September 23, 2021 – Magnesium prices in China continue to rise. Stainless steel and aluminum futures continue to rise. Aluminum Alloys shoot upwards. Green steel: Clever move by thyssenkrupp? And Germany fails to make the green turn. More than 80% hydrogen must be imported says German Economics Minister Peter Altmaier, and leaves open whether it will be green.
China: Magnesium prices continue to rise due to energy cuts
Chinese authorities in Shaanxi Province last week cut energy supplies to more than 80 industrial companies with very high energy consumption, including nearly 20 magnesium producers. Some companies had to stop production completely. This has already pushed magnesium prices up by more than 41% yesterday, and today they have risen again by more than 13%.
Also silicone metals continue their upward trend in China. Today it goes for silicone again by partly more than 18% upward.
Both metals, silicone and magnesium, are considered important components in the production of green technologies, such as electrical steel for wind turbines and in aluminum production. China is by far the world’s largest producer of both metals.
Stainless steel and aluminum spot and futures continue to rise
The stainless steel spot market in China continues to rise, up to 1.28%. Stainless steel futures are also showing an average increase of around 1%. For aluminum, the price increases are more significant. Aluminum futures on the SHFE rise by more than 2.6%. In the aluminum alloy sector, especially in the aluminum silicone magnesium alloys, the strongly increased silicone and magnesium prices are having an impact. In the Chinese spot market, aluminum alloys are up by more than 13% in some cases.
Green Steel: Clever move by thyssenkrupp?
We’re fantasizing a bit today. Germany’s biggest steelmaker thyssenkrupp is divesting its stainless steel business and plans to sell its Italian subsidiary Acciai Speciali Terni to the Arvedi Group. This will flush a little money into the coffers of the ailing group, which has been trying to save itself from the crisis for years.
1 million tons of green steel at a cost of 1 billion euros
Furthermore, during the election campaign for the new chancellor in Germany, the SPD has already promised funding for a thyssenkrupp project to reduce CO2 emissions in steel production. The total investment costs currently amount to 8 billion euros. If earlier statements by thyssenkrupp are to be believed, as much as 12 billion euros would be needed to put the German steel giant’s production on a more CO2-neutral footing – 1 million tons of green steel means 1 billion euros in investment costs.
thyssenkrupp receives multiple subsidies
According to media reports, German Economics Minister Peter Altmaier has promised €8 billion in funding for 62 hydrogen projects in Germany. Of this, 2 billion euros is to go to the steel industry.
An interesting side note is that the current apparently most important manufacturer of hydrogen electrolyzers in Germany is thyssenkrupp.
50 to 70% green funding from the European Commission
In order to receive subsidies, e.g. from the European Commission, profit companies are required to contribute 50 to 70% of their own investment in green hydrogen technologies. Thyssenkrupp Stahl has apparently not provided any information to date on how high its own share in the conversion to green steel is to be.
So in view of the EC funding level, thyssenkrupp’s 12 million tons of production capacity and the figures quoted of 1 million tons of steel for 1 billion euros, the announced 8 billion euros investment cost could actually be closer to 12 billion euros. 8 billion from the taxpayer, 4 billion perhaps from thyssenkrupp itself.
Of which thyssenkrupp could in turn use a few billion to buy from itself – or more precisely from the thyssenkrupp Chemical Plants & Processes business unit, which was spun off into thyssenkrupp Uhde on June 1, 2021.
Which, all in all, could have been a pretty smart move by thyssenkrupp – whether you like the group or not.
German Economics Minister Peter Altmaier capitulates on hydrogen
But the most important and interesting announcement by Peter Altmaier, Germany’s Economics Minister, with regard to the green transformation is that Germany will have to remain an energy importing country and buy in 80 to 85% of its hydrogen requirements.
Germany cannot get a grip on hydrogen production
Even German forecasts that hydrogen electrolysers in the 5 GW range would be available by 2030 are deleted in the current report on the national hydrogen strategy. Now it is only hoped that 3 GW could be available at all by 2030.
Hydrogen supplier countries with high natural gas reserves
And it should be clear which hydrogen Germany would then be allowed to import. It will not be green if the most important future supplier countries are blessed with very high deposits of natural gas. And according to the latest findings, blue hydrogen produces a much higher level of climate-damaging gases during its production than, for example, coal or diesel.
Where will Mr. Altmaier make his living after the Bundestag elections? Perhaps as a lobbyist at thyssenkrupp.
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