Basque steel mills reinvent themselves and bet on hydrogen and the automotive industry
Basque steel mills reinvent themselves in the face of the energy crisis, with the start of a general investment process. Companies emerge from the Covid crisis determined to open their horizons to look at more specialized productiona, further away from their traditional consumer sector, oil & gas, and with products with higher resistance to pressure, corrosion and temperature.
The steel industry is now committed to producing less volume but focusing on specialized or more resistant products to opt for renewables and secure customers who demand special steel, such as hydrogen and automotive.
Basque steel mills reinvent themselves: The Basque Country is a “pole of excellence” in the steel field, as recognized by Brussels, with a dozen leading companies, including some of the largest steel mills. The steel industry is undoubtedly one of the most traditional industries in the territory, and has had to reinvent itself to survive Chinese competition in the first place and, to face the energy crisis and weather the current high electricity costs. Another of the significant data of the new trend of Basque steel, as pointed out by the publication Crónica Vasca is that almost all the large groups in the sector are part of the consortium integrated in the creation of the Basque Hydrogen Corridor.
Hydrogen, tractor element
In the last twenty years, the advisability of a merger of companies to consolidate the sector has repeatedly been put on the table, a strategy that has not yet taken hold. The strategy of the companies is to open their sights to a more specialized product: They plan to make fewer tons, but of higher quality, as summarized by Jesús Esmoris, the CEO of Tubacex. This tube manufacturer located in Llodio plans to reduce dependence on oil & gas, its usual business, which until very recently represented 80% of its sales, to face new challenges both in the energy field, especially hydrogen , as well as in other sectors. The company already maintains a presence in the aeronautical sector, for which it manufactures high-resistance tubes for aircraft engines, as well as in the food, pharmaceutical and automotive industry.
For its part, and given the complicated scenario that oil&gas is handling, another large Basque tube manufacturer, Tubos Reunidos, contemplates a similar process of reinvention and innovation. The quality of the products basically supposes the greatest resistance to pressure, corrosion and temperature, but also manages aspects such as weight. In this context, the pipelines are forced to innovate to offer cutting-edge products that can offer new energy sources, such as hydrogen. In this way, it is no coincidence that large groups such as Arcelor Mittal, Sidenor, Nervacero, Tubacex and Tubos Reunidos have been part of the Basque Hydrogen Corridor Association since its inception, the great Basque project of the energy industry in full development. This is so, because clearly hydrogen is a fuel that requires specific materials for its storage and transportation, which entails an opportunity for pipe manufacturers.
Tubos Reunidos recently announced a strategic plan for the next five years, during which it will develop large investments, after receiving 113 million from the State to develop new materials and focus on renewables. With this objective, it will concentrate its investments in new technologies in a single steel plant in Amurio, which means the closure of the current Sestado steelworks, while the old Tubular Products is aimed at manufacturing with new materials.
Automotive, more resistant parts
In turn, Sidenor has completed last year an investment in technological innovation at its Basauri plant worth 130 years, completing a five-year program. This new stage has focused on reinforcing the R&D unit, one of the company’s priorities, which is very present in the automotive industry, which demands very resistant small parts, in which there are no Chinese competition.
Also Arcelor Mittal, in turn, reoriented its production to this sector in its new project for the ACB in Sestao, after a long stop. Thanks to a new research center, the factory turned to higher-strength steels to gain a foothold in the automotive industry.
Regarding the Basque factories of the Celsa Group, Nervacero and Celsa Atlantic (formerly Laminaciones Arregui), await their turn to access the SEPI bailout, which has a fund of 550 million euros, to undertake new investments in technology that make their activity more competitive, lowering the cost of processes and thus gaining access to new customers. The presence of the group in several projects linked to hydrogen indicates that the company has in mind this objective of participating in projects involving renewable energy sources. Nervacero currently manufactures corrugated products for construction and Celsa Atlantic, welded steel tubes.
Basque steel mills reinvent themselves – Reinva
Finally, the Olarra steelworks (Loiu) is also facing this same transition towards high-end stainless steels. The company, integrated into the Italian group Rodacciai, has weathered the pandemic without setbacks despite high electricity costs.
Reinva collaborates with the chemical, petrochemical and gas industry, with solutions adapted to the needs of the client, from the engineering activity teps, to the commissioning and start-up, and maintenance of thermal installations. Reinva’s contributions cover the different phases of production, since the generation of steam and hot water are used in a good number of exploration, production and refining processes.
In the field of hydrogen, Reinva deals with implementing hydrogen combustion systems that operate with this fuel or with a mixture of fuels, depending on the needs of its customers. The direct combustion of hydrogen is expected to be used in the near future in industrial processes, such as steel mills and foundries, which require very high temperatures or other specific characteristics. From a technical point of view, the first challenges that the industry faces in its combustion systems for the use of hydrogen occur in valves and pipes that must dimensioned, in cases of blending with a hydrogen percentage of less than 20% of the total, as well as the modifications made to the equipment itself, which must be technically adjusted to the characteristics of this sustainable fuel.