Posted on 16 Mar 2021
German steelmaker Salzgitter will be increasing green steel production to a "five-figure" volume this year at its electric arc furnace-based works and sees increasing inquiries from the car industry and white goods sector since it began production late 2020, CEO Heinz Jorg Fuhrmann said March 15.
At the annual press call on Salzgitter's financial year 2020, Fuhrmann said Salzgitter is seeing keen demand from customer groups following a slow start at the end of last year. "Maybe customers were surprised that we were already ready to go," said Fuhrmann.
Salzgitter also reportedly delivered the first green coil products to white goods maker Miele.
Salzgitter is offering low emissions flat steel products produced at the Peine electric arc furnace steel mill.
Green steel costs are higher than commodity steel due to the higher production costs. A Salzgitter spokesperson told Platts that the willingness at customers to pay more is currently limited. "There is no political or economic incentive to use that material," the spokesperson said.
The company is however further boosting its green steel initiatives, expecting the result of the feasibility study whether to set up a direct reduction plant in Wilhelmshaven in the next coming weeks.
Logistics due to bad weather in February that forced Salzgitter to declare force majeure, have improved and Fuhrmann described the current shipment situation as "satisfactory" when asked by Platts.
The currently extended lead times at European mills is expected to ease over the next weeks and months, he said.
Following a rapid demand drop when the pandemic hit early 2020, Salzgitter's order intake grew rapidly in the second half of the year at the strip steel unit, seeing a 1.9% year-on-year drop to 4.2 million mt. Crude steel production dropped 8.7% on the year to 3.9 million mt, while rolled steel production fell 10.1% to 3.2 million mt. Consolidated sales dropped however heavily by 15% to Eur1.9 million.
The plate/section steel unit saw a higher order intake in 2020 than the year prior. At 1.9 million mt, orders grew 4.5% on the year, driven by an increase in plate volumes. Crude steel production was slightly higher as well by 3.5% year on year to 1 million in 2020. Consolidated sales fell however by 15% to Eur684,000.
The tube and pipe Mannesmann Business Unit, saw an order drop of 22.5% to Eur1 million as "virtually no tenders were offered for large-diameter pipe projects in Europe in 2020", said Salzgitter. Consolidated sales slipped 15.4% to Eur947,000.
Overall, the Salzgitter group recorded a pre-tax loss of Eur196.4 million and sales profit of Eur7.1 billion.
For 2021 the company expects a pre-tax profit of between Eur150 million and Eur200 million and an increase in sales to more than Eur8.5 billion as steel demand is set to improve this year.
Source:Platts
