Severstal sees hydrogen supporting pipe demand
European large diameter steel pipe demand will be boosted from 2024 by the development of hydrogen transportation infrastructure, Russian integrated steelmaker Severstal said today.
The company hopes to deliver pipes suitable for transporting hydrogen in the next couple of years. The chemical properties of the gas make it unlikely that current pipes can safely transport it for long periods of time, director of energy sales and business development, Dmitry Goroshkov, said.
Energy companies are studying whether they can use existing pipes to transport a mixture of methane and hydrogen that can be separated at the point of destination or insulate current pipes to protect them from hydrogen. Goroshkov said it is likely that the infrastructure will involve a mixture of existing pipelines that have been adapted, and new pipes specifically designed to handle hydrogen. While several thousand kilometres of pipelines will be needed to transport hydrogen, the impact on steel demand depends on how much of the existing network is adapted, he added.
Almost 70pc of Severstal's sales to the energy sector are related to oil and gas transportation, but the company sees the growing importance of renewables, such as wind power. It completed its first trial sale of thick plate to be used in the structure of an offshore wind tower in the last few months. Offshore wind turbines are larger than onshore units, so have more demanding requirements. The company sees manufacturers of wind towers globally — and especially in Europe — as a big opportunity. It supplies almost 100pc of the steel for wind towers built in its domestic market.
Severstal has also increased exports of large-diameter pipes, a key and premium offering for the company. It will export 60,000t of large diameter pipes this year — 25pc of all sales — compared with just 24,000t last year. Demand is already recovering from the pandemic and will be supported next year by high energy prices, which have helped projects that were delayed during the pandemic to restart. Development of liquid natural gas infrastructure and the development of new oil and gas fields are also supporting demand. Large-diameter pipe demand could reach peak consumption within Russia by 2023-24 as national energy companies restart investments in fields and pipelines, Goroshkov said.
Severstal is looking to certify the carbon content of its steel for sale into the EU, and in the short-term is looking to reduce its carbon emissions by 3pc by 2023 compared to 2020, and 10pc by 2030.
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Hoekstra to face 'tough' EU parliamentary hearings
Hoekstra to face 'tough' EU parliamentary hearings
Brussels, 18 September (Argus) — EU climate commissioner Wopke Hoekstra, who has been nominated again for the role, is expected to face "tough" hearings in the European Parliament, according to a senior European official. The official told Argus that Hoekstra might have a "slight" advantage, as he underwent parliamentary hearings in 2023 when he took over fellow Dutchman Frans Timmermans' climate portfolio. At the time, Hoekstra was questioned extensively about past work with Shell and on climate issues. European Commission president Ursula von der Leyen put forward new commissioner candidates on 17 September, assigning Hoekstra the climate, net-zero, and clean growth portfolio. All candidates will undergo hearings before the EU parliament votes on the new commission line-up. Hoekstra has said he is "honoured and humbled", but formal appointment depends on how he performs during the hearings before the European Parliament's energy, environment and other committees. Hoekstra's mandate would include drafting legislation to enshrine a 90pc cut in greenhouse gas (GHG) emissions by 2040, from 1990 levels, into European law. The commission's 2040 target, revealed in February, referred to a "net GHG emissions reduction of 90pc". Hoekstra last year made a "personal" commitment to defend a "minimum target of at least 90pc" net GHG cuts. Von der Leyen has tasked Hoekstra with designing climate policies for the post-2030 period and developing an Industrial Decarbonisation Accelerator Act. Other key objectives include channelling investment toward net-zero infrastructure and ensuring revenues from the EU's emissions trading system (ETS) are used "effectively" to drive decarbonisation. Hoekstra's responsibilities extend to advancing a single market for CO2, boosting carbon removals for hard-to-abate sectors, and phasing out fossil fuel subsidies. Hoekstra would work closely with former Danish climate minister Dan Jorgensen, who is nominated for the energy and housing portfolio, if both are appointed. Jorgensen will be responsible for advancing the Electrification Action Plan for industrial transition and overseeing a roadmap to phase out Russian energy imports. He is tasked with ensuring the "full use" of joint procurement mechanisms, with a mandate to extend the current aggregated demand system from gas to include hydrogen and potentially other commodities. Supervising both Hoekstra and Jorgensen, in addition to von der Leyen, will be Teresa Ribera, Spain's former climate minister. Ribera has been nominated as executive vice-president for a clean, just and competitive transition. European Parliament officials expect to receive financial declarations and other procedural documents in the coming days. That will allow parliamentary committees to send written questions to Hoekstra and other nominated commissioners, officially kicking off the hearing process. By Dafydd ab Iago Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Asia-Pacific faces $815bn/yr green financing shortfall
Asia-Pacific faces $815bn/yr green financing shortfall
Singapore, 18 September (Argus) — Asia-Pacific holds significant investment opportunities in the energy transition, but obstacles such as insufficient public funding, lack of regulation and investment risks have resulted in a financing shortfall in the region. The Asia-Pacific region needs at least $1.1 trillion/yr in climate financing, but actual investment falls short by at least $815bn/yr, said Singapore's ambassador for climate action Ravi Menon at a conference in Singapore last week, referencing data from the International Monetary Fund (IMF). There is existing green funding in the region such as from the Asian Development Bank (ADB), which estimated its investments amounted to $10.7bn in 2023, and bilateral arrangements like the $600mn India-Japan fund, established by India's National Investment and Infrastructure Fund and Japan Bank for International Co-operation in October 2023. But this is insufficient, especially as the region's energy demand is only set to rise further. Energy demand in Asia is growing by 2.9pc/yr, the highest of any region in the world, said Menon. Renewables such as solar and wind are now more cost-competitive than fossil fuels, but the region needs more grid connectivity and capacity to make renewable energy a viable option. Building transmission lines and energy storage in the region alone will cost about $2.4 trillion over the next 10 years, added Menon. Obstacles to capital flows Total energy investment worldwide is expected to exceed $3 trillion in 2024, with about $2 trillion going to clean technologies and slightly over $1 trillion toward fossil fuels, according to the IEA's World Energy Investment 2024 report. Fossil fuel financing by the world's 60 largest banks rose to $705bn in 2023 , up by 4.8pc from $673bn in 2022, with the rise largely driven by LNG financing. The continued investments in fossil fuels and fossil fuel-based technologies will lead to more carbon-intensive infrastructure, divert capital from clean energy alternatives and undermine climate targets, derailing Asia-Pacific from its energy transition goals. Emerging economies typically have "many developmental needs" to take care of, hence public financing in these countries cannot shoulder the overall trajectory of growth of energy transition financing, said the Institute for Energy Economics and Financial Analysis' (IEEFA) sustainable finance and climate risk research lead Shantanu Srivastava at the IEEFA Energy Finance 2024 conference earlier this month. Many smaller economies rely on financing from multilateral development banks (MDBs), but this comes in "bits and pieces" and with many strings attached, he added. It is hence essential to bring in private capital, but the region faces challenges in attracting private investments. The lack of a sound climate information architecture hampers accurate assessment and tracking of climate risks, which impedes investors' ability to make decisions and prevents the scale-up of climate finance, according to the IMF. Other measurable risks — such as political risk, credit risk, and foreign exchange risk — often significantly raise the risk premium of investments into the region. Investors tend to expect higher returns on investments with higher risk premiums, but there are limited investment opportunities available which would provide such returns and this prevents foreign capital from scaling, according to Srivastava. Insufficient regulatory and government measures in the region as well as the inconsistency of existing ones also deter private investors, as these increase project execution risks. Policy continuity and long-term visibility of what the country is going to do is essential as a "policy flip-flop" deters investor confidence, Srivastava said. Tools to attract more climate finance Blended finance is necessary to mobilise private capital for Asia's energy transition, according to Menon. Governments and development finance institutions could provide concessional or risk capital in the form of grants and limited guarantees, while MDBs can provide technical assistance in the form of development expertise, capacity building and institutional support, he said. Finance can also be encouraged through sovereign sustainable bonds, which can stimulate local sustainable bond markets by setting long-term price benchmarks, boosting liquidity, and serving as models for private issuers, according to IEEFA. The issuance of these bonds also signal a dedicated government commitment to sustainability goals and can drive the development of a robust and transparent regulatory environment, IEEFA added. This is crucial for the long-term growth and stability of the region's sustainable bond markets, which is essential for boosting investors' confidence. Another method is through revenue generation tools, such as carbon pricing and carbon taxes, according to the Financing Just Transition Through Emission Trading Systems report released earlier this month by think-tank Asia Society Policy Institute (ASPI). Carbon pricing sends a strong signal to reduce greenhouse gas emissions and indicates the government's intent to intensify efforts related to energy transition, which encourages private capital flow, stated the ASPI report. Carbon pricing also has the potential to generate substantial revenue, which can be allocated to climate funds to support low-carbon technology innovation and aid enterprises in making green investments, to aid low-carbon transition efforts, the ASPI report added. By Joey Chan Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Japan's Tokyo Steel cuts sales prices on weak demand
Japan's Tokyo Steel cuts sales prices on weak demand
Shanghai, 18 September (Argus) — Japan's steel manufacturing firm Tokyo Steel said it will cut domestic steel product prices for October, marking the first full-scale price cut in over four years. The decision was driven by sluggish domestic demand and increased competition from cheaper imported steel products. Tokyo Steel will reduce prices across all product lines starting October, with steel coils and plates dropping by ¥15,000/t, shaped beams by ¥12,000/t, and tubes and deformed bars by ¥10,000/t. The company had maintained stable domestic steel prices for an extended period on the back of the steadier domestic demand and market conditions compared to the more volatile overseas market. The last price cut for deformed bars was in July 2023. Steel sales in Japan were weak during the third quarter, impacted by rising procurement costs for materials, a shortage of construction capacity, and an influx of cheaper steel products from China in the seaborne market, market participants said. A decline in profitability pushed Japanese mills to cut production costs. From 11 July to 14 September, domestic scrap prices at Tokyo Steel's Utsunomiya plant dropped by ¥12,500/t, or 23.8pc. Market sentiment in Japan remains bearish due to economic uncertainty and the strengthening of the Japanese yen. The upcoming adjustments in US monetary policy could add further volatility to exchange rates. "We may see more corrections in the Japanese domestic market," a trade source said. Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
July EU HRC imports show 175,000t pullback
July EU HRC imports show 175,000t pullback
London, 17 September (Argus) — EU hot-rolled coil (HRC) imports surpassed 1.5mn t in July — a record high — as importers for the first time faced a cap to the ‘other countries' safeguard quota, which led some to purchase back-up material from other sources. More importantly, official figures show that around 175,000t were pulled back from customs clearing, likely all in Italy, after the initial quota numbers were made available in early July from Egypt, Vietnam, Japan and Taiwan. This leftover amount will likely all be custom-cleared in October, in addition to material that has arrived since July, as market participants expect importers to clear all of their HRC to avoid the risk of retroactive duties, potentially applicable from December. Imports from Taiwan, India, Turkey and Japan in July all surpassed the 200,000t mark each, with total imports from those four origins close to 900,000t, a sharp year-on-year increase. Vietnam saw volumes drop ( see table ), while South Korean imports fell by 75pc on the year to 40,379t and Serbian imports were down by 10pc to 37,437t. Hot-dipped galvanised (HDG) imports were at a record high, topping 750,000t in July, with nearly 30pc of the total from Vietnam. There has been concern in the market that the EU might start an investigation on Vietnamese HDG, as volumes have been on the increase, while suppliers are regularly the lowest-priced in the market. Plate imports were also at a record high, as EU producers are preparing to file for an investigation on some origins. Meanwhile, the increase in imports and the drop in EU demand has led producers to seek export outlets, with EU HRC exports rising on the year and on the month in July to nearly 230,000t, with the bulk going to the UK, US and Turkey. Downstream product exports also increased. By Lora Stoyanova and Colin Richardson July EU HRC imports t July y-o-y ±% Taiwan 227,892.8 8.2 India 225,558.6 134.8 Turkey 223,185.9 255.2 Japan 210,842.9 6.5 Egypt 158,625.7 31.9 Vietnam 144,202.0 -59.5 Ukraine 101,721.2 118.5 Australia 51,784.0 104.4 Saudi Arabia 40,594.8 -36.4 Total 1,565,744.2 9.1 — GTT Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
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