Hot Iron (View Slide Deck)

A market-design platform for auctioning green-steel production capacity and converting low volatility into cheaper financing.

Hot Iron is a quantitative and systems project exploring how auction design, ESG-linked lending, and volatility-based financing models can lower the real cost of green steel. The core idea: green steel is structurally lower-volatility than conventional HRC, and that stability can be monetized through cheaper debt. Hot Iron prototypes the architecture, math, and mechanisms required to deliver that value to buyers, suppliers, and lenders.

1. Problem

Steel buyers want predictable pricing. Steel suppliers need liquidity. Lenders want low-risk, ESG-positive deals.

Today's green-steel market has:

• High capital intensity (for example, 1.5M USD per MW electrolyzer CAPEX)

• Opaque pricing and thin liquidity

• Weak alignment between buyers, mills, and project finance lenders

• No infrastructure for forward capacity commitments or standardized commercial terms

As a result, buyers pay a premium, suppliers face financing gaps, and lenders cannot reliably underwrite long-term contracts.

2. Hot Iron's Approach

Hot Iron introduces a platform for auctioning production capacity by bundling two components:

• Time on the manufacturing line

  • Buyers bid for deliverable slots that match what suppliers know they can produce.

• A standardized term-sheet package

  • Incoterms, payment schedules, insurance, and delivery specs are pre-packaged so auctions clear without lengthy bilateral negotiation.

This structure mirrors the equipment-financing model used in other industrial markets and applies it to steel.

3. Financing Model

Green steel exhibits significantly lower spot and futures volatility compared to traditional steel. Lower volatility reduces perceived credit risk, which reduces the cost of debt.

We convert this into explicit savings for buyers.