WOKING, UK - Industrial gases giant Linde (NASDAQ:NYSE:LIN) has announced a significant partnership with H2 Green Steel to supply essential gases for the world’s first large-scale green steel production facility.
Linde will construct an on-site air separation unit (ASU) in Boden, northern Sweden, with an investment of about $150 million. The ASU will provide oxygen, nitrogen, and argon, supporting steel manufacturing that aims to cut carbon emissions by up to 95% from traditional methods.
The collaboration is set to bolster both companies' commitments to industrial decarbonization. The ASU is slated to begin operations by 2026 and will also serve Linde's existing and potential customers in the region's local merchant market.
Maria Persson Gulda, H2 Green Steel's Chief Technology Officer, emphasized the importance of air separation in the steelmaking process and highlighted Linde's technological and operational expertise as key reasons for their selection as a partner.
Armando Botello, President Regions UK & Ireland and Europe North at Linde, expressed pride in supporting H2 Green Steel's innovative project. He also noted the strategic value of enhancing Linde's network density in a growing industrial area.
In addition to supplying gases, Linde Engineering has secured an engineering and procurement contract for a HIPURE™ pressure swing adsorption unit at the Boden plant. This technology will recover and purify hydrogen from the direct reduction iron furnace, aiming to reduce hydrogen losses and increase the efficiency of steel production.
Linde, with 2023 sales of $33 billion, is recognized for its contributions to various industries, including its role in the energy transition through the production of clean hydrogen and carbon capture systems. The company's solutions extend across multiple markets such as healthcare, electronics, and food & beverage.
This strategic initiative, based on a press release statement, marks a step forward in the industrial sector's shift towards sustainability and efficiency.
InvestingPro Insights
Linde (NASDAQ:LIN) continues to demonstrate its commitment to sustainable practices and innovation in the industrial sector. As the company forges a significant partnership with H2 Green Steel, it's important for investors to understand the financial health and market performance of Linde to assess the potential impact of such collaborations on its long-term value.
With a robust P/E Ratio of 34.01, Linde trades at a premium relative to its earnings, which may reflect the market's confidence in its future growth. This is further supported by a low PEG Ratio of 0.55, suggesting that the company's earnings growth could be undervalued compared to its P/E ratio.
Moreover, Linde's commitment to shareholder returns is evident as it has maintained dividend payments for 33 consecutive years, with a recent growth of 8.97% in its dividend. This consistent performance aligns with the company's strategic initiatives, including the recent partnership aimed at revolutionizing the steel industry with green production methods.
Investors seeking to delve deeper into Linde's market dynamics can explore additional InvestingPro Tips that highlight the company's strengths and potential areas of concern. For instance, Linde's management has been actively engaging in share buybacks, showcasing confidence in the company's value.
Moreover, while the stock exhibits low price volatility, it is currently trading at a high Price / Book multiple of 5.34, which may influence investment decisions. With an extensive list of 15 additional tips available on InvestingPro, investors can gain a comprehensive understanding of Linde's market position and future prospects.
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