麦肯锡 -电弧炉炼钢：告别高炉时代 EAF steel Beyond the blast furnace

June2026

Mcsey

GlobalInstitute

Investmentcase

EAFsteel:Beyondtheblastfurnace

Globalsteelinvestmentisflat,butDRI-EAFproductionisgainingshareinadvancedeconomies

byKarelEloot,JeffreyLorch,DirkDurinck,AnnaKortis,andOlivierBus

EAFsteel:Beyondtheblastfurnace2

Steelisthebackboneoftheglobaleconomy.Itistheskeletonofmostofourinfrastructure,

buildingsandfactories,andacriticalcomponentofmanyproductshouseholdsrelyon,fromcarstodishwashersandbedframes.Inindustrializedcountries,in-usestocksofsteelrangefrom

11tonsand16tonspercapita.1

Theglobalsteelmarketisagameofcosts,shapedbyenergypricesandpersistentovercapacity.In2024,theindustryhadcapacitytoproducemorethan2.5billiontonswhendemandwas

onlyabout1.9billiontons.2MuchofthisexcesscapacityisinChina,whichrampedupsteel

manufacturingtosupportitsrapidurbanizationandindustrialization,compressingmarginsfor

steelproducersglobally.However,geopolitics,sustainabilityconsiderations,andadvancesin

technologyarechangingtherulesofthegame.Thisisleadingtoamorefragmentedindustry

increasinglydeterminedbyregionalpoliciesandresourceconstraintsthatareshiftingthetermsofglobalcostcompetitionintheindustry.

ThisinvestmentcaseisoneoftenthatarethefoundationoftheMcKinseyGlobalInstitute’s

report,Catalyzingcompetitivess:Whereinvestmenthappensandwhy.Thereportexamineshowinvestmentpropelscompetitiveness,andviceversabyanalyzingthevariationincostsacross

industriesinregionsaroundtheworld.

DiferentproductionprocessespredominateinChina,theMiddleEast,andtheUnitedStates

Globally,approximately70percentofcrudesteelisproducedwithblastfurnace–basicoxygenfurnace(BF-BOF)technology,whichusesironoreandmetallurgicalcoalasinputs.Electricarcfurnaces(EAF)canremeltprimescrap,aprocesspotentiallycombinedwithdirectreducediron(DRI)(seeSidebar:Steelmakingtechnologies).However,theproductionmixdifferssignificantlybyregion(Exhibit1).

EAFsteel:Beyondtheblastfurnace3

Exhibit1

Electricarcfurnacesteelmanufacturingisstillanemergingtechnology.

Splitpertechnologyin2024,%

2872

4159

6634

7129

9010

0255075100

World

Oman

US

India

Sweden

Germany

China

BOF1

70

100

Other1

EAF2

29

¹Blastoxygenfurnacesteelmanufacturing.

²Electricarcfurnacesteelmanufacturing

Source:Worldsteelinfigures2025;McKinseyGlobalInstituteanalysis

McKinsey&Company

TheUnitedStatesproducesapproximately70percentofitssteelwithEAF,partlyusingits

abundantscrapresources.TheMiddleEastisalsoabiguserofEAF.Forexample,Oman’ssteelindustryoperatesentirelyonEAFproduction,takingadvantageofthecountry’sabundant

naturalgasresources.InEuropeancountriessuchasGermanyandSweden,BF-BOFtechnologystillaccountsformostproductiontoday,butEAFisgainingtractionforenvironmentalreasons.

NewEuropeansteelinvestments,suchasSalzgitter’sSalcosfacilityinGermany,aregoinginto

DRI-EAF-basedplants,whichhaveasmallercarbonfootprint,andBF-BOFcapacityisgraduallybeingphasedout.

Bycontrast,BF-BOFfacilitiesaccountfor90percentofChinesesteelproduction.EAF

technologymostlypoweredbycoalproduces60percentofIndia’scurrentoutput,althoughthecountryisshiftingtoBF-BOFproduction(seesidebar“Steelmakingtechnologies”).

EAFsteel:Beyondtheblastfurnace4

Sidebar

Steelmakingtechnologies

Therearetwotypesofsteelproducts,

flatsteelandlongsteel.Flatsteel,such

assheets,coils,andplates,isusedwhensurfacequalityandtightchemistrycontrolmatter,suchasinproducingcars.Long

steel,suchasrebar,wirerod,andbeams,isusedinconstructionandinfrastructure,wherestrengthmattersmorethansurfacefinish.Thisinvestmentcasefocuseson

flatsteel.

Flatsteelcanbemeasuredatdifferent

stagesofproduction.Crudesteelis

thematerialbeforerollingandfinishing.

Semifinishedslabisthefirstsolidshape

aftercasting,anintermediateusedas

feedstockforrolling.Hot-rolled-coilis

afinishedflatproductandisthecore

commodityproduct,usedinconstruction,pipesandtubing,machinery,andservicecenters.Hot-rolledcoilisthecenterof

thevaluechainbecauseitisthestandardindustrialbasematerialfromwhichmanydownstreamproductsaremadeand

againstwhichflat-steelcompetitivenessisoftenassessed.

Hot-rolledcoilcanbemadeinseveral

ways.Blastfurnace–basicoxygenfurnace(BF–BOF)isthemostestablishedroute.

Ironoreisreducedusingmetallurgical

coal(coke)inablastfurnaceandrefinedinanoxygenconverter,orbasicoxygen

furnace.ThisproductionmethodhasthelowestcostwherecoalischeapbutalsothehighestCO₂emissions.

Scrapelectricarcfurnaceproduction

meltsrecycledsteel,emittinglessCO₂,

butresidualelementslimititsuseforflat

productswithoutdilutionfromvirginiron.

Directreducediron–electricarcfurnace,orDRI–EAFtechnology,usesnaturalgasandelectricityinsteadofcoaltoproducesteel.Thetechnology,whichisthefocusofthis

investmentcase,significantlyreducesCO₂emissionsandsoisgainingimportance

ascarbonpricingincreases.Ouranalysis

focusesonproducinghot-rolledcoilsteel,thestandardproductformostdownstreamflatsteeluses,usingDRI-EAFprocesses.

DRI-EAFcombinesdirectreduction,

electricmelting,ladlefurnace,casting,andhotstripmillproduction.Ironorepellets

arefirstconvertedintodirectreduced

iron,whichgivesthetechnologyitsname,usingnaturalgasorhydrogen.Thedirectreducedironisthenmeltedtogetherwithasmallershareofscrap,beforebeing

castintoslabandrolledintocoil.Inthe

productionconfigurationanalyzedhere,producersrelymainlyonvirginironunitsfromcaptivedirectreducediron,whichgivesthemtightercontroloversteel

chemistrythanusingonlyscrap.Hot-

rolledcoilrequiresmuchmorestringent

controlsonresiduals,metallicquality,andconsistencythanlongsteel,forwhichDRI-EAFtechnologyisparticularlywellsuited.

Scrapqualityvaries,andDRI-EAF

productiontypicallyreliesonprimescrap.Primescrap,suchasoffcutsandstampingreturnsgeneratedduringmanufacturing,islowinresidualsandsuitableforhigh-

qualityflatsteel.Obsoletescrapfrom

end-of-lifeproductssuchasvehiclesandbuildingscontainshigherlevelsofcopperandotherresidualsthataccumulate

throughrecyclingandlimititsdeploymentinmoredemandingsteeluses,suchasforconsumerappliances.

ComparedwithBF-BOFproduction,

DRI-EAFproductionismoremodular,

lessemissions-intensive,andtypically

fastertobuild.Itseconomicsdepends

moreheavilyonthecostandavailability

ofnaturalgasthanonminingscale.Thus,although60to70percentofhot-rolled

coilisstillproducedgloballyusingBF-BOFtechnology,DRI-EAFisstrategically

importantbecauseitisoneofthefew

scalablepathwaystomateriallylower

emissionsandthechosenbenchmarkedtechnology.

ThebusinesscaseforDRI-EAFdependsonnaturalgaspricesandpolicyincentives

Investmentsinsteeltechnologiesaremadebasedontheoptimalproductionrouteinalocation.RegionswithlownaturalgascostsorstrongpolicysupportattractinvestmentinDRI-EAF

technology,andinvestmentgoesintoBF-BOFtechnologyinareasthatarerichincoalandhavestronggrowingdomesticdemand.

TheinvestmentcaseforDRI-EAFproductiondependsonthreefactors.First,accessto

competitivelow-costnaturalgasforDRIandlow-costelectricitytopowertheEAFisneeded.Second,accesstokeymetallicinputs,especiallyDRI-gradeironoreandscrapmustbesecure.Third,supportivepolicyandtradeconditionscanlowertheinvestmenthurdle,especially

EAFsteel:Beyondtheblastfurnace5

inregionswhereDRI-EAFisnotthelowest-costproductionmethod.DRI-EAFcanplayan

importanttransitionalrole,butitslong-termcompetitivenessmaybeconstrainedbycompetingdemandfornaturalgasandlimitedavailabilityofhigh-qualityscrap.

TheMiddleEastandtheUnitedStatesarethusattractivelocationsforselectedDRI-EAF

investments,giventheirlownaturalgaspricesand,inthecaseoftheUnitedStates,ample

high-qualityscrapsupply.Oman,whichinthisresearchisaproxyfortheMiddleEast,producedthreemilliontonsofcrudesteelin2024,allofitusingEAF.TheUnitedStatesproducedabout

80milliontonsin2024,fourpercentofglobalproduction,70percentofwhichcamefromEAFproduction.3

InvestmentinDRI-EAFsteelmanufacturinginEuropereliesonpolicysupport.EU-27carbon

pricingundertheEUEmissionsTradingSystem(EUETS)increasesthecostsofBF-BOF.This

makesDRI-EAFproductionmoreattractiveonceallowancesarephasedoutandETSisinfull

force,orbeforethat,enablingcaptureofa“green”premium.4Plansarealreadyunderwayin

Europeformorethan17EAFandDRI-EAFsteelplantsthatwillproduceroughly40to50milliontonsoflow-carbonsteelin2030.5

GermanyisattheforefrontofEurope’sDRI-EAFsteeltransition,supportedbyheavysubsidies.Germanyproduced37milliontonsofcrudesteelin2024,2percentofglobalproduction.Some30percentofthatsteelwasproducedusingEAF.6TheSalzgitterSalcosprojectisanearlytestcaseforconvertinganincumbentBF-BOFflat-steelproductionfacilityintoaDRI-EAFplant

thatwilleventuallybepoweredbyhydrogen,althoughtheprojecthasbeendelayed.7Sweden,asmallersteelproduceratfourmilliontons,ispursuinghydrogen-poweredEAFvialow-costhydropower,thoughrecentprojectssuchasStegrahavestruggledfinancially.8

Inotherregions,BF-BOFproductionlinkedtolow-costcoalandstrongdomesticdemandare

amoreattractiveinvestment.ThistechnologyisdominantinmarketssuchasIndia,China,and

SoutheastAsia,wherenaturalgasandscrapavailabilityaremorelimited.Chinaaccountsfor

aroundhalfofglobaloutputandisthemainproducerofthe600milliontonsglobalovercapacity,sofurthercapacityadditionsarelikelytobemodest.

DRI-EAFcostsvarybyhalfacrosslocations,butBF-BOFinAsiaundercutsallDRI-EAFcosts

Aspartofourcomparisonofcompetitivenessacrossindustriesandregions,weisolatethe

driversthatexplainwhysomeregionsaremoreorlesscompetitiveinacomparabletechnology.Inthiscase,werecognizethatactualsteelinvestmentdecisionsareinfluencedbyarangeof

localfactors.

Forthispurpose,webenchmarkalllocationsagainstacommonproductionroute,DRI-EAF,andacommonproduct,hot-rolledcoil,inaplantwith2.5-million-toncapacity.Thiscreatesalike-for-likeanalyticalbaselineandallowsustocomparetheroleofnaturalgas,electricity,rawmaterials,labor,logistics,andcarboncostsinshapingregionalcompetitiveness.Inthisbenchmark,Omanisusedasthebasecasebecausesignificantinvestmentsareunderwaythere,includingin

DuqmandSohar.WebenchmarkourbasecaseagainstsimilarlysizedfactoriesusingthesametechnologyinChina,Germany,India,Sweden,andtheUnitedStates.Comparisonswithothertechnologiesandwhatdrivesactualinvestmentdecisionsareaddressedsubsequently.

EAFsteel:Beyondtheblastfurnace6

Sidebar

Methodology

Thisinvestmentcasecomparesthecostsofadirectreducediron–electricarcfurnace,orDRI–EAFsteelplant,invariousgeographiestounderstand

whatmakessomeregionsmorecost-

competitivethanothers.Ourlevelized

costmethodologyconvertsaproject’s

fulllifecycleeconomicsintoasingleunit

cost.Itcanbeinterpretedastheunitpricethatwouldmakeaproject’snetpresent

valueequaltozerooveritsentirelifecycle,whichistheminimumpricethatmakes

theprojectviableandisinlinewiththe

macroeconomicconceptoflong-term

marginalcosts.Theconceptiscommonlyappliedintheenergysector,whereitis

knownasthelevelizedcostofenergy.

Wedonotconsidertaxes,subsidies,andexternalities,whichvaryandarehardtopindown.

Thecalculationsareinformedby

McKinsey’sworkacrossthesteelindustry,whichprovidesourunderstandingof

thecapitalexpenditure,labor,energy,

materials,andotherinputs,aswellas

time,typicallyneededtobuildandoperateasteelplant.Wepricetheinputsatthe

typicalcostsinageography,drawingon

proprietarydatabasesmaintainedbyMGI’sEconomicsResearchteam,andatthe

typicalweightedaveragecostsofcapital,drawingonMcKinsey’sValueIntelligenceplatform,acurateddatabaseofthe

financialsofcompaniesglobally.

Benchmark:MiddleEast(Oman)

Thelevelizedcostofsteelproductionmeasurestheaveragecostofproducingonetonofhot-

rolledcoiloverthelifetimeofaproject.Acrossthesixlocations,levelizedcostsrangefromabout$495pertoninOmantoabout$750pertoninSweden(Exhibit2).TheUnitedStatesandIndia

arethesecond-andthird-mostcompetitivelocations,withapproximately10to15percenthigherlevelizedcosts,respectively,comparedtoOman.InChina,DRI-EAFcostswouldbe25percent

higherthaninOman—certainlyonereasonthecountryhaslargelystucktoBF-BOF.ThecostgapismateriallylargerinEurope,wherelevelizedcostsare45to50percenthigher,mostly

drivenbyhighernaturalgasprices.

EAFsteel:Beyondtheblastfurnace7

Exhibit2

OmanproducesDRI–EAFsteelatlowcost,thankstoitslowenergycosts.

EnergyOtheroperatingexpendituresCapitalexpenditures

LevelizedcostsofDRI–EAFsteelproduction$/metricton,beforetaxesanddirectsubsidies

Labor

610

7535725

7535750

65495

7535560

65570

65

335

340

70

130

125

170

280

300

Oman

(basecase)

UnitedStates

India

China

Germany

Sweden

350

325

375

360

Note:Figuresmaynotsum,becauseofrounding.

¹Directreducediron–electricarcfurnace(DRI-EAF)productionofhot-rolledcoil(HRC).

Source:S&PGlobalMarketIntelligence;McKinseyMineSpans;McKinseyGlobalInstituteanalysis

McKinsey&Company

Energycosts(naturalgasandelectricity)arethemaincontributortothegapinlevelized

costbetweenlocations.Foronetonofhot-rolledcoilsteel,about11gigajoulesofnaturalgasisrequired,70percentofwhichisusedintheDRIstep.Theelectricityusageintheprocessisabout700kilowatthours,whereabout70%isusedtopowertheEAF.Overall,theDRI-

EAFprocessusesaboutfourtofivetimesmoreenergyfromnaturalgasthanfromelectricity(Exhibit3).

Exhibit3

EAFsteel:Beyondtheblastfurnace8

Electricitypowersthecoremeltingstepinsteelproduction,andnaturalgasisthesourceofmostenergyinaDRI–EAFprocess.

DRI–EAFsteelmakingprocess,requiredinputspermetrictonofhot-rolledcoil

DRI

STAGESDirect

reduction

ironplant

Liquidsteel

Electricarc

furnace

Liquidsteel

Ladlefurnace

Slab

Caster

Hot

stripmill

Hot-rolledcoil

REQUIREDINPUTS

1

2

3

4

5

TOTAL

Ironore,metricton1

1.2

1.2

Scrapsteel,

metricton2

0.4

0.4

Electricity,kWh

80

500

30

10

100

720

Naturalgas,kWhequivalent(GJ)3

2,240

(8.0GJ)

280

(1.0)

56

(0.2)

140

(0.5)

420

(1.5)

3,100

(11.2)

Note:Inputsareassumed.

1Informof68%Fedirectreducedpellets.

2Recycledsteel.

3Onegigajoule(GJ)ofnaturalgascontainsabout278kilowatt-hoursofenergy.

Source:GlobalMaterialsInsights;McKinseyMineSpans;McKinseyGlobalInstituteanalysis

McKinsey&Company

—Gascosts:TheUnitedStatesproducesgasdomesticallyandsohaslowgascostssimilartoOman.InEurope,however,thegasdisadvantageispronounced.Sweden’sgaspricespertonwerefourtofivetimeshigherthanOman’sin2024.Thataddedabout$250,or50percent

ofOman’stotallevelizedcost,tothepriceofSweden’ssteel,whileGermany’sgascostspertonweretwotothreetimeshigher,addingabout25percent(Exhibit4).Sweden’shighergaspricesmainlystemfromlimitedgasinfrastructurelownaturalgassupply.China’sandIndia’sgaspricesfallsomewhereinthemiddle,withgascostsroughlydoubleOman's,increasing

theirsteelpricesbyabout10to20percent.

—Electricitycosts:Thecostofelectricityvariesbylocation.Swedenhasverylowelectricitycosts,mostlyrelatedtoitsuseofhydroelectricpower,whichgivesitabouta5percent

costadvantagerelativetoOman.9ElectricitycostsinChina,India,andtheUnitedStates,arebroadlyinlinewithOman’s.Germanyistheoutlier,withelectricitycostsnearly

doubleOman’s,addingamarkupof$80(15percent)toatonofitssteel.ThisdoesnottakeintoaccountsubsidiesforheavyindustryinGermany,whichlowerelectricitycostsforindividualproducers.

EAFsteel:Beyondtheblastfurnace9

Combined,Oman’stotalenergycost(naturalgasandelectricity)ismorethanfourtimes

lowerthanSweden’sandaccountsforabout90percentofthegapbetweenthecountries,or$230ofthetotalenergycostdifferenceof$250pertonofsteel.Suchalargedifferenceis

difficulttooffset.Evenwhencountrieshaveotheradvantages,theycannotcompensatefortheenergycostgap.10

Laborcostsalsocontributetocostdifferencesbuttoasubstantiallylowerdegreethanenergy

becauselaborisamuchsmallerpartoftheoverallcostsinsteelmaking.Salarydifferences

accountformostofthe$20to$30additionalcostofsteelproducedinGermany,Sweden,and

theUnitedStateswheresalariesareroughlytentimeshigherthanelsewhere.ChineseandIndianlaborcostsareconsistentwithOman’sandthereforedonotmeaningfullyaddtotheircostgap.

Materialsforsteelmaking,includingDR-gradepelletsandscrap,aregloballytraded.InGermany,Sweden,andtheUnitedStates,thecostpertonofsteelis$20to$30lowerthaninOman

becausetheirlargersteelstockmeantthatmorescrapisavailable.Oman,India,andChinahaveasmallersteelstock,meaninglessscrapisavailableandsteelproducersrelymoreonimportedpellets.Thismeansthatadvancedeconomieshaveacostadvantageinmaterialsthoughnot

enoughtooffsetthedifferenceinenergyprices.

CarbonpricingaffectstheEU-27,theonlyregionwherematerialCO₂costsapply.Thattranslatestocostpertonabout$10higherthaninotherregions.ThesecostsincreasinglypenalizeBF-BOFproductionandcreatearelativeadvantageforDRI-EAFproduction,asexceptionsunderthe

EUETSarephasedoutandtheEUCarbonBorderAdjustmentMechanismisputintoforce.

TheexactcostpremiumwilldependonthefuturestructureoftheEuropeansteelmarket,theavailabilityandallocationofemissionsallowances,andtheprevailingcarbonprice.Duetotheuncertaintyofthecarbonpricedevelopment,thismodelingusesthe2026carbonpremium.

Otherfactors,includingcapitalexpenditures,constructiontime,andmaintenancecosts,are

largelysimilaracrossthecountriesbecauseDRI-EAFisarelativelynewtechnologyandplants

areexpectedtobebuiltbythesameoriginalequipmentmanufacturerregardlessofthelocation.

EAFsteel:Beyondtheblastfurnace10

Exhibit4

EnergycostsdeterminethecompetitivenessofDRI–EAFsteelproduction.

LevelizedcostofDRI-EAFsteelproduction$/metricton,beforetaxesanddirectsubsidies

Construction

Equipment

Basecase:Oman

70495

LaborMaterialsEnergyMaintenance

30

35

10

305

45

Driversofcost

Sweden

UnitedStatesChinaIndiaGermany

di仟erences,basetocomparisoncountry

495

495

495

495

495

b

Oman

+10

+10

+10

CapitalexpendituresConstruction

EquipmentLabor

+25

+20

+25

+5

–5

Laborcosts

Inputs

–25

+30

–25

–20

+15

Materials

Energy:oxygen

+100

+60

+250

+125

+45

Energy:naturalgas

–20

+80

+15

–5

Energy:electricity

Operationsandmaintenance

+10

+10

CO₂emissionrightsTimetomarket

Interactione仟ect

610

1.2×

560

1.1×

725

750

1.5×

570

1.2×

Countrytotal,$/metricton

1.5×

Note:Figuresmaynotsum,becauseofrounding.

¹Directreducediron–electricarcfurnace(DRI-EAF)producinghot-rolledcoil(HRC).

Source:McKinseyMineSpans;McKinseyGlobalInstituteanalysis

McKinsey&Company

BF-BOFfacilitiesinChinaandIndiaaremorecompetitivethanDRI-EAFfacilitiesintheMiddleEast(Oman)

Thecoststructureofsteelproductionhasadirectimpactonwhichtechnologiesarelikelytobedeployedacrossregions.Wherelow-costgasisavailable,suchasintheMiddleEastandthe

UnitedStates,DRI-EAFplantscanbecompetitive.Whereitisnot,countriesdefaulttoBF-BOFasinChinaand,increasingly,India—unlessforcedorgivenincentivestodecarbonize,asin

Europe.ComparingthefullrangeoftechnologiesforGermany,themostexpensivetechnology,hydrogen-poweredDRI-EAF,istwiceasexpensiveasthecheapestone,BF-BOF(Exhibit5).

Exhibit5

EAFsteel:Beyondtheblastfurnace11

DRI-EAFsteelproductionisabout50percentmoreexpensiveinGermanythantraditionalBF-BOFproduction.

LevelizedcostofsteelinGermanyamongdi仟erentproductionpathways$/metrictonoffiatsteel,

beforetaxesanddirectsubsidies

Blastfurnace–basicoxygenfurnace

Scrapelectricarcfurnace

Natural-gas-poweredhotbriquettediron–electricarcfurnace

Natural-gas-powereddirectreducediron–electricarcfurnace

Blastfurnace–basicoxygenfurnacewithcarboncaptureandstorage

Hydrogen-poweredhotbriquettediron–electricarcfurnace

H₂DRI-EAF

505

600

680

725Benchmarkedtechnology

750

780

1,035

Notcommerciallyviableorwidely

built

02004006008001000

¹Higher-qualityscrappriceandothernecessaryDRIinputstocreatefiatsteelarelikelynotpricedinandwouldincreaselevelizedcosts.

Source:McKinseyMineSpans;McKinseyGlobalInstituteanalysis

McKinsey&Company

Omanisnolongerthelowest-costbenchmarkwhenBF-BOFisincluded(Exhibit6).InIndia,

BF-BOFproductiondropslevelizedcostbyabout35percent,from$570tonto$380perton.Thus,IndiansteelproducedinaBF-BOFplantcosts$120lesspertonthansteelproduced

inOmanwithDRI-EAF.Similarly,BF-BOFsteelproductioninChinareduceslevelizedcost

byabout20percent,fromabout$610pertonto$480perton,makingChina’ssteelabout

$15cheaperpertonthanOman’s.IndiaandChinathusarethemostcostcompetitiveinsteelinourbenchmark.

InSweden,effortsareunderwaytouselow-costhydropowerforhydrogen-poweredDRIEAF,suchasintheStegrafacilitycurrentlyunderconstructioninBoden.SwitchingfromDRI-EAF

productionpoweredbynaturalgastohydrogen-poweredDRI-EAFproductioncoulddrop

Sweden’slevelizedcostfrom$750to$665perton.11Evenso,steelproducedinSweden’s

hydrogen-poweredDRI-EAFplantscosts$170morepertonthansteelproducedinOmanand$285morepertonthansteeloutofIndia’sBF-BOFplants.

EAFsteel:Beyondtheblastfurnace12

Forinvestors,thesedifferenttechnologypathsimplythreeinvestmentpaths.First,investmentdrivenbycostremainscenteredonBF-BOFinIndiaandChina.Producerstherecandeliverthelowest-coststeel,whichcomeswiththehighestCO2emissions.Second,transition-positionedinvestmentfavorsDRI-EAFintheMiddleEastandtheUnitedStates,wheregaseconomics

workwithoutsubsidies.Third,policy-dependentinvestmentcentersonDRI-EAForhydrogen-poweredDRI-EAFinEurope,viableonlyascarbonpricesriseandfreeallowancesarephasedout,orasequivalentsubsidy,green-premiumsupport,orbotharesecured.Eacharchetype

impliesdifferentreturnexpectations,riskprofiles,andsustainabilityandpolicyexposure.

Exhibit6

Methodsofproducinghot-rolledcoilsteelaremostcompetitiveinChinaandIndia.

Levelizedcosttoproducehot-rolledcoilacrossdi仟erenttechnologies,$/metricton,beforetaxesanddirectsubsidies

OtheroperatingexpendituresEnergyCapitalexpendituresLabor

DRI–EAFbasecase

India

2743264380

China

3604161480

Oman

3487066495

UnitedStates

3231307533560

Sweden

3312217537665

Germany

3362797535725

H₂DRI–EAF

DRI–EAF

DRI–EAF

DRI–EAF

BF–BOF

BF–BOF

Note:Thechart