24 July 2023 – The outlook for semiconductors in cars looks bright. Forecast for global car production in 2023, 2024 and 2025 significantly, to 86.7, 87.9 and 90.5 million cars. EU approves billions in subsidies for steel that may never turn green.
Car semiconductors in strong demand
The outlook for semiconductors in cars looks bright.
Standard and Poor’s (S&P) recently raised its forecast for global car production in 2023, 2024 and 2025 significantly, to 86.7, 87.9 and 90.5 million cars. For battery-electric cars, which contain more than twice as many semiconductors as internal combustion engines, the forecast for 2023 was slightly lowered. With 10.7 million cars, S&P nevertheless forecasts growth of 30.5 per cent compared to 2022.
Government purchase incentives and more intense price competition should support demand for electric cars despite a weakening economy. Experts forecast annual sales growth of ten percent for them until 2025, while the entire semiconductor market is expected to grow by only three percent.
This should support the demand for steel, stainless steel, aluminium and other metals related to the automotive sector.
Billions in subsidies for steel that may never turn green
The European Union has given its approval for two large Direct Reduced Iron (DRI) plants in France and Germany with a total subsidy of €2.85 billion. The two DRI plants will also be able to process green hydrogen and therefore fit in with the EU’s Net Zero plans. For the time being, however, the plants of thyssenkrupp in Germany and ArcelorMittal in France will only run on natural gas, as CO2 neutral or green hydrogen will not be available in the required quantities in the foreseeable future.
Hydrogen from 2029 at the earliest or perhaps never
In the case of ArcelorMittal, there is no time frame in the subsidy conditions for switching from DRI production with natural gas to hydrogen. In the thyssenkrupp project, no hydrogen use is planned before 2029, and the supposedly so green Federal Ministry of Economics under Robert Habeck has not written any mandatory use of green hydrogen into the contracts. However, the German government has reserved the right to make the distribution of 1.5 billion euros dependent on the future use of green hydrogen as an energy subsidy.
EU without power to enforce
Despite this glaring omission, thyssenkrupp is getting its DR plant as a gift from the German taxpayer and has also made it clear once again in the accompanying press release that the European Commission’s assumptions of 50 kg of hydrogen per tonne of steel were deliberately set far too low and are now 25% higher. As is so often the case, the EC has once again miscalculated.
These two subsidy approvals clearly show that Europe is not really on the way to a greener future and is neither able nor willing to implement a real green transformation. Defending the EU Carbon Border Tax CBAM before the World Trade Organisation (WTO) is likely to become increasingly difficult for the European Commission.
Latest news
- US sanctions Russian nickel and copper producer
- Raw material prices rise again, SHFE adjusts price limits
- Aluminum Sheet: US launches circumvention investigation
We at the Gerber Group have been trading in stainless steel worldwide for over 20 years. We are your experts when it comes to purchasing, import, logistics and services. Information is a vital part of this. Because only then can you and we make the right decisions. Do you have any questions? Contact us now.
Disclaimer: Many things here represent our opinion. Others are information from the Internet. We can therefore never claim to be correct or complete. And never base a business decision solely on the news you receive from us.
