EU needs decarbonisation ‘reality check’ to support industry
Europe is historically the world’s most experienced trader, with the EU currently having free trade agreements with over 70 countries, the euro being the second reserve currency, and the rule of law assured to provide predictability for investments. It also has 450 million consumers to tap, Kerstin Jorna, European Commission director-general for internal market, industry, entrepreneurship and SMEs, said at the event attended by Kallanish.
However, there is much room for improvement.
The EU must stay competitive with China and the US, which means reducing the cost of doing business. Energy prices need to be reduced, but the substantial amount of EU regulation also needs to be simplified and better coordinated for industry to thrive in the bloc, observed European Automobile Manufacturers’ Association (ACEA) director general Sigrid de Vries.
Besides mandates, the bloc needs a market to ensure industrial success. However, for automotive, the market for electrification is not growing fast enough to reach targets. Enabling conditions are still missing – charging infrastructure and the electricity to supply it, she added.
Katja Scharpwinkel, member of the board of executive directors at chemicals giant BASF, meanwhile, said the process of decarbonisation is well underway. However, it is “costing a lot of money and not many customers are willing to pay for it.” She added: “The market is not yet there” for decarbonised products.
Dariusz Marzec, president of Polish public power company PGE Polska Grupa Energetyczna, pointed out energy prices are driven by regulatory costs, which are high especially in Poland, rather than production costs. He called it a “strange” situation that his firm cannot secure financing for natural gas-based energy production investment, despite this emitting 70% less CO2 than lignite-based power generation. This “creates a difficult climate to talk about cheaper energy prices”, he added.
A critical component for the EU investment case is cost of produciton, he continued. Companies will think, “okay, fine, the EU has some good points, but the US has the cheapest energy, so let’s go invest there. That will happen. That is happening,” he noted. Deindustrialisation is underway in the EU, with industry either moving capacity out of the EU or refusing to invest in new capacity because of production cost.
Jorna qualified her earlier EU sales pitch. “Is the best the enemy of good? Do we need to jump straight to the perfect solution? Or do we need to cater for taking it step by step improving along the way?” she asked. Analysing the business case is a crucial new approach in the current Commission mandate.
In terms of the business case, “there’s so much more we can do; it’s fragmented and not connected between countries. This makes it very unpredictable for investments,” she noted. Members states therefore need to align more.
This step by step approach to challenges is crucial, said Marzec. The world has changed and shown that “only real power counts” – military and economic. The EU wants to spend $1.5 trillion on decarbonising, but these funds could be better placed to serve European security and industrial capability, he added. “The world around us has changed dramatically but we have not changed our strategy,” he noted.
Taking a step back on decarbonisation policy means “taking a reality check”, said de Vries. In terms of China, the automotive sector “can vouch for what it means when China takes something seriously”, she noted. The EU needs to answer the question of whether it plans to produce vehicles in future, in the face of this competition.
The bloc can learn from China, which takes a holistic approach to economic growth, with all sectors and goals aligned, de Vries continued. “Regulation does not equal strategy. Strategy is holistic and synchronised,” she added. Having the vision to ensure simplification of regulation and improve competitiveness is good, but the measures need to be actually implemented, she concluded.
Italian coil market deadlock persists
The Italian coil market continues to see a lack of activity this week, as buyers are taking a cautious stance. The trend is expected to persist into next week, Kallanish hears.
Hot rolled coil prices are reporting a downtrend in Europe, alongside a further decline in import offers, making Italian buyers hesitant to make purchases. A prominent coil processor anticipates prices will hit their lowest point next week, while another company projects a continued decline over the next two weeks.
A third steel processor reports a decline in downstream demand. Customers of service centres are similarly in a waiting mode as they see prices declining; therefore, there is almost no apparent demand.
Rerollers and service centres are maintaining adequate stock levels. Their purchasing activity is expected to remain on hold until at least the final week of June. The outlook appears unfavourable as a result of subdued consumption in downstream markets.
Several sources indicate coil prices in Europe are expected to rebound starting in October, due to the implementation of the Carbon Border Adjustment Mechanism (CBAM) effective from 1 January 2026. Many customers say that starting in September and October, they will no longer purchase material from Asia and will only be able to rely on Mediterranean suppliers who can provide prompt delivery before year-end.
A steelmaking source estimates the CBAM tax will stabilise at approximately €100/tonne ($114), whereas a service centre anticipates it will be closer to €60/t.
Italy is seeing various low-cost HRC import offers from Turkey, North Africa, and the Far East. Current offers originating from Turkey are noted to be in the range of €530-540/t cfr including duties. A major buyer is confident these suppliers might be open to negotiations and reduce their proposals this week.
Offers from India and North Africa are resurfacing in the range of €530-540/t cfr, while offers from Indonesia and Malaysia are positioned at €475-480/t cfr.
Two traders state there is a lack of buyer interest as expectations lean towards lower rates in the week to come, resulting in no immediate demand for coil. Producers in the EU are also beginning to decrease their prices to the level of €600/t delivered, while officially asking for €610-640/t delivered, sources suggest.
Natalia Capra France
Rebar prices in Europe largely flat; improved demand observed in some countries
Fastmarkets’ price assessment for steel reinforcing bar (rebar), domestic, delivered Northern Europe, was €630-670 ($718-764) per tonne on Wednesday, widening downward from €635-670 per tonne on May 28.
The highest prices of around €670 per tonne delivered were seen in Netherlands, with a pick-up in buying activity reported. In Austria, prices were in a range of €630-640 per tonne delivered, while levels of up to €645 per tonne delivered were heard in Germany, according to sources.
Offers from most suppliers in Italy were within the range of €550-580 per tonne ex-works, with one supplier reporting €530-550 ex-works being available.
Sources told Fastmarkets that the lower prices were largely due to mills possibly using import billet from Iran, which is traditionally priced lower compared with other suppliers in the market, which gives it a cost advantage over other producers using billet from alternative sources or scarp.
Transactions were reported being concluded within €550-580 per tonne in the week to Wednesday, according to sources on the buy side.
Fastmarkets’ assessment for steel reinforcing bar (rebar), domestic, exw Italy, was €550-580 per tonne on Wednesday, narrowing from €540-585 per tonne in the previous week. But the average was only slightly changed to €562.5 per tonne, from €565 per tonne a week ago.
In Spain, tradeable rebar prices corrected slightly to €600 per tonne delivered on June 4, down from €605 per tonne delivered in the previous week.
There had been some improvement in demand, arising from consumption by the construction sector, which is typical for the summer months, sources said, adding that market participants were still cautiously optimistic.
Fastmarkets’ weekly price assessment for steel reinforcing bar (rebar), domestic, delivered Spain, was €600 per tonne on Wednesday, down by €5 per tonne from €605 per tonne on May 28.
Eurofer downgrades steel consumption outlook for Europe
At the beginning of the year, Eurofer predicted a recovery of apparent steel consumption in the EU27 by 2.2%, rising to 130 million tonnes in 2025.
There was a short-lived rebound of apparent demand in February-April 2025, related to restocking activity and expectations of tougher steel safeguards measures, and consequently lower import availability. But since May activity in the European flat steel market has been deteriorating, with prices under pressure.
For example, in April, Fastmarkets’ steel hot-rolled coil index, domestic, exw Northern Europe, averaged €652.74 ($746.03) per tonne.
Since then, the average monthly price of HRC has been decreasing step by step and, on June 4, the daily index was calculated at €612.50 per tonne – the lowest since February 20, 2025.
Short-term expectations remained quite bearish amid a lack of real demand and mounting import pressure, trade sources told Fastmarkets.
“Before this year’s end, we will see more price drops. Demand is just not there, the US imposes 50% [import] tariffs on steel, CBAM [the EU’s Carbon Border Adjustment Mechanism] is approaching – [there’s] no light at the end of the tunnel,” a buyer in Germany said.
Real steel consumption in the EU shrank by 3.8% in 2024 to around 132.7 million tonnes, from around 138 million tonnes in 2023. For 2025, Eurofer expected another 3.3% decline.
According to the association, apparent steel consumption in the EU in 2026 will increase by only 3.4% to 132 million tonnes, still below the pre-pandemic volume of 145 million tonnes in 2019. This figure was also revised downward from 133 million tonnes expected in February 2025.
“The overall evolution of steel demand remains subject to very high uncertainty,” Eurofer’s report said. “No improvement in apparent steel consumption is expected before the fourth quarter of 2025, and consumption volumes are expected to remain far below pre-pandemic levels.”
End-user outlook
Automotive
Against earlier expectations of a modest recovery in 2025 (+2.1% in the previous outlook published in February), output in the automotive sector was now set to suffer from increasing global uncertainty and very low confidence, resulting in another annual drop (-2.6%), before a projected recovery in 2026 (+1.9%) – although absolute output volumes will remain far below 2019 levels, Eurofer said.
“Demand is projected to remain weak until the macroeconomic picture and consumer disposable income substantially improve, given the rather unpredictable economic outlook and uncertain economic growth perspectives,” the Eurofer report said.
The association pointed out that full recovery in global trade and external demand from major markets, notably the US and China, seemed unlikely, given escalating global trade tensions, especially in light of recently announced US tariffs.
Major challenges were expected to persist, notably concerning Chinese electric vehicle (EV) export volumes to EU markets but also as regards the US, where the Inflation Reduction Act (IRA) was expected to further stimulate domestic EV production.
The automotive industry was faced with 25% tariffs, announced by the US on all imported vehicles in March. On top of that, on June 4, the US doubled its tariffs on steel and aluminium to 50%, as part of President Donald Trump’s broader trade policy.
“Due to US tariffs – both announced and implemented – economic uncertainty is likely to intensify, weighing on growth in the coming quarters,” Euorfer’s report said.
The automotive sector accounts for around 20% of total steel consumption in the EU, according to Eurofer.
The US is the second-largest market for EU vehicle exports after the UK. In terms of value, the US accounts for about one-fifth of the EU export market, according to European Automobile Manufacturers Association (ACEA). In 2024, a total of 757,654 new vehicles were exported from the EU to the US, worth €38.9 billion ($44.5 billion).
ACEA highlighted that European manufacturers export 50-60% of the vehicles they make to the US.
Meanwhile, total carbon steel exports from the EU in 2024 amounted to 15.8 million tonnes, with the US share being around 16%, 2.5 million tonnes.
Construction
Output in construction, the largest steel-using sector, representing 35% of total consumption, fell by 2% in 2024.
In fact, construction output in the EU has been under pressure since the third quarter of 2022. This was due to several factors, including rising construction material prices, labor shortages in some EU countries, and increasing economic uncertainty, Eurofer said.
“Construction confidence has been declining since March 2022 and has remained in negative territory ever since, as confirmed by the latest available data [April 2025],” Eurofer said.
The sector was expected to grow only modestly, by 1.1% in 2025, due to persistently weak housing demand. In 2026, construction output in the EU was expected to recover by 0.8% year on year, primarily driven by the effects of monetary easing.
Fastmarkets’ price assessment for steel reinforcing bar (rebar), domestic, delivered Northern Europe, averaged €663.00 per tonne at the midpoint in April 2025, up month on month by €18.00 per tonne from €645.00 per tonne in March.
European steel HDG, CRC prices drop on weaker demand
Suppliers were heard offering hot-dipped galvanized coil at €720-730 ($822-834) per tonne ex-works during the assessment period, compared to €730 per tonne ex-works the previous week.
Deals were also heard at €720 per tonne ex-works this week.
As a result, Fastmarkets’ weekly price assessment for steel hot-dipped galvanized coil, domestic, exw Northern Europe, was €720-730 per tonne on Wednesday, falling from €730-740 per tonne in the previous week.
Market sources pointed to “weak demand” as a main contributor to the downward price trend, with mills “increasingly willing to lower prices” in order to sell their products.
On the other hand, import prices for hot-dipped galvanized coil remained stable this week.
Fastmarkets’ weekly price assessment for steel hot-dipped galvanized coil, import, cfr main port Northern Europe, was €700-740 per tonne on Wednesday, unchanged since April 23.
Meanwhile, the market for domestic cold-rolled coil also showed downward changes during the assessment period.
Sources estimated the workable market for domestic CRC in Northern Europe at €700-720 per tonne ex-works.
Fastmarkets’ weekly price assessment for steel cold-rolled coil, domestic, exw Northern Europe, was €700-720 per tonne on Wednesday, falling from €720-730 per tonne the previous week.
Concurrently, import prices for cold-rolled coil to Northern Europe also dropped in the week to Wednesday. This week, reported offers from Asia hovered around €650-655 per tonne CFR, compared to €660-680 per tonne CFR in mid-May.
Fastmarkets’ weekly price assessment for steel cold-rolled coil, import, cfr main port Northern Europe, was €650-660 per tonne on Wednesday, falling from €660-675 per tonne the previous week.
A buyer source cited “bearish sentiment” in the European market for imported coils, which they said could lead to less activity within the market.
“Buyers have become more cautious when booking imported coil, due to ongoing uncertainties around trade measures and the upcoming implementation of the CBAM (Carbon Border Adjustment Mechanism) regulations,” the source said.
“As a result, the European market is expected to face reduced import exposure in the second half of the year,” the source added.
Southern Europe
Domestic HDG and CRC prices in Southern Europe also fell in the week to Wednesday, according to market sources.
Sources assessed the market for HDG at €720 per tonne ex-works this week, compared to offers of €730-750 per tonne ex-works heard in mid-May.
As a result, Fastmarkets’ weekly price assessment for steel hot-dipped galvanized coil, domestic, exw Southern Europe, was €720-730 per tonne on Wednesday, falling from €730-750 per tonne the previous week.
CRC prices in Southern Europe also experienced some downward movement. Sources assessed the market at €700 per tonne ex-works this week, compared to €710 per tonne ex-works in mid-May.
Fastmarkets’ weekly price assessment for steel cold-rolled coil, domestic, exw Southern Europe, was €700-710 per tonne on Wednesday, falling from €710-720 per tonne the previous week.
Import prices for both HDG and CRC were unchanged during the week.
Green steel demand sluggish in Europe; buyers focus on broader market pressures
Industry sources said the market for green steel remained very patchy in Europe.
“Trading remains very limited for now. We sell some small tonnages here and there, but the volumes are [minimal], and most of them go to the Nordic States,” a mill source said.
Fastmarkets’ weekly assessment of the green steel, domestic, flat-rolled, differential to HRC index, exw Northern Europe was €170-200 ($194-229) per tonne on Thursday, flat week on week.
Fastmarkets’ methodology defines European green flat steel as “steel produced with Scope 1, 2 & 3 emissions at a maximum of 0.8 tonnes of CO2 per tonne of steel.”
For steel that falls under such specifications, offers from major European suppliers were stable at premiums of €200-300 per tonne. Offers at the higher end of the range were mainly reported from Nordic-based suppliers.
Latest transactions for flat steel produced with emissions below of 0.8 tonne of CO2 per tonne of steel were reported at €170-200 per tonne for June-July shipment material, but mainly for small-size tonnages.
A major buyer told Fastmarkets they have not made any green steel booking for a few months due to poor market fundamentals.
“Unfortunately, we have other problems than green steel now — Trump tariffs, safeguards, shrinking production and consumption,” they told Fastmarkets.
“You only book green steel if you have a customer to sell it to, so it’s a back-to-back business. Nobody is buying [green steel] for stockholding,” another buyer said.
Europe’s economic slowdown — particularly the decline in major steel-consuming sectors like automotive and construction — has also impacted the green steel market, hindering the adoption of low-carbon products.
Notably, European Steel association Eurofer has downgraded its outlook for both apparent and real steel consumption in the EU’s 27 member states for 2025 in the report published on Thursday.
“The overall evolution of steel demand remains subject to very high uncertainty,” Eurofer’s report said. “No improvement in apparent steel consumption is expected before the fourth quarter of 2025, and consumption volumes are expected to remain far below pre-pandemic levels.”
Output in the automotive sector — a key consumer of green steel — is expected to decline by 2.6% this year amid growing global uncertainty and very low confidence, before a projected recovery of 1.9% in 2026, according to Eurofer. However, absolute output volumes will remain well below 2019 levels.
Meanwhile, Fastmarkets’ assessment for the green steel, differential to steel reinforcing bar (rebar), domestic, delivered Northern Europe was €20-30 per tonne on Wednesday June 4, stable week on week.
Fastmarkets’ methodology defines European green long steel as “steel produced with Scope 1, 2 & 3 emissions at a maximum of 0.5 tonne of CO2 per tonne of steel.”
Meanwhile, electric arc furnace (EAF) producers — who use scrap as feed — typically emit around 0.8 tonne of CO2 per tonne of steel.
Buyers’ estimations of achievable price came in at €20-30 per tonne in the assessment week — unchanged over the past seven days.
No fresh trades were reported.
Stéphane Séjourné: EU needs simplification, industry engagement; 2025/26 critical
Simplifying and aligning bureaucracy between member states, as well as increased consultation with industry are needed to ensure EU industry regains competitiveness in a changing world, says European Commissioner for Prosperity and Industrial Strategy Stéphane Séjourné. 2025 and 2026 are key years of action given global economic reorganisation.
Speaking at EU Industry Days 2025 in Rzeszow on Thursday, the commissioner said the EU’s focus is on three pillars – strengthening internal market competitiveness, protecting the external borders of the customs union and driving forward “Made In Europe”.
Simplifying and unifying rules across the EU is crucial to improve the functioning and growth of EU businesses but it is a challenge as these can be different from country to country, Séjourné pointed out.
This process would also support the “Made in Europe” initiative, which aims to enable EU manufacturers to penetrate new global markets with their products. “We need to strengthen some key sectors … to be more competitive on a global level,” Séjourné noted at the event attended by Kallanish.
“We need to protect our commercial border around the EU if we want to have an effective internal market,” he added.
EU industry is at a critical juncture with the emergence of China as a low-cost competitor in global markets for manufactured products amid global geopolitical fragmentation. Climate policies have resulted in high EU production costs, while investment climate and demand in the bloc remain subdued, not helped by the Ukraine war next door, now in its fourth year. The steel safeguard measure meanwhile expires next year.
The European Commission published its Clean Industrial Deal earlier this year, which is being followed by various sector-specific action plans, such as the Steel & Metals Action Plan published in March. These involve an unprecedented level of engagement with industry to establish the nature of required measures, most of which are being implemented in 2025 and 2026.
These years will be critical given the reorganisation of the global economy and some issues “we did not want to be there”, like US tariffs, Séjourné said. These nevertheless require the EU to react flexibly and with agility. “The method we use is as important as much as the target,” he concluded. This could be perceived as a rejection of US blanket tariffs, which lack the finesse of EU trade measures.
Adam Smith Poland
EU launches new import surveillance tool to protect industry from trade diversion
The European Commission has launched a new import surveillance tool to help protect EU markets from potentially harmful trade diversion, particularly in light of recent disruptions to global trade flows.
The European Commission has set up a new surveillance tool to help protect the EU against sudden and potentially disruptive surges in imports. This system aims to prevent harmful trade diversion, which occurs when a significant amount of goods that cannot enter other markets due to high tariffs and other restrictions are redirected into the EU. By providing fact-based information building on customs data, the surveillance tool will enable the Commission to swifty identify any such import surges and take early and effective action to protect the EU market from adverse impacts.
This development comes in direct response to a call to action by EUROMETAL in April 2025, where we urged EU institutions to implement faster and more transparent mechanisms to monitor import surges that could threaten the competitiveness of European steel distribution and service centres.
To further strengthen this initiative, the Commission is inviting EU manufacturers, industry associations and Member States to review the import trends available on the tool website and provide further market intelligence and data on the industry’s economic situation. This will further assist the Commission in identifying specific products that may be at risk due to significant import increases.
A dedicated task force to address trade diversion
The new tool builds on EU Commission President Ursula von der Leyen’s initiative to set up an import surveillance task force in order to protect EU markets and industries. This group is tasked with addressing the challenges posed by trade diversion, particularly in the wake of recent turbulence in the global trading system
The task force’s work is focused on providing timely and informed insights to support the Commission’s decision-making process. It has previously developed an internal dashboard, which monitors all imports to the EU and, through statistical analysis, also identifies products that have seen a potentially harmful increase of imports. Focusing on the period since 1 January 2025, the task force will keep monitoring imports and other indicators on an ongoing basis, with the results published online regularly.
Additionally, the Commission is setting up a dialogue with China to track possible trade diversion and ensure that any notable developments are duly addressed. This proactive approach will enable the EU to stay ahead of emerging trends and address any emerging risks. By working closely with key partners and stakeholders, the Commission is demonstrating its commitment to safeguarding the EU’s economic interests and promoting a level playing field for European industries.
Read More: ec.europa.eu