Page 28 - bne_October 2021_20211004

28 I Companies & Markets
bne October 2021
Fossil fuel-free sponge iron produced by the Hybrit project (Credit: Hybrit)
Steel is produced using two methods: the blast furnace-basic oxy- gen furnace method (BF-BOF) or the electric arc furnace (EAF) method. The BF-BOF method, using coking coal, is the primary process to convert iron ore into processed iron and then into steel. EAF, much less emissive, is mainly used in turning scrap, basic pig iron (BPI) or hot-briquetted iron (HBI) / direct reduced iron (DRI) into steel. Now, EAF mini-mills produce around 28% of world steel, though they account for only 8% of the CO2 gen- erated by the steel industry. At the same time, direct reduction used in the production of HBI/DRI is considered one of the most promising areas to for the development of cleaner metallurgy.
Switching to greater EAF processing will, by itself, be a big step on the route to greener output as emissions are about 1.5 tonnes per tonne of steel, while those from the conventional blast furnace-converter cycle are 2.3 tonnes.
The demand is there for the shift. Steel customers seek cleaner supply chains. Investors are setting standards for cleaner portfolios, something which could, or should, shift a share price premium to cleaner producers if all other things are equal. And finally, the political will to force greener production is evident as the European Union considers border carbon taxes.
The world’s largest iron ore players such as Vale, Rio Tinto, BHP and Fortescue Metals produce iron ore concentrate, which is suitable for the BF-BOF method, consistent with
current production. These companies have just announced plans to develop projects to produce feedstock for the EAF method, yet this requires time to get to full-scale production. Shifts in this area may imply greater costs.
Currently, the leading supplier of HBI is Metalloinvest (controls around 50% of global market), a Russian metals and mining company that is heavily investing in the expansion of HBI production facilities. In 2024, it plans to launch two such plants that are already designed to use 100% hydrogen instead of natural gas. The company aims to sell its shares in an IPO in 2022 and analysts anticipate a valuation of over $20bn, as Bloomberg reported last month.
Steel is the most commonly used metal in the world. It’s
in everything from cars and construction products, to refrigerators and washing machines, to cargo ships. The industry is responsible for about 8% of global greenhouse gas (GHG) emissions. It will remain front and centre as a target for reduction in global net-zero scenarios.
“Steel customers seek cleaner supply chains. Investors are setting standards for cleaner portfolios, something which could, or should, shift a share price premium to cleaner producers if all other things are equal.”
The first delivery of carbon-free steel shows leadership. At the same time, steel production is a process involving multiple inputs and steps. Cutting emissions is a work in progress. Greater use of EAF and HBI feedstock will do a lot of work towards lower emissions. The demand for cleaner steel is there and taxes on carbon emissions through the production cycle are very likely, so look for the industry to change.
We have launched a new publication bneTech
A FREE newsletter covering technology, blockchain, ICOs, TMT and all aspects of the "new economy" in Emerging Europe, Central Asia and MENA.
Click the button to read the latest issue
bne:Tech
Contents
Top stories
Russia’s top retail and tech companies
March 2020
www.intellinews.com
@bneintellinews
join forces to hunt for innovations in rest of the world
Ukraine-born startups raised more than half a billion dollars in 2019 Russian video streaming platforms gain speed
Cloud services take off in Russia SEMrush to SEO success
Leaders
Russia’s internet giant Yandex announces growing and more diversified revenues in 2019 Russian telecom major Rostelecom misses on earnings in 4Q19, cash flow solid
Investment
the
2
4
5 6 8
9
10 12
13
Russia’s top retail and tech companies
join forces to hunt for innovations in
the rest of the world
BAs Russia’s retail and tech sectors consolidate, the leading companies are turned their gaze outwards to hunt for
World Bank approves $35mn project
to modernise Kyrgyz tax administration and statistical system 13 Romanian online home decoration
retailer raises €3.5mn in bonds 14 Russian billionaires Abramovich, Gutseriev, said to invest in Telegram
crypto project TON 14 Russian fund Da Vinci Capital gets
€30mn from Germany’s DEG to invest
in Ukraine, Belarus and Kazakhstan 15
Fintech & E-commerce 16
Russian e-commerce major
Wildberries to add self-employed
vendor products to offering 16 Russian Dixy retailer to launch online sales with Ozon 17 Valuation of Sistema’s e-commerce
asset Ozon boosted to $1.8bn 17
Telecom 19
Makedonski Telekom’s net profit
up 6% y/y in 2019 19 Romanian telco Digi grows by double
digit rates in 2019 19 Russia could postpone 5G rollout
from 2022 to 2024 20
NIBs 21
bne:Tech
new technology and innovation.
See page 2
Ukraine-born startups raised more
than half a billion dollars in 2019
In 2019, the venture capital and private equity funding volume for Ukrainian and Ukrainian-founded tech startups reached $544mn (up from $323mn in 2018 and $265mn in 2017), says AVentures Capital’s latest industry report ”DealBook of Ukraine”,
reports Adrien Henni of Ukraine Digital News. See page 4
SIGN UP HERE
www.bne.eu