ArcelorMittal strikes alliance with auto stampings firm

May 18, 2023

The ArcelorMittal Europe - Flat Products business unit of Luxembourg-based steel producer ArcelorMittal has signed an agreement with Germany-based Gestamp Metal Forming GmbH involving the handling of Gestamp’s ferrous scrap.

ArcelorMittal says the understanding involves jointly designing and implementing a circularity scheme that will enhance the recycling of steel between the two companies. A key part of the agreement involves the collecting and handling of stamping scrap generated by Tier 1 automotive supplier Gestamp and its eventual use as feedstock in ArcelorMittal XCarb recycled-content steel.

Framing it a “circularity agreement,” ArcelorMittal says it is aimed at strengthening environmental sustainability throughout the industrial supply chain.

“The agreement involves jointly designing and implementing a circularity scheme that will enhance the recycling of steel between Gestamp and ArcelorMittal and ultimately, offer benefits obtained to their automotive customers," ArcelorMittal says.

In March 2022, ArcelorMittal's Flat Products business unit delivered its first shipments of XCarb recycled and renewably produced steel, which is made via the electric arc furnace (EAF) route using a minimum of 75 percent scrap steel. “This results in a CO2 footprint close to 70 percent lower than the same product made without XCarb,” the firm says.

Last July, ArcelorMittal and Gestamp trialed the use of low carbon emissions steel and high scrap content for use in car parts that ultimately will be used in vehicle production in Spain and other nations in Europe.

While it is based in Germany, Gestamp operates dozens of production facilities in Europe, Asia and the Americas. The ArcelorMittal news release announcing the agreement does not detail how widespread the agreement is geographically.

“The return of high-quality preconsumer scrap, with traceability of its origin, quality and processing, for the production of low emission steel products allows Gestamp to secure the circular supply chain to our customers with a secondary raw material,” says Ernesto Barceló of Gestamp.

While the two companies say the agreement involves “enhancing the reliability of the scrap supply chain,” the stamping scrap being generated by Gestamp has almost certainly been collected for recycling for decades.

“We are delighted to have signed this agreement with Gestamp that strengthens the work we are doing together on environmental sustainability in the automotive sector," says Paul Brettnacher of Arcelor Mittal Europe - Flat Products. "This step is a new milestone for ArcelorMittal in our work to offer our automotive customers a broad range of low-carbon emissions steel grades.”

The agreement, however, can be seen as an important supply move for ArcelorMittal, which also has acquired scrap processing firms in the Netherlands, Poland and the United Kingdom already this decade.

Scrap supply is poised to become increasingly important to ArcelorMittal as it raises its EAF capacity in Europe thanks to projects in Belgium, France and Luxembourg.