OSLO, Jan 12 (Reuters) - Swedish steel startup Stegra said on Monday that Thyssenkrupp Materials Processing Europe has signed an agreement for the delivery of steel from Stegra's plant being built in
Stegra Partners with Thyssenkrupp Materials for Green Steel Supply
Stegra's Green Steel Initiative and Partnership
By Marie Mannes
Details of the Partnership
STOCKHOLM, Jan 12 (Reuters) - Swedish green steel startup Stegra said on Monday that it has secured Thyssenkrupp Materials Processing as its first customer for non-prime steel from a hydrogen-based plant it is building in northern Sweden that is due to start operations next year.
Challenges in Green Steel Production
Stegra said in October that it was seeking an additional $1.1 billion in financing to complete construction of the plant, but it has yet to announce an agreement on the funding. A company spokesperson said on Monday that Stegra expected to conclude its financing discussions in the first quarter.
Investment and Financing Needs
Formerly known as H2 Green Steel, Stegra is one of several projects underpinning Sweden’s ambition to become a leader in Europe’s green industrial transition, supported by access to low‑cost, carbon‑free electricity. But those efforts have faced setbacks including Stegra's own financing challenges and the collapse of battery maker Northvolt.
Market Response and Future Outlook
Under the deal signed with Thyssenkrupp Materials Processing, part of German conglomerate Thyssenkrupp through unit Thyssenkrupp Materials Services, the German company will buy significant amounts of non-prime steel from 2027 to supply customers in various industries across Europe, Stegra said in a statement.
Non‑prime steel is a by‑product that does not meet the highest quality standards required for certain applications, but is still a strong and durable material eligible for various uses.
"A partner for non-prime steel is important for the ramp-up of our steel mill and we see this as the start of a long-term partnership," Stegra's commercial chief Stephan Flapper said in the statement.
While several of Stegra’s customers, including Microsoft and Mercedes-Benz, are also investors in the company, Thyssenkrupp Materials Services said its cooperation with the Swedish startup was limited to the purchase of non‑prime steel and that it had no plans to become financially involved with Stegra.
Across Europe, a number of green steel projects have been delayed or run into difficulties as the technology remains relatively new and investment costs high.
The Stegra plant had been due to open this year but has now been delayed until 2027.
"This is a groundbreaking partnership in the steel industry," a Stegra spokesperson said.
"Germany - which doesn't have access to green, cheap electricity the way we do in northern Scandinavia - gets other complementary routes in their transformation and this is an example of that."
(Reporting by Terje Solsvik in Oslo and Marie Mannes in Stockholm; Editing by Stine Jacobsen, Susan Fenton and Hugh Lawson)
