CBAM uncertainty is Northern Europe’s main steel price stimulus
Northern Europe’s steel mills and stockists fear that demand will not support an uptick in coil values before the end of 2025, with CBAM providing the market’s only price stimulus.
Despite recent interest rate cuts in the EU and United Kingdom, and positivity around the German government’s plans to invest in infrastructure and defence, sentiment has remained negative, this month.
MEPS’s prices were unchanged month-on-month in Belgium, France, Germany and the UK. This was despite two ArcelorMittal list price increases, totalling EUR50 per tonne.
Sales stalled and most mills implemented maintenance stoppages of two-to-three weeks during the summer holiday period. Some of Europe’s major steelmakers are implementing longer-term production cuts.
Domestic mills’ reduced output and increased offer prices may have mitigated a decline which has left Northern EU values at their lowest point this year. Buyers in France said that prices bottomed in mid-July, before rising moderately. They add that EU mills’ delivery lead times have lengthened to October or November for certain sizes of galvanised coils, possibly helping to stabilise prices of that product.
Importers’ uncertainty intensifies
Uncertainty around the cost of new CBAM taxes, from January 1, and the future of the EU import safeguard measures, are stifling the import market. All MEPS respondents in the EU expect these factors to be the main source of upward price pressure in the coming months.
German importers say that suppliers in Indonesia and South Korea are starting to offer “free on truck” delivery terms or offering to absorb the as-yet-unknown cost of CBAM taxes. Furthermore, hedging against CBAM is now being offered by certain European banks.
The UK government’s tightening of its import safeguard quotas has increased duties on galvanised coil, in particular. High volumes of galvanised coil are now sitting at UK docks, awaiting customs clearance in October.
Offers of Asian-origin hot rolled coil into the UK are around GBP50 per tonne cheaper than the EU equivalent. Furthermore, UK stockholders have high inventories of cold rolled coil.
Automotive sector in decline
Demand from high-margin projects has maintained sales for some stockists in Belgium and the UK. Generally, large projects are in short supply.
Northern Europe’s automotive sector is struggling amid reduced sales and intense competition from Chinese electric vehicles. Despite new EU import taxes, Chinese brands’ sales grew by 91% year-on-year in the first half of 2025, reaching 347,135 units, according to Jato Dynamics.
Eurofer expects EU vehicle production to decline by 2.6% year-on-year in 2025, following a 9.7% dip last year. UK car production was down 7.3% year-to-date, in June, at 385,810 units – its lowest level since 1953.
Steelmakers need coil prices to rise ahead of contract talks with automotive OEMs keen to make cost savings.
Germany approves carbon storage law to secure climate neutrality and industry
The German federal government has announced that it has approved a draft bill amending the Carbon Dioxide Storage Act (KSpG), significantly expanding the legal framework for carbon capture, transport, and underground storage (CCS). Until now, CCS projects in Germany were limited to research and pilot operations.
The German federal government has announced that it has approved a draft bill amending the Carbon Dioxide Storage Act (KSpG), significantly expanding the legal framework for carbon capture, transport, and underground storage (CCS). Until now, CCS projects in Germany were limited to research and pilot operations.
This amendment is considered a crucial milestone in Germany’s plan to achieve climate neutrality by 2045, while also safeguarding the country’s industrial competitiveness.
Why carbon storage is needed
Certain industrial emissions, particularly in steel, cement, and lime, cannot be fully eliminated, even with the latest low-carbon technologies. For these sectors, CCS is indispensable in reaching net-zero targets, the government stated.
Since CCS infrastructure requires seven to 10 years to build, the government stresses that projects must begin immediately to ensure facilities are operational by the early 2030s.
Expanded legal framework
A 2022 review of the KSpG confirmed that CCS and carbon capture and utilization (CCU) are required under Germany’s Federal Climate Protection Act (KSG).
The amendment now provides industries with:
- Legal certainty to justify long-term investments,
- A path to scale CCS from pilot projects to full deployment, only permitted if proven safe for health and the environment.
By laying the legal foundation today, Berlin aims to accelerate project development, ensuring infrastructure is in place to meet climate targets without eroding industrial strength.
Impact on the steel industry
SteelOrbis understands that the German government’s revised Carbon Dioxide Storage Act positions CCS as a necessary pillar for hard-to-abate industries such as steelmaking. While German steelmakers such as thyssenkrupp are testing CCU through projects such as Carbon2Chem®, and ArcelorMittal Germany is linked to cross-border carbon pipeline initiatives, no large-scale capture and storage project has yet been realized at steelworks. The new legal framework ensures that once steelmakers move beyond hydrogen-based decarbonization, they may have access to transport and storage infrastructure, making their pilot projects and infrastructure studies directly aligned with Berlin’s strategy.
Romania’s rebar prices stable, wire rod spot prices under pressure from weak demand
This week, Romanian rebar prices have remained stable as the country’s sole domestic producer and local traders have maintained their offers. In contrast, the wire rod segment has experienced a slight softening, reflecting slower demand.
The ongoing vacation period in Romania, combined with generally subdued activity across the EU, has kept the market quiet. However, with September approaching and the new quota period on the horizon, some interest and unconfirmed deals have emerged this week, particularly involving Romanian buyers sourcing from Turkey.
In the domestic market, ex-works offers from the sole rebar producer have held firm at €585-590/mt, while retail prices across Romania have remained unchanged, at €580-595/mt ex-warehouse.
Conversely, wire rod traders, responding to softer demand, have slightly reduced offers to €575-585/mt ex-warehouse, down from €580-590/mt reported in the previous week.
In the import market, activity has begun to increase as the new EU quota period approaches and the summer vacation period concludes. According to market sources, Romanian buyers have expressed interest in rebar and wire rod from Turkey, with indicative levels of $530-545/mt FOB, although purchases remain unconfirmed. Turkish mills currently quote export offers at $535-550/mt FOB, which, at an exchange rate of €1 = $1.16, correspond to €475-490/mt CFR for delivery to Romania, in line with the previous week. Other non-EU suppliers, such as Egypt, have maintained stable offers for October shipments, with rebar priced at €485-490/mt CFR and wire rod at €495-500/mt CFR. Within the EU, Bulgaria has slightly reduced offers to €595-605/mt CPT, down from €600-610/mt CPT, for September-October shipments. Additionally, Moldova has entered the market this week, offering rebar at €590-600/mt CPT.
German monthly steel output continues to fall
The crude steel production of German mills in July 2025 was 13.7% lower than in July 2024, at 2.7 million tonnes, according to latest figures provided by steel federation Wirtschaftsvereinigung (WV) Stahl.
The year-on-year gap was similarly wide to that of June, which was minus 15.9%, Kallanish notes. The gap has widened during the year.
While WV Stahl does not give explanations, the trend suggests that the US safeguard duties policy took its share in the activity of German mills, as a similar trend has been reported in Austria (see Kallanish 28 July 2025).
Very likely, US restrictions and altered trade flows had imports to Europe take a higher market share, while export business went down.
WV noted that the picture is quite mixed when looking at the production routes. Crude steel output on the oxygen/blast furnace route in July fell by as much as 19.6% to 1.9mt, while on the EAF route, rose by 2.8%, to 821,000t. However, that increase is attributable to very low EAF production one year ago, WV Stahl explains.
Christian Koehl Germany
