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Oceania Steel Market Booming: Green Steel Investments Drive Activity Surge Amidst Supply Chain Transformation

Oceania’s steel market displays strong growth driven by green steel initiatives. The rise in plant activity coincides with substantial investments outlined in “Rio Tinto invests $22 million in Calix low-carbon steel project,” “Fortescue advances green iron project using Metso’s hydrogen-based DRI and electric smelting furnace,” and “Rio Tinto invests A$35 million in Calix’s Zesty™ plant to advance low-carbon steelmaking“. These investments and expansions are aimed at green steel production in Western Australia.

Bar chart and satellite map of steel production activity in Oceania

Overall, the average steel plant activity in Oceania shows volatility. October showed a significant dip to 27.0% after a high of 46.0% in September. The numbers represent activities across the measured sites and may not fully reflect total regional output in Oceania.

BlueScope New Zealand Steel Glenbrook: This integrated steel plant in South Auckland, New Zealand, utilizes DRI technology and BOF for its 650 ttpa crude steel capacity. Activity at the Glenbrook plant has fluctuated, increasing from 35% in June to a peak of 47% in October. There is no readily apparent link from the news articles regarding investments in Western Australia to the plant’s activity changes in New Zealand.

GFG Liberty Sydney Steel Mill: With a 750 ttpa capacity, this EAF-based mill produces long steel products for building, infrastructure, and energy sectors. The Sydney mill exhibited a significant surge in activity from 47% in June to 89% in October, far exceeding the Oceania average. No direct connection to the investments in green steel production in Western Australia described in the news articles can be established.

GFG Liberty Laverton Steel Mill: Operating an EAF with a 660 ttpa capacity, the Laverton mill in Victoria produces long products like reinforcing bar. The Laverton mill has consistently maintained high activity levels, fluctuating narrowly between 70% and 74% from June to September, before dropping to 66% in October. No direct connection to the investments in green steel production in Western Australia described in the news articles can be established.

The investments by Rio Tinto and Fortescue in green steel projects in Western Australia, as detailed in “Rio Tinto invests $22 million in Calix low-carbon steel project,” “Fortescue advances green iron project using Metso’s hydrogen-based DRI and electric smelting furnace,” and “Rio Tinto invests A$35 million in Calix’s Zesty™ plant to advance low-carbon steelmaking,” signal a long-term shift in Oceania’s steel production landscape. While no immediate impact on the activity of the measured plants can be proven, these investments suggest a potential future supply shift towards greener steel options.

Evaluated Market Implications:

Given the increased activity and investments in green steel production centered in Western Australia, steel buyers should consider the following:

  • Potential Regional Supply Shift: While the analyzed data lacks direct causal effects of these new investments on plant production in different regions, monitor steel sourcing options from Western Australia, which could see increased availability of green steel in the medium term.
  • Pricing Strategy: Factor in potential premiums for green steel products as production scales up. Given the “Rio Tinto invests $22 million in Calix low-carbon steel project” and “Rio Tinto invests A$35 million in Calix’s Zesty™ plant to advance low-carbon steelmaking” articles emphasize utilizing lower-grade iron ore, explore opportunities to secure contracts that reflect potential cost advantages, while acknowledging likely initial investment costs.
  • GFG Liberty Sydney Steel Mill Opportunity: The spike to 89% activity in October from 47% in June signals a need to explore procurement opportunities out of Sydney, especially if the price is right due to increased activity. This activity does not directly correlate to the news articles, so buyers must perform due diligence to ascertain the underlying causes and future sustainability of the production volume.