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Kallanish Kallanish

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December, 3rd 2021

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JUN 17
16:00

Buyers will accept green steel ‘shadow costs’: conference

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Consumers are becoming increasingly accepting of paying higher prices for steel produced with lesser harm to the environment, found participants in the closing session of Kallanish Europe Steel Markets on Thursday.

“It is becoming very clear that customers will be prepared to pay a higher price … The discussion about it has gained a speed which we had not expected,” said Martin Stillger, chief executive of distribution group thyssenkrupp Material Services.

He observed that many consumers have started factoring a “shadow price” in to their calculations, an additional cost for avoiding CO2, “and this will soon turn into real pricing”. Such ambitions originate on the side of the consumer – not least carmakers – “and this will be the game changer of the next three years”, he added.

His view was shared by Laurent Plasman, head of operational marketing of ArcelorMittal’s flat products operations in Europe. “We do perceive a growing curiosity among customers for the topic,” he said, and laid out the various schemes and approaches of the group to decarbonise steel production.

While agreeing in principle that customers are open to environmental efforts, Alessandro Fossati of Gama Trade was not so sure if the European manufacturing industry can really bear the extra cost so easily. In his view, the extra cost means adding another “brick to a wall we are building up for European products” and that there will be a point “when it won’t be reasonable to produce in Europe”.

Despite these valid considerations, Stillger remained adamant that “there is no alternative to this brick”. He noted that his group serves 250,000 customers around the world, “who are not all cheering at it [higher ‘green’ steel prices], but the number of those discussing it is growing unbelievably”.

Christian Koehl Germany