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The investment will go towards increasing production in specific areas, launching new sizes and steel products, logistics developments, cutting CO2 emissions and energy saving initiatives
The funds will largely come from the company’s own cash flow, in addition to a credit line from a pool of 10 banks, Marcegaglia said.
“The green transition brings consequences to the production of new steel products, so we are also focusing on that,” he said.
The steelmaker is also eyeing new acquisitions to grow, mainly in Europe. It recently agreed to buy the stainless-steel long products division of Finnish steelmaker Outokumpu, which includes an electric arc furnace mill for specialty steels in Sheffield, north England.
Increased EAF capacity
Once it has received the green light from antitrust authorities for that deal, Marcegaglia is planning to increase production at the Sheffield EAF.
The EAF is currently operates at around half of its nameplate capacity, producing 250,000 mt/year of billets and slabs, which will be also used for Marcegaglia’s flat stainless division.
“The good thing about this EAF is that it can produce billets as well as slabs, so we are working with some steelmakers to convert our slabs into good quality black stainless coils,” Marcegaglia said. “Producing our own slabs and billets will give us the possibility to be less dependent on external supply.”
The Marcegaglia specialties division, where the new Outokumpu assets are likely to be placed, processes around 700,000 mt/year of specialty bars and stainless steels for the production of tubes, flat products and drawn bars.
Outokumpu’s monthly alloy surcharge for 304-grade stainless flat products stands at Eur3,143/mt for July, up from Eur2,421/mt in January. The company’s surcharge for 304-grade cold-drawn bars is at Eur4,723/mt, up from Eur3,483/mt in January.
Increase production and sizes
The company is also looking to increase its production at the Tunis Acier re-rolling coils mill in Tunisia in partnership with Sideralba.
Production is set to be increased from the current 200,000 mt/year to 400,000 mt/year of steel flat products by 2023.
The company also plans to introduce new sizes and products at its plate mill at San Giorgio di Nogaro, with a focus on different industrial segments, including ship building and wind power end-users, he said.
Marcegaglia has already increased its plate production at the site to 800,000 mt/year from 650,000 mt/year.
Low carbon steel
In 2021, Marcegaglia became a minority shareholder of H2 Green Steel, which plans to use green hydrogen at its first low carbon steel plant under development in Boden, northern Sweden.
It has the right to a 200,000 mt/year offtake of low carbon steel once the mill is operational.
“We will continue to look into this kind of venture and increase our commitment in H2GS, also considering it will not be easy to see new greenfield ‘green’ steel plants like this,” Marcegaglia said.
In the meantime, the company will work with other companies based near its re-rolling center in Ravenna, north Italy, on a carbon capture and storage project, which will be the first of this kind in Italy and is expected to be operational by 2024.
— Annalisa Villa