made in India only, thereby ensuring that scheme promotes end to end manufacturing within the country.

Speciality steel has been chosen as the target segment because out of the production of 102 million tonnes steel in India in 2020-21, only18 million tonnes value added steel & speciality steel was produced in the country. Apart from this out of 6.7 million tonnes of imports in the same year, approximately 4 million tonnes import was of specialty steel alone resulting in FOREX outgo of approximately INR 30,000 crores.

Source - Strategic Research Institute
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