All that is solid melts into steel or the steel bar as a social relation       

Synopsis: The developers of the Hub26 office complex in the west of Thessaloniki is advertising the high standards and low environmental footprint of the new construction based on green steel and green concrete. I focus on the actors involved in the making of the new urban built environment deconstruct the discourse around the green construction sites and explore the social relations of exploitation and domination underpinning and reproduced through the construction of this space. From the construction sites on the west Thessaloniki, I follow the chain of steel production, from the marginalized communities of scrap collectors to the furnaces where the remnants of dismantled space, debt and crisis melt before becoming the low-carbon steel that supports the city’s new construction sites. My aim is to «spatialize the conjuncture» of domination that these construction sites encapsulate.

1. Introduction
   

Hub26 is a project for the construction of a five-building complex at the West Entrance of Thessaloniki. The complex of buildings with a total area of 31,000 sq.m. was to consist of four separate buildings but recently the developer decided to add a fifth, which has already been agreed to be sold to the Black Sea Trade and Development Bank, with funding from the Greek state.  The development of the project was undertaken by the joint venture of DIMAND with Premia properties – one of the major Greek Real Estate Investment Companies (REICs) – the European Bank for Reconstruction and Development (EBRD) and Alpha Bank Real Estate. The construction of the project was entrusted to the largest private construction company, TEPNA.

Just across the street, a similar consortium acquired the twenty-three acres plot of land of the FIX industrial complex. FILMA (a subsidiary of DIMAND and PRODEA – another REIC) hold 75% of the investment, while ELVIAL SA – an aluminum producing company – has the remainder (25%). The aim is to build a modern office space, luxury residences, a hotel, commercial and cultural spaces and renovate three listed buildings, financed by the Greek state. The construction is contracted to TERNA.

A developer arranges the financing of the project, while remaining the owner during construction. It can sell it when completed or retain ownership, but regardless of its final plans, the first thing a developer does is secure financing for land purchase and construction. All projects developed by DIMAND are advertised as bioclimatic, certified with the LEED certification. LEED (Leadership in Energy and Environmental Design) is a widely used green building rating and certification system that provides a framework for «efficient and economic green buildings that provide environmental, social and administrative benefits.»

The importance of this certification is crucial for the development of DIMAND’s projects, for two reasons. First, because it entails preferential bond credit compared to conventional construction and secondly because it makes it certain that the properties developed can be purchased or leased to companies interested in being accommodated in buildings certified as bioclimatic to enhance their ESG (Environmental, Social, Governance) performance (Kim & Li, 2021). And in the Greek metropoles, office spaces that meet these standards are non-existent. A requirement for being granted the LEED certification is the use of “low carbon” materials in construction, especially the use of low carbon steel and concrete.

The story I have recorded is a story about how the production of space and the lives of those who produce it change as the accumulation regime moves from profits to rents. It is a story about wealth, value, urban land, raw materials, labor and the regimes of control and domination needed to mobilize all the above to produce urban space.

I draw from the work of Mike Davis (1990) and from the literature of urban political ecology that investigates the production of space as a historically contested field, largely driven by the dynamics of capital and its encounter with a series of structural inequalities related to class, gender, race (Gandy, 2024).

In this presentation I explore the value chain of «green steel» that ends up at the Hub26 construction site. I draw on field-based work in the construction sites on the western outskirts of Thessaloniki, during which I followed the steel production chain from scrap collectors to scrap traders to the industrial furnaces.

I examine how social groups undergoing an organized abandonment (Gilmore, 2007) exist not against the new spaces of wealth, but as their precondition, not as obstacles to the aspirations of the new economic actors producing urban space, but as a precondition for their profitability. I show how the criminalization of the poor, the Roma, refugees, who are pushed into the casual labor of material collection, ensures the cheap labor and cheap raw material that the steel industry needs to produce the green steel that ensures real estate developers LEED certifications, cheap credit, and guaranteed buyers of the properties it develops.

I am exploring the steel bar as a social relationship of exploitation, domination and multiple hierarchies entangled with systems of social control (Bookchin, 1982).

2. All that is solid melts into air
   

The Greek steel industry suffered a serious blow during the crisis. Divided between three families (Stasinopoulos, Angelopoulos, and Manesis) – remember their names – before the crisis it had the capacity to annual produce four million tons of steel. At its peak, the industry employed 2,500 workers. When construction stopped and public works froze, demand fell from 2.5 million tons in 2007 to less than 300,000 in 2016. The problem created by low domestic demand was exacerbated by high energy costs that prevented steel mills from being competitive in the international market. Established markets – such as Algeria – importing Greek steel were lost and exports fell from 980,000 tons in 2011 to less than 400,000 in 2014.

In 2011, Manesis’ Greek Steel Company shut down its largest plant in Aspropyrgos (Athens) and took out a €235 million debt to maintain production at its smaller plant in Volos. Angelopoulos’ steelworks, already exposed to debts of more than EUR 400 million, requested capital support to continue operating its Aspropyrgos plant. With these loans, they hoped to be able to survive long enough for the Greek government to legislate a law to allow the Greek Energy Provider (ΑΔΜΗΕ) to sign special contracts under which it would give them discounts of up to 25%. The TROIKA (the International Monetary Fund, the European Central Bank, the European Commission) rejected the Ministry of Environment’s draft law, considering that the discounts amounted to state aid.

Stasinopoulos’ SIDENOR partially suspended operations at its two plants in Volos and Thessaloniki, broke up union resistance with block outs and initiated a merger with its parent company VIOHALCO, moving its headquarters to Brussels, where instead of the 7% interest rate on new loans imposed by Greek banks, it could secure a 2% interest rate for a three-year €300 million debt-based investment project. SIDENOR had two comparative advantages over other steel companies: the diversification of VIOHALCO’s business model and the expansion of the company into the Balkan hinterland. In addition to SIDENOR in Thessaloniki and SOVEL in Volos, VIOHALCO controlled STOMANA Industry S.A. in Pernik (Bulgaria), the Dojran Steel Dooel rolling mill in Nikolic (Republic of North Macedonia) etc. It was also able to supply steel to VIOHALCO’s companies producing steel pipes and cables.

In 2014, with only three steel mills left in operation, the four Greek systemic banks commissioned the consulting firm Alvarez & Marsal to conduct a study and make proposals for the restructuring of the industry. Alvarez & Marsal was entrusted with identifying the plants that produced a quality product at the lowest possible cost and those that had to be seized and resold.

SIDENOR’s transfer to Brussels and its enhanced position took it off the lists of candidates for the slaughter. The first to be sacrificed was Angelopoulos’ Halivourgiki. At the end of 2018, ΑΔΜΗΕ (24% of which had already been transferred to China State Grid International Development) cut the power due to the industry’s failure to reach a settlement on debts of €31.4 million. Manesis’ Greek Steelworks was crippled. Eurobank, considering that any debt restructuring would be moribund, decided to sell EUR 53 million of debt to the private investment company HIG Capital at 15% of its value (EUR 8 million). The US fund HIG reached an agreement with the other banks to settle the remaining debts and acquired the factory and the land it was standing, which is now being redeveloped to serve as a logistics centre. Manesis lost its flagship, but retained the Volos plant, which is operating at a loss.

 SIDENOR managed to survive and gain a huge share of the steel industry as the construction sector is on an upward trajectory. In autumn 2020 it acquired Bitros Metallurgical under its subsidiary SIDMA Metallurgical, strengthening its presence in the markets of Greece, Bulgaria and Romania for the processing, trading, and export of steel products.

On the barbed wire fence surrounding the Hub26 construction site hang the billboards of the major vendors selected for the project. SIDENOR’s billboards adorn the fences at all the new construction sites, extended from the commercial Hub26 in the west, to the luxury apartments and hotels downtown, to the new city build in the east suburbs. The key element of its advertising campaign is its low carbon footprint steel.

This low carbon steel is produced in electric arc furnaces. Two things go into an electric arc furnace: the scrap and the electrodes that melt it with a current to create the bars that are transported to the rolling mills to produce steel products. Making steel from scrap rather than primary iron ore means making it not from mining but from a dismantled site. The biggest cost of the steel industry is energy and debt servicing costs. The companies that control the production and distribution of electricity are siphoning off a large part of the profits of the industrialists. Thus, maintaining the profitability of the scrap steel industry relies on reducing two other cost factors: labor and raw material. If in the past the raw material was secured by scrap purchases from abroad, after the crisis most of it comes from the dismantled space of Greek urban centers (80%). From the carcasses left by the debt of the crisis and from the labor power provided by the sections of the population that have been left with no other choice but to collect the leftovers of dissolving space.

3. The production of steel  

According to Mumford (1970) cities are always assembled from something disassembled elsewhere. This dismantling can be seen effortlessly every day. Dozens of people carry their heavy trailers through the city streets, looking for leftover metal.

The surface of the trailers is divided with large cardboard boxes for the collectors to be able to sort their harvest quickly, on the spot: one cardboard box reserved for steel products, one for copper, one for aluminum, one for potentially high-value items. After so much exposure to the hardships of this casual labor, collectors are trained to quickly calculate the weight of their harvest, to translate the weight into money to assess early on whether the harvest will be enough to meet their daily needs, in food and rent.

The traders’ trust has put a ceiling on prices. At best, iron gets 17 cents per kilo, aluminum 1 euro, bronze 3 and copper can go as high as 5. This is the highest price it can reach. But how low the price can go depends on three fundamental factors:

((i) the immediacy of the collectors’ need: if the collector has an immediate need – e.g., to eat – and if the immediacy of the need is perceived by the trader, the collector can be induced to sell a day’s harvest in kind (the object of his need, that is food). Or if the collector needs to get rid of an item of questionable origin, the room for price negotiation is minimal, as the trader’s refusal increases the chances of the collector being caught.

(ii) kinship relations: whether the nationality of the collector is related to that of the trader determines whether their bond is stronger than a mere transaction and is regulated by custom prohibiting extreme exploitation.

(iii) by the size of the surplus population: if the streets are replete with numerous collectors, they are easily replaced, but if they are not, their disappearance costs the trader an indispensable worker.

The collectors in the wider Thessaloniki metro area that collect the scrap that feeds SIDENOR electric arc furnace comes from four different groups:

– The Roma living in the informal settlements of Tsairia (350 people), Agia Sofia (4,000 people) and Iliopouli (100 people) in miserable living conditions, with 85% of the population registered as unemployed,
– The Roma from Bulgaria, who often live in makeshift houses in squalid conditions next to scrap yards,
– Refugees who arrived in Greece after 2015, who mostly live in rooms inside rented apartments on the western side of the city or in the permanent temporality of the refugee camps,
– the new poor (Kaika, 2012), Greek citizens who have lost their secure employment and home and live in extreme poverty.

But the categories of collectors can also be distinguished by the trailer they use:
– trailers that are manually operated, which require very high physical strength to move and therefore a high expenditure of physical energy,
– motorized (Piaggio Ape50) which reduce the expenditure of physical energy but require high fuel costs.

Scrap traders are mainly divided according to their capacity to store scrap. The smaller ones control small plots of land and their mechanical equipment for transporting and sorting scrap is limited. The limited size of their land and their precarious financial situation do not allow them to store large quantities of scrap when prices are low, so that they can wait to sell dear when prices rise.

The larger ones control larger land plots and have large fleets of machinery for sorting and transporting scrap.
Large scrap yards employ between 10 and 40 people, including several refugees. They do not simply rely on collectors, as they are licensed and are therefore called upon to collect scrap from the deconstruction of objects and sites (e.g. demolition of former industrial facilities, ships, trains, wagons, pipelines and electricity cables).
They can store scrap when prices are low and sell it at a premium when prices rise. They choose to whom they will sell, after considering the price of scrap on the stock exchange and can refuse to sell to SIDENOR if the latter sets a purchasing price lower than the one found at the international market.

After sorting is complete at this stage, the scarp is purchased by SIDENOR and stored. Its «handfuls» (loaders) load scrap metal and throw it into the electric furnaces. This is where legal and illegal is blended in a crucible, and identifiable items are transformed by the energy of the electrodes into unidentifiable liquid, then into green «steel» products including iron bars.
But changes in the energy sector have made energy costs the most important cost of the Greek steel industry. With these prices, costs can be saved, and profit maintained if the price of labor power and raw materials is driven further down.

4. The Stigma

The degradation of labor in this case is not based on investment in R&D, mechanization, automation and the gallop of rationalization (Braverman, 2005), but on the reproduction of state violence and organized abandonment of the surplus population. The reproduction of marginalization of a surplus population guarantees the profitability of capital(s). State violence substitutes the control of labor through automation with its control through domination.

As industrialists, merchants and rentiers frantically pursue their profits, they rationalize, mechanize, innovate, and revolutionize work processes to an astonishing degree. The methods they use are as varied as the ingenuity behind the scientific achievements. Capitalist enterprises, fueled by such wealth, save labor through innovations in production. And where this is not possible, they save labor by downgrading their product. Stuart Hall (2013) wrote about crisis policing in Thatcher’s Britain, about the doctrine of law and order activated by the police and the criminal justice system to alleviate the moral panic created by the political and media complex around mugging. The current doctrine of law and order in Greece not only favors a political system invested in the rhetoric of security and punishment, but also ensures the devaluation of casual labor through its criminalization.

 A recent article in the liberal newspaper of Kathimerini in 3 November 2023, entitled «the vulnerable social groups» reads: «I don’t disagree that members of vulnerable social groups do hard and unhealthy jobs. It is not easy to grab copper, railway, or telecommunication cables…The state provided them with housing so that they did not have to live in nomadic camps, yet they continued to live as they did in the camps.»

The text refers to the Roma. At the urging of journalists, at every news story about metal theft, the public points the finger at the Roma and so does the long arm of the law. And the police steps in to respond to the local and national demand for security! On October 22, 2021, during a car chase, 18-year-old Roma, Nikos Sambanis, was shot in Perama (Athens) for not responding to a police signal to stop. On 5 December 2022, 16-year-old Kostas Fragoulis, from the Diavata (Thessaloniki), was shot dead for leaving without paying 20 euros for petrol. In November 2023, another 17-year-old Roma from Aliarto (Boeotia) was shot for ignoring a police signal.

The racism of the article, and all similar texts, is that it homogenizes and presents all members of a social group as fundamentally similar with enduring qualities to justify their different treatment. But there are also things that the journalist singing the article fails to inform us about. He does not inform us of the fact that there is no generalization of the phenomenon of theft, but more media references to it. He does not tell us that thefts related to the Roma are a tiny fraction of the total number of thefts. And it doesn’t tell us the most important thing: the cheap price of scrap is a prerequisite for the continued profitability of the steel industry: that scrap ends up in the electric furnaces of the industrialists who are profiteering from the production of the new spaces made for the well off.

5. Conclusion

The abandoned Roma neighborhoods, the broken neighborhoods in the western districts do not exist against the new spaces of wealth, but as a precondition for them. The construction sites in our cities to become hotels, luxury houses, logistic centers, are dressed up with signs advertising «green» low carbon construction materials. «Low-carbon steel,» however stabilizing it may seem, is the product of a generalized instability, of mass precarity, of the dissolution of previous defaulted space sunk in debt, now melting in furnaces to provide raw materials for building a new inhospitable urban space. This is the chain of production of «green steel» that secures that DIMAND will receive its LEED certification, and ensuing access to cheap credit and secured tenants or buyers for its buildings.

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