+86 18865111877Top ten global steel hot spots in 2023
1. Nippon Steel announces acquisition of U.S. Steel
On December 18, Nippon Steel announced its plan to acquire U.S. Steel in cash and turn it into a wholly-owned subsidiary. The transaction price is US$55 per share, with a total amount of approximately US$14.9 billion. Based on the closing price of U.S. Steel's stock on December 15, the acquisition premium was approximately 40%. Affected by the news of the high-priced acquisition, U.S. Steel's stock price rose 26% that day, reaching $49.59 per share. Nippon Steel did not explain why it was willing to pay a substantial premium to acquire U.S. Steel. As the world's fourth largest steel manufacturer, Nippon Steel's acquisition of U.S. Steel will greatly increase its crude steel production capacity and significantly increase its production capacity in the United States. The acquisition is expected to be completed in the second or third quarter of 2024, and the relevant transaction is still subject to approval by the Committee on Foreign Investment in the United States.
In addition, Nippon Steel promised to respect all collective bargaining agreements reached by U.S. Steel and the United Steelworkers, but the acquisition was still resisted by the latter. According to the agreement reached between the United Steelworkers and U.S. Steel, the United Steelworkers have no power to block the acquisition if the acquirer promises to maintain the existing labor agreement.
2. The EU carbon border adjustment mechanism officially enters the transition period
UK “carbon tariff” will follow
Starting from October 1, 2023, the EU Carbon Border Adjustment Mechanism (CBAM) has officially entered a transition period. According to regulations, the transition period will last until the end of 2025 and will be gradually fully implemented from 2026 to 2034. The first reporting quarter of the transition period is from October 1 to December 31, 2023. Importers need to submit their reports to the EU CBAM transition period registry before the end of January 2024 to enjoy relevant policies. On December 22, the European Commission announced the default values that can be used to determine the embodied emissions of imported goods (except electricity) covered by the CBAM transition period. The default values will be revised regularly after the end of the first reporting period in the fourth quarter of 2023.
On December 18, the British government officially announced that it will implement the British carbon border adjustment mechanism from 2027. The major product categories initially covered include aluminum, cement, steel, etc. The implementation rules of the UK's carbon border adjustment mechanism are similar to those of the EU. Goods imported into the UK from countries with low or no carbon prices must pay carbon tariffs. The British government will conduct further consultations in 2024 on the specific design of the carbon border adjustment mechanism.
Setting up “carbon barriers” in the name of curbing carbon emissions is becoming a common practice in developed countries and regions. In September this year, He Yadong, spokesperson of the Ministry of Commerce of China, responded to the EU CBAM that relevant policies should comply with the basic principles and rules of the WTO and avoid protectionist measures and green trade barriers.
3. COP28 releases the latest version of steel standard principles
On December 5, the latest version of the Steel Standards Principles was officially released at the "Steel Standards Principles: Unlocking Decarbonization, Trade and Global Markets" conference at the 28th Conference of the Parties to the United Nations Framework Convention on Climate Change (COP28). This represents a deepening of global commitment to drive measurement and tracking of emissions from steel production. At present, 42 advanced standard-setting organizations, enterprises, industry associations and international organizations have officially recognized the new steel standard principles. The main contents involved in the latest version of the steel standard principles include that the near-zero carbon emission measurement method in the steel industry must be fair and impartial and reflect the actual situation of different countries.
4. The pace of investment and development of Simandou project in Guinea has accelerated
In the second half of 2023, the Simandou project in Guinea will be advanced in depth.
On August 10, the Government of the Republic of Guinea, Rio Tinto Simfer and Win Alliance signed the "Joint Development Agreement for Simandou Iron Ore Port and Railway Infrastructure" as members of the Trans-Guinea Company, marking a key step in the development of the Simandou project.
In late August, Wrigley Minerals revealed that the company would participate in the Simandou project to consolidate its position in West Africa. Foreign media reported in mid-December that the company had restarted field work and planned to start drilling in March 2024.
On October 7, Baowu Resources and Simangdu Win Alliance signed a confirmation letter of shareholder agreement for the mining joint venture company in the northern Simangdu block project at Baowu Building. Since the beginning of this year, China Baowu and the Simandou Win Alliance have cooperated sincerely, and have successively signed mining and infrastructure cooperation agreements for the Simandou northern block project, and jointly promoted relevant partners to sign the "Joint Development Agreement" and other important cooperation documents. It has laid a good foundation for the integrated and coordinated development of mines, railways and ports in the Simandou project.
On December 6, Rio Tinto announced that it would advance the start-up time of its Simandou iron ore project in Guinea to 2025 and plans to spend approximately US$6.2 billion to build infrastructure.
5. Hydrogen metallurgy helps the global steel industry deeply reduce carbon emissions
In 2023, the global steel industry will continue to promote the transformation from "carbon metallurgy" to "hydrogen metallurgy" and accelerate the low-carbon transformation.
On March 1, ThyssenKrupp and SMS signed a contract in Duisburg, Germany. SMS will design and build a hydrogen direct reduction plant for ThyssenKrupp Duisburg Steel Plant, which is planned to be completed by the end of 2026. built. On July 7, ThyssenKrupp New Era, a hydrogen energy business unit of ThyssenKrupp, was listed on the Frankfurt Stock Exchange (Premium Market).
On May 31, India’s Ministry of Steel allocated approximately US$55 million to its steel industry to support research on hydrogen metallurgy and the construction of pilot plants.
On July 19, ArcelorMittal's Sesto plant in Spain cooperated with Saraje and Japanese natural gas companies to use Saraje's technology to put into use a ladle preheating system that can use 100% green hydrogen as fuel.
On September 5, Swedish steel manufacturer Ovako officially launched the world's first electrolytic hydrogen production plant that does not use fossil fuels in Hofors, Sweden.
In mid-October, the U.S. Department of Energy announced that it would spend US$7 billion to launch 7 regional clean hydrogen centers in the country, which are expected to produce 3 million tons of hydrogen per year. The goal is that by 2030, the hydrogen production of the 7 centers will account for nearly 1/3 of the total U.S. production.
On November 6, Africa’s first industrial-scale zero-carbon emission steel production project using green hydrogen broke ground in Namibia and is scheduled to be put into production by the end of 2024.
On November 27, "Korea Economic News" reported that South Korea's Posco Holdings Group plans to build three sets of hydrogen direct reduction systems at Pohang Steel Plant and Gwangyang Steel Plant respectively by 2050.
In addition, the hydrogen metallurgy practice projects of Chinese steel companies represented by China Baowu and Hegang Group have attracted widespread global attention. Edwin Basson, Director General of the World Steel Association, praised them for "promoting the green and low-carbon development of China's steel industry." Advantage".
6. Accelerate the research and development of global advanced steel products and production technologies
In 2023, the production and research and development of global steel companies will continue to accelerate.
In early January, the German subsidiary of Swiss Steel Group announced the development of the XTP® process, which can produce ultra-fine grained, ultra-high-strength steel without adding alloys or special heat treatments. The process produces extremely fine-grained steel with grain sizes of less than 5 microns, which increases the steel's tensile strength to 2,050 MPa.
In June, Posco Holdings Group launched the first carbon emission reduction brand product "Greenate Certified Steel" in South Korea, achieving carbon emission reduction through the introduction of low-carbon production processes and the use of low-carbon iron source materials. In late November, it successfully developed a stainless steel lining technology using duplex steel with excellent corrosion resistance and corrosion resistance. Duplex stainless steel was used as the water tank lining material to improve environmental protection.
On October 31, Kobe Steel used optimal composition design and TMCP technology to develop and commercialize the "EX-Facter" steel plate, a fatigue-resistant steel plate that suppresses the occurrence of cracks for the first time in the industry.
At the end of November, Dongkook Coated Metal Co., Ltd., a cold-rolling business subsidiary of South Korea's Dongkook Steel, successfully developed the world's first technology to use recycled waste plastics to produce color steel plates - Reborn Green PCM.
In addition, in 2023, Chinese companies also achieved the global premiere of multiple advanced steel products. For example, Baosteel Co., Ltd. achieved the global premiere of seven products including 1500 MPa DP ultra-high-strength automotive sheets in the first half of this year alone.
7. EU extends suspension of retaliatory tariffs on U.S. products
On December 19, the EU stated that it would suspend its dispute with the United States over steel and aluminum tariffs until March 31, 2025. In exchange, the United States agreed to provide further tariff exemptions for EU exporters.
In 2018, then-US President Trump imposed additional tariffs on EU steel and aluminum products exported to the US on the grounds of "maintaining national security." After many failed negotiations, the EU appealed to the WTO and imposed retaliatory tariffs on US goods exported to the EU. After multiple rounds of negotiations, the EU and the US Biden administration reached a two-year "truce" agreement in October 2021, announcing the reestablishment of steel and aluminum trade relations and the suspension of mutual taxation. The United States has partially lifted its restrictive measures and only imposed tariffs on some goods exceeding certain quotas, while the European Union has "frozen" all its restrictive measures.
8. Scrap steel has begun to be regarded as a strategic resource by many countries (regions)
Since the beginning of this year, many countries (regions) have introduced a series of measures around scrap steel, treating scrap steel as a strategic resource.
On January 17, the European Parliament voted to amend the Waste Transport Regulation to prohibit the transport of all waste for solid waste disposal within the EU unless authorized. Eurostat data shows that scrap steel accounts for 59% of all waste exports from the EU.
In early October, the UAE government issued an extended export ban on scrap steel to ensure sustainable access to raw materials for local producers. The UAE Ministry of Economy announced in accordance with Ministerial Resolution No. 06 of 2023 that the export of scrap steel and waste paper will be temporarily suspended based on the requirements of public interest. This measure will be implemented until December 19, 2023, extending the previous ban that was originally scheduled to expire on September 21.
Kazakhstan's Interfax news agency reported on October 26 that Kazakhstan will extend its ban on the export of ferrous metals and non-ferrous metal scraps for another six months from November 7.
In mid-November, Russia planned to extend the scrap tariff quota period for exports to countries outside the Eurasian Economic Union until June 30, 2024.
Scrap steel has gradually become a hot commodity. According to incomplete statistics, more than 60 countries (regions) have taken or plan to take measures to ban or restrict the export of recycled steel.
9. Ukraine resumes partial steel production
In 2023, Ukraine will resume some steel production and redirect trade flows to the European market. Ukraine's steel production began to rebound this year, although the threat posed by geopolitical conflict remains. The latest data from the Ukrainian Steel Trade Association shows that in the first 10 months of 2023, Ukraine's crude steel production was 5.16 million tons, pig iron production was 4.91 million tons, and steel production was 4.37 million tons.
In January this year, Ukrainian Prime Minister Shmeygar once again called on Western countries to provide him with reconstruction assistance worth US$70 million. From June 21st to 22nd, the International Conference on Ukraine Reconstruction was held in London, England. According to a report by Voice of America radio that day, the British government stated that the focus of the meeting included calling on about 60 countries to provide assistance to Ukraine in terms of technology, logistics and infrastructure.
Some scholars said that although Ukraine's steel industry has achieved a certain degree of recovery, comprehensive recovery still faces multiple challenges.
10. Overseas steel companies and mining companies have frequent production suspensions and strikes
Against the background of slowing global economic growth, soaring energy prices and production costs, and high inflation, incidents such as worker strikes and steel plant shutdowns have occurred frequently in various overseas regions this year.
From May 24 to October 5, Posco Holdings Group’s labor and management conducted a total of 24 negotiations on wages and benefits, but failed to reach an agreement. During the mediation, Posco Group union members also approved the strike with a 75% approval rate. On October 30, the Chairman of the Central Labor Committee of South Korea made an exception and participated in the mediation of labor disputes at Posco Holdings Group. In the early morning of the next day, the group's labor and management reached a tentative agreement and approved the agreement in a vote held on November 9, introducing benefits such as a four-day work system every other week.
On November 17, ArcelorMittal decided to temporarily suspend production at its Anmizenica steel plant in Bosnia and Herzegovina. On November 28, its South African company announced that it would gradually close its long product business starting in January 2024 and lay off approximately 3,500 employees. Its Brazilian branch also announced in mid-November that it would temporarily suspend production at three steel plants in southeastern Brazil until the end of December.
On November 24, hundreds of train drivers in a BHP Billiton mining area in Western Australia went on strike.
On November 27, Thyssenkrupp’s Spanish subsidiary announced that it would close its Sagunto factory.
On December 12, about 68,000 steel workers in North Rhine-Westphalia, Bremen, Lower Saxony and other places in western Germany held a 24-hour strike. Thyssenkrupp and Stahl, etc. Major steel mills operating in the country were suspended.