• German company to buy non-prime steel from Stegra from 2027
• Thyssenkrupp plans to support Stegra's production ramp-up
• Stegra's vital funding discussion expected to continue in Q1

STOCKHOLM, Jan 12 (Reuters) - Swedish steel startup Stegra said on Monday it has secured Thyssenkrupp Materials Processing Europe as its first customer for non-prime steel from a hydrogen-based plant in northern Sweden which is due to start operations next year.

Stegra revealed in October that it was seeking an additional $1.1 billion in financing to complete construction of the plant, but has yet to announce an agreement on the funding.

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A company spokesperson said on Monday that Stegra expected to conclude its financing discussions in the first quarter.

Under the deal signed with Thyssenkrupp Materials Processing Europe, part of German conglomerate Thyssenkrupp (TKAG.DE) , opens new tab, 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 that certain applications may require, 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.

The plant had been due to open this year but has been delayed until 2027.

Stegra, formerly known as H2 Green Steel, 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. However, those efforts have faced setbacks, including the collapse of battery maker Northvolt and financing challenges at Stegra itself.

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.

"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."

https://www.reuters.com/sustainability/climate-energy/swedish-steel-startup-stegra-signs-deal-supply-thyssenkrupp-materials-2026-01-12/