7 February 2023 – Despite new volatility in nickel prices, stainless steel spot prices remain unimpressed. Is the U.S. government considering imposing 200% tariffs on Russian aluminium? And will German steel producers receive government funding for research into existing technologies?
Stainless steel spot prices unimpressed
The price of nickel has supposedly fallen in recent days. But this did not impress the stainless steel spot prices. A similar phenomenon could already be observed in 2021. With regard to the fluctuations in the exchange rate of the EUR-USD currency pair and the average trading prices on the LME, nickel is still above the values of December 2022 and January 2023.
Chinese spot prices continue to rise
As nickel prices continue to be the most important factors in the calculation of stainless steel prices, this is also impressively shown by the example of the Chinese spot market. This had already risen further in the past few days and even caused prices for the low-nickel content grade 201 to increase. Spot prices also rose again today for 304/304L and 316/316L grades, which are currently being boosted by high molybdenum prices.
200% tariffs on Russian aluminium products? US government considers raising tariffs
According to media reports confirmed by US government sources, the United States is considering imposing a 200% tariff on Russian aluminium products. It is still unclear when a decision might be made, although the reports indicated the possibility of a decision this week or next.
German steelmakers get subsidies for existing technologies?
Direct Reduced Iron (DRI) technology is nothing new and has been used worldwide for years. Especially in regions with a high availability of natural gas, such as the Middle East or the United States. It is also known that if green hydrogen is available, the production of DRI/HBI can contribute to a significant reduction in CO2 emissions. Nevertheless, DRI has been a marginal part of steel production, with little more than 100 million tonnes of DRI produced worldwide per year.
Funding for systems for which there is no green fuel?
It therefore seems strange when German steel producers, such as the thyssenkrupp Steel Europe AG group, receive funding for research into technologies that have already been researched. Especially since green hydrogen will only be available in homeopathic quantities in the medium to longer term, and only the possibility of substituting other gases with green hydrogen in an unnamed (and distant) future is repeatedly referred to.
Investments in the development of renewable energies?
Because according to thyssenkrupp Steel Europe, it needs at least 3,000 additional wind turbines just to meet the energy demand for the production of green hydrogen. Not to mention the necessary and non-existent hydrogen electrolysers.
Hydrogen production is a climate killer
Of course, other fuels, especially natural gas and conventional hydrogen, can also be used in a DRI plant. And no matter how well you calculate it, the benchmark values of the European Union for the production of one tonne of conventional hydrogen are 6,840 kg CO2e.
Will DRI plants continue to run on natural gas in the future?
One can only hope that the German steel group will have enough natural gas available. That would only worsen the company’s environmental balance by 2,750 kg CO2e per tonne of natural gas used in the state-financed DRI plants. But for that, too, a loophole in the CO2 calculation can surely be found.
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