Davis Index: Market Intelligence for the Global Metals and Recycled Materials Markets

Salzgitter AG (Salzgitter) has reached an agreement with local authorities and industrial partners to initiate a feasibility study on the construction of a direct reduced iron (DRI) plant at the deep-water port of Wilhelmshaven in Lower Saxony, according to a press release on June 24.


The study focuses on the prospect of building a DRI plant and developing the necessary infrastructure for supplying it with raw materials, natural gas and hydrogen, with Salzgitter expecting the results to be available by March 31, 2021 at the latest.


In November, Salzgitter ordered a 2.2MW Proton Exchange Membrane (PEM) electrolyzer from Siemens Gas and Power; marking the company’s fore into trialling hydrogen-based steel production as part of its strategy towards low CO2 emissions through its SALCOS technology concept.


The German steel producer anticipates that it will take delivery of the new hydrogen electrolyzer and put it into commercial operation by the end of 2020, which it expects will cover requirements at its main steelmaking plants.


Swedish-based steel producer, Ovako, first successfully trialled the use of hydrogen-powered commercial steelmaking, replacing liquified natural gas (LNG) as the source of high-temperature heat, at its pilot project at the Hofors steel mill in April.


If the findings of the feasibility study are successful, the industrial partners plan follow-up activities in the form of joint implementation and execution of the project into a commercially viable operation.


The target will be to produce 2mn mt/year of DRI that will be transported by rail to Salzgitter and converted into high-grade, environmentally compatible strip steel products at the Salzgitter Flachstahl GmbH’s integrated steelworks.


Salzgitter’s integrated steel operations annually produces 8mn mt  of carbon, mainly due to the use of coking coal used for the iron smelting process. The company highlighted the potential for a drastic reduction in carbon allowances under the EU Emissions Trading System which could raise costs.


Commenting on the launch of the feasibility study, Salzgitter CEO Prof. Dr.-Ing. Heinz Jörg Fuhrmann noted that Germany’s National Hydrogen Strategy launched in March leads the way for the realization of a ground-breaking green steel hydrogen project of this kind. 

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