The upstream winners from Europe’s green steel transition

Fastmarkets

Yesterday

Europe’s green steel market is usually discussed in terms of the price premium paid for finished products, but steelmakers are unlikely to retain the entire additional value. As lower-emission ...

Source Link

Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.

Most Discussed

{"basename":"","ssrTDKData":{"titleTemplate":"%s - Tiger Brokers","title":"Tiger Brokers HK | Online Trading in stocks, bonds & ETFS","description":"Discover Tiger Brokers HK, an online trading platform for stocks&ETFs, options&futures, bonds and crypto. Open an account to enjoy low commission trading today!","keywords":"tiger trading,tiger security,tiger broker hk,tigers co ltd,tiger trade hk,tiger brokers hk,stock broker,securities broker,online brokerage,hong kong broker,hk broker,online stock trading,online trading platform,stock trading platforms,trading application,stock trading,stock trading hong kong,buying stocks in hong kong,tiger brokers","social":{"ogDescription":"Discover Tiger Brokers HK, an online trading platform for stocks&ETFs, options&futures, bonds and crypto. Open an account to enjoy low commission trading today!","ogImage":"https://c1.itigergrowtha.com/portal5/static/media/og-logo.0a0bd8dc.png","ogUrl":"https://www.imtigers.com/news/2667494036"},"companyName":"Tiger Brokers"},"pageData":{"isMobile":false,"isTiger":false,"isTTM":true,"region":"HKG","license":"TBHK","edition":"fundamental"},"isCrawlerRequest":true,"__swrFallback__":{"@#url:\"https://stock-news.skytigris.cn/v3/news\",params:#id:\"2667494036\",edition:\"fundamental\",auth_exemption:1,,,undefined,":{"share":"https://ttm.financial/m/news/2667494036?lang=en_US&edition=fundamental","thumbnail":"","is_english":true,"pubTime":"2026-09-15 12:00","share_image_url":"https://static.laohu8.com/e9f99090a1c2ed51c021029395664489","id":"2667494036","market":"fut","top_or_hot":-1,"title":"The upstream winners from Europe’s green steel transition","media":"Fastmarkets","content":"<div>\n<p>Europe’s green steel market is usually discussed in terms of the price premium paid for finished products, but steelmakers are unlikely to retain the entire additional value. As lower-emission ...</p>\n\n<a href=\"https://www.fastmarkets.com/insights/the-upstream-winners-from-europes-green-steel-transition/\">Source Link</a>\n\n</div>\n","source":"fastmarkets_highlight","html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>The upstream winners from Europe’s green steel transition</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nThe upstream winners from Europe’s green steel transition\n</h2>\n\n<h4 class=\"meta\">\n\n\n2026-09-15 12:00 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://www.fastmarkets.com/insights/the-upstream-winners-from-europes-green-steel-transition/><strong>Fastmarkets</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>Europe’s green steel market is usually discussed in terms of the price premium paid for finished products, but steelmakers are unlikely to retain the entire additional value. As lower-emission ...</p>\n\n<a href=\"https://www.fastmarkets.com/insights/the-upstream-winners-from-europes-green-steel-transition/\">Source Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":"SLX","symbol_name":"VanEck Steel ETF","start_time":0,"source_url":"https://www.fastmarkets.com/insights/the-upstream-winners-from-europes-green-steel-transition/","article_id":"2667494036","we_media_id":null,"thumbnails":[],"rights":{"source":"fastmarkets_highlight","url":"https://www.fastmarkets.com/insights/the-upstream-winners-from-europes-green-steel-transition/","rn_cache_url":null,"directOrigin":true},"url":"https://stock-news.laohu8.com/highlight/detail?id=2667494036","pubTimestamp":1789444800,"columns":[],"sourceInfo":{"source_id":"fastmarkets_highlight","name":"Fastmarkets"},"weMediaInfo":null,"summary":"Fastmarkets’ latest outlook shows how hydrogen-based DRI, natural gas-based DRI and high-quality scrap could capture a growing share of Europe’s green steel value pool","collect":0,"end_time":0,"defaultTopTitle":"fastmarkets.com","property":[],"viewcount":null,"language":"en","relate_stocks":{"SLX":"VanEck Steel ETF"},"translate_title":"欧洲绿色钢铁转型的上游赢家","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"SLX":1.5},"content_text":"Europe’s green steel market is usually discussed in terms of the price premium paid for finished products, but steelmakers are unlikely to retain the entire additional value. As lower-emission production scales, part of the value created is expected to move upstream through higher prices for the feedstocks that make deeper decarbonisation possible. This is particularly relevant where those feedstocks are scarce, difficult to scale quickly or have limited substitutes.\nFastmarkets’ latest analysis assesses how much additional value suppliers of key feedstocks could capture from Europe’s transition to lower-emissions steelmaking. It considers each feedstock’s contribution to emissions reduction, the structure and concentration of supply, and the green steel premium available downstream. Hydrogen-based direct-reduced iron is best positioned to capture this value, followed by gas-based DRI, while scrap has the most limited potential at an aggregate market level.\nThe size and timing of these opportunities will not be constant. They will depend on carbon prices, the pace at which new DRI and EAF capacity comes online, the availability and quality of scrap, and the ability of steelmakers to switch between metallic inputs. As these conditions evolve, the green steel transition could therefore create a substantial new value pool upstream.\n\nWhere the green steel value pool is created\nThe emission intensity of finished steel depends heavily on its metallic inputs. Higher scrap use avoids much of the emissions associated with producing virgin iron, while DRI can replace carbon-intensive iron produced through the blast-furnace route. Among metallics, hydrogen-based DRI offers the deepest reduction, provided the hydrogen and electricity are themselves produced with low emissions.\nIn the near term, much of the premium paid for green steel is required simply to compensate producers for the higher cost of lower-emissions production. From 2029, however, the economics begin to shift. The progressive phase-out of free EU ETS allowances raises the cost of conventional production, while improving economics for lower-emissions technologies reduce the incremental cost of producing greener steel. This creates a larger pool of value beyond simple cost recovery that can be shared across the value chain.\nAt the same time, increasing capacity of EAFs increase the demand for suitable metallic inputs.  Projects already under construction and with FID will expand European HRC capacity from EAF from 5 million tonnes per year in 2025 to 19 million tonnes by the end of this decade, but there are many more project announcements, and, depending on market conditions there is room for EAF capacity to expand to 50 million tonnes by 2035. This would increase requirements for scrap and DRI substantially. Suppliers of scarce feedstocks are therefore in a better position to capture part of this surplus through higher prices.\n\nHow that value pool is captured\nFastmarkets’ modelling estimates the value available to upstream feedstock producers by comparing the additional cost of using each feedstock in lower-emissions steelmaking with the premium that the resulting finished steel can command. Once the incremental production cost has been recovered, the remaining premium forms an additional value pool that can be shared across the supply chain.\nBecause a significant part of the emissions reduction is enabled by lower-emission metallic inputs, Fastmarkets allocates this capturable value across the relevant feedstocks based on their contribution to decarbonisation and their ability to capture value in the market. The resulting estimate represents the potential additional upside that feedstock suppliers could realise above their forecasted spot price.\n\n\nHydrogen-based DRI captures the largest upside\nHydrogen-based DRI is expected to capture the largest share of upstream value. This is not just because it is expensive to produce. It combines substantial emissions reduction potential with relatively constrained supply. It is also critical to producing HRC in the lowest-emissions buckets, where buyers are expected to have the greatest willingness to pay for deeper decarbonisation. This gives Hydrogen based-DRI producers greater scope to capture part of the value generated in the finished steel market.\nUnder the base scenario of Fastmarkets’ green steel forecast, the modelled value capture potential for hydrogen-based DRI increases from around €4 per tonne in 2029 to above €50 per tonne by 2035.\n\nNatural gas-based DRI occupies the middle ground\nGas-based DRI offers a smaller value-capture opportunity that is expected to tail off quickly. It can materially reduce emissions relative to blast-furnace iron and remains substantially cheaper than hydrogen-based DRI, making it an attractive transition feedstock for flexible EAF producers. Its decarbonisation potential is lower than that of hydrogen-based DRI, however, while its supply base is already more established and competitive.\nIts pricing power is also constrained by substitution in both directions. At lower EUA prices, steelmakers can rely more heavily on pig iron where economics allow. As carbon prices rise, hydrogen-based DRI becomes increasingly competitive while delivering deeper emissions reductions. Gas-based DRI therefore occupies a narrower middle ground.\nAs a result, while Fastmarkets expects merchant gas DRI prices to increase over the next decade, the upside potential is more limited.\n\nScrap has a lower value capture potential but remains strategically important\nScrap has the least ability to capture additional upside value in Fastmarkets’ modelling. Scrap is traded through a relatively mature and competitive market, limiting supplier bargaining power compared with the more concentrated and nascent market for low-emissions DRI.\nThis does not mean scrap prices will remain weak. Fastmarkets forecasts significant price increases over the decade, with the green steel transition contributing to tighter demand. Rather, much of this tightening is already reflected in the underlying scrap price outlook, leaving less scope for suppliers to capture an additional premium above the forecasted spot price.\nNevertheless, scrap remains the cheapest immediately available route to reducing steelmaking emissions and is expected to play a major role across almost every new EAF production pathway. The rapid build-out of European EAF capacity therefore creates a substantial structural increase in demand.\nThe aggregate picture also masks an important quality constraint. Flat steel products, particularly automotive-grade HRC, require metallic inputs that can deliver tight specifications and low residual levels. As EAF production expands, prime and other high-quality scrap grades could therefore become considerably more valuable than the broader scrap market suggests. Their availability is limited, while lower-quality scrap cannot always be substituted without affecting steel quality.\nThis constraint also strengthens the link between the scrap and DRI markets. Significant volumes of DRI, HBI or pig iron will still be needed alongside scrap to dilute residuals and maintain product quality. The green steel transition may therefore lift the strategic value of high-quality scrap substantially, while leaving the greatest incremental value-capture opportunity with the metallics needed to complement it.\n\n\nEUA prices determine the value pools up for grabs\nEUA prices are the largest source of variation in upstream value capture. Under Fastmarkets’ current-policy base ETS scenario, rising carbon costs progressively increase the value created by replacing pig iron with lower-emission inputs This improves the competitiveness and utilisation of EAF-based production and, in turn, strengthens demand for hydrogen-based DRI, gas-based DRI and scrap.\nThe effect is materially weaker under a policy-moderation scenario. Lower EUA prices allow conventional production routes to remain competitive for longer, reducing the incentive to maximise utilisation of lower-emissions capacity. Demand for alternative metallics grows more slowly as a result, weakening the ability of upstream suppliers to capture additional value.\nThe impact becomes increasingly significant over time. By 2035, Fastmarkets’ modelling indicates that the value captured by feedstock suppliers is, on average, around 90% higher under the current-policy scenario than under a policy-moderation scenario. Carbon prices therefore influence not only the pace of the steel sector’s transition, but also how much of the resulting value pool is ultimately available to upstream feedstock producers.\n\n\n\nTrade will decide where the premium lands\nNot all this value created by Europe’s transition will remain within the region. Imported HBI and DRI from regions with cheaper gas, electricity or hydrogen, including the Middle East and North Africa, could allow European mills to decarbonise without building fully integrated ironmaking capacity. At the same time, rising domestic EAF demand could retain more European scrap that is currently exported, reshaping established trade flows.\nCarbon policy will ultimately determine how much value the green steel transition creates upstream, while trade, competition and contracting structures will decide who captures it. Hydrogen-based DRI offers suppliers the greatest potential capture rate, while scrap’s widespread use makes it strategically important despite its smaller supplier margin. Gas-based DRI will remain a valuable transitional option but faces competition from both conventional and deeper-decarbonisation alternatives.\n\n\n\n\n\n\nWho captures Europe’s green steel premium?\nFeedstock value forecasts across DRI, scrap and carbon scenarios.\n\nAccess the report","kind":"highlight","is_publish_news":true,"is_publish_highlight":false,"is_publish_live":false,"is_publish_wemedia":false,"editions":null,"column":"","sentiment":"0","news_tag":"","news_rank":0,"isVideo":false,"video":null,"symbols":[],"gpt_button":0,"need_auth":false,"need_login_tip":false,"code":"91000000","status":"200"}}}