Day: 22 September 2025

McCloskey hosted a Green Steel Day networking event in Düsseldorf, Germany, on 16 September, where we shared our views on the current developments in the European and global steel markets, the legislative agenda in the EU and longer-term decarbonization trends. In this article, we present a summary of the main topics discussed. 

European steel and green steel market overview

Domestic steel coil price recovery in the EU slowed in August, with buyers pushing back against further increases. However, the upcoming implementation of the Carbon Border Adjustment Mechanism (CBAM) in 2026, along with the expected introduction of tougher steel safeguard measures around the same time, continued to lend support to prices.

Interest in new import purchases has largely dried up, as longer lead times discouraged fresh bookings. Buyers are instead focusing on clearing available volumes through customs in 2025—even if that means exceeding import quotas and paying duties of up to 25%. Importers prefer to operate under the familiar safeguard system with its predictable risks, rather than commit to 2026 shipments before final CBAM regulations are clarified.

European green steel trading remains limited, held back by the lack of standard definitions for “green” steel and the weak overall steel market. Distributors have shown growing interest in low-CO2 products but remain reluctant to hold stock without a committed buyer.

Premiums for European hot-rolled coil (HRC) with green attributes currently range from €60/t to €300/t. Lower levels apply to mass-balance material, while the highest premiums are achieved in direct sales from trial plants to end users willing to absorb the additional cost.

Meanwhile, overseas mills have become more active in marketing green steel to the EU with significantly lower premiums than domestic suppliers. Some exporters have already secured Environmental Product Declarations (EPDs), while others promote coil produced via the direct reduced iron-electric arc furnace (DRI-EAF) route as “green,” with EPD certification expected soon. On average, premiums for Turkish and Chinese green HRC with CO₂ content below 1t (Scopes 1–3) were around $20/t.

European steel industry in the global context

China remains the main driver of steel industry trends due to its rising exports, which are triggering response from legislators worldwide. Since McCloskey launched its Steel Trade Measures Database in February, the number of active trade cases against Chinese steel products rose from 353 to 397, excluding universal measures like safeguards or tariffs. Despite this, in the first eight months of 2025, Chinese exports have risen by 10% y/y, reaching 77.5 mt. Most trade cases were introduced against flat steel products, and Chinese mills adapted in response. In the January-July period, exports of semi-finished products rose more than fourfold, to almost 7.5 mt, while long steel shipments surged by 49% y/y.

We don’t believe this trend can continue. Chinese steel production is declining – we expect it to be down by about 2% this year to 980 mt, and to fall to around 930 mt by 2030. More trade protection measures are also being introduced around the world, with a growing focus on anti-circumvention measures and “melt-and-pour” clauses. However, there is still potential for China to increase volumes going into Africa and South America, and there will be a rise in green steel exports from China as more producers gain the required certifications, keeping export volumes at historically high levels.

In the US, although prices have been under pressure due to tariff uncertainty, steelmakers increased their market share. In the first eight months of 2025, imports declined by 7%, while domestic capacity utilization rates are lingering just under 80%, up from low 70% at the start of the year. US mills are also committing to significant capacity expansions, and according to McCloskey estimates, over 15 mt of new capacity is currently planned, under construction, or being ramped up in the country.

Meanwhile, the European steel market continues to suffer from weak demand, weighing on price levels. This has translated into lower mills margins and led to blast furnace closures, which by September reached 23.3 mt.

McCloskey expects to see a change of direction in Europe next year, forecasting a 5% rise in regional crude steel production in 2026, with domestic output partly replacing imports displaced by CBAM and tougher trade protection barriers. There will be a boost from the German stimulus spending on infrastructure, but we are cautious about the near-term upside. Spending is likely to face hurdles such as a slow planning process, tight labour market, and some estimates suggest a 10% shortfall in infrastructure and defence plans because of the bottlenecks.

European Steel and Metals Action Plan

The implementation of executive commitments under the European policy environment are lagging behind industry requirements. Signalled support in the European Steel and Metals Action Plan (ESMAP) – agreed as necessary to preserve domestic stakeholder competitiveness – has been slow to start and, in some cases, is intensifying rather than mitigating uncertainties within the European steel supply chain.

Pressures from global overcapacities are undermining European steel decarbonisation pathways and competitiveness. Yet despite wide-ranging support proposed by ESMAP, substantive progress remains thin and largely limited to industry consultation and debate.

That said, technical clarifications scheduled for the end of the year do show some promise in giving the market a stronger foundation to recover, aligned to improved demand forecasts for 2026. Impending legislation or substantive proposals surrounding lead-market generation for low-carbon steel via public procurement and green standardisations, renewed trade protection mechanisms to support underlying investment cases, and long-awaited details core to calculations of cost exposures generated by the upcoming CBAM’s definitive stage are all scheduled before the end of 2025.

Overall, the market is still awaiting the regulatory push it needs to secure transition-dependent competitiveness. Confidence in European authorities is patchy, but the combination of legislative signals and executive commitments is flickering a light at the end of the tunnel, hopefully in time for a better 2026.

Ongoing and planned decarbonization projects

Steel decarbonisation pathways vary across regions, which have different legal requirements, composition of steelmaking capacities and access to resources.

In Europe, where the pace of decarbonization is regulated by law, more than 40 projects have been announced, and some are at an advanced stage of implementation. These include greenfield projects, but most initiatives aim to replace carbon-intensive blast furnace – basic oxygen blast furnace (BF-BOF) capacity.

According to McCloskey estimates, by 2045, the EU could produce more than 80 mt of green steel per year from new EAFs, which are expected to replace around 70 million tonnes of BF-BOF capacity. New EAF-based projects are mainly focused on flat steel production, which requires DRI to feed the EAFs, along with steel scrap. However, our estimates also show that by 2045, European steelmakers will produce only half of the DRI needed, thus relying on supplies from other regions.

This is why we are now witnessing the beginning of the DRI boom in the Middle East and North Africa (MENA) region, where two-thirds of new projects are greenfield installations and most are hydrogen-ready DRI facilities, running on natural gas as the reducing agent until hydrogen becomes available and affordable.

DRI projects in the MENA region are still taking shape, with many yet to receive final investment decisions. However, according to industry sources, some projects can be scaled up to 10 mt per year and will focus on exporting hot briquetted iron (HBI) to European steelmakers.

The renaissance of DRI in the MENA region is also attracting iron ore giants, including Brazilian Vale. Its strategy is to establish iron ore briquette production hubs near DRI/HBI producers. Vale claims that these briquettes can replace DR pellets in DRI shaft furnaces.

Similar developments are starting to emerge in Asia. China, Japan and South Korea are mostly focused on environmental improvements of their relatively modern BF-BOF capacities, but at the same time they are moving towards scrap-EAF or DRI-EAF production, with dozens of new EAF installations in China alone. This motivates Australia to invest in DRI/HBI capacities targeted at the emerging Asian green steel market.

The emerging green steel market is growing rapidly, with new projects being announced regularly and existing ones being modified or even cancelled. Each year, the still-elusive contours of this new green steel industry become clearer, attracting new players, investments, and technologies, and potentially reshaping the status quo of the global steel industry.

McCloskey will be closely monitoring this constantly changing market, collecting and analysing all available data. We look forward to presenting our insights to you at events like the one we have organised for our clients and friends in Düsseldorf.

Benjamin Steven Journalist, Steel

Maria Tanatar Associate Director, Steel and Green Steel

Marina Maliushkina Associate Director, Global Steel Analysis

Sergey Babichenko Senior Research Analyst

opisnet.com

Fastmarkets’ monthly price assessment for steel sections (medium) domestic, delivered Northern Europe was €710-740 ($835-870) per tonne on Wednesday, widening down by €15 per tonne from €725-740 per tonne a month earlier.

Similarly, Fastmarkets’ monthly price assessment for steel sections (medium) domestic, delivered Southern Europe was €710-740 per tonne on Wednesday, also widening down by €15 per tonne month on month from €725-740 per tonne.

Poor construction sector activity continues to weigh on demand, and regulatory uncertainty has fostered a “wait-and-see” mood among buyers, sources told Fastmarkets.

According to the European steel industry association Eurofer, the outlook will remain negative with demand forecast to decline by 0.2% to 128 million tonnes in 2025.

Still, the forecast is less bleak than previous expectations of a 0.9% decline in apparent consumption. While Eurofer forecasts a modest output increase in construction activity this year overall, significant growth in that sector is only project to return in 2026.

Meanwhile, hot-rolled coil feedstock costs rose during the month.

Fastmarkets’ daily calculation of its steel hot-rolled coil index domestic, exw Northern Europe was €581.25 per tonne on Wednesday, up by €6.04 per tonne from €575.21 per tonne a month earlier on August 18.

The offer is backed by a €2 billion ($2.14 billion) green-steel investment, and evokes earlier waves of India-led consolidation in Europe’s steel sector, according to market sources.

Parent conglomerate Thyssenkrupp AG confirmed that it had received a non-binding, indicative offer from Jindal Steel International for the purchase of its steelmaking division. Thyssenkrupp AG acknowledged the offer and Jindal published an announcement on Tuesday September 16.

“The executive board of Thyssenkrupp AG will carefully review this offer, paying particular attention to its economic viability, the continuation of the green transformation, and employment at our steel locations,” the company said.

TKSE produces around 11 million tonnes per year of crude steel, employs about 27,000 people, and operates one of Germany’s largest integrated steel mills in Duisburg.

Restructuring context
TKSE is currently working to downsize production capacity and staff numbers after reaching an agreement with major German metalworkers’ trade union IG Metall in July. It planned to reduce output to 8.7-9.0 million tpy by 2030, from about 11 million py.

In July 2024, Thyssenkrupp sold a 20% stake in TKSE to EP Corporate Group (EPCG), the holding of Czech billionaire Daniel Křetínský, as part of efforts to reshape its steel division. EPCG and TKSE have since been in talks to establish a 50:50 joint venture, although IG Metall criticized the arrangement, citing a lack of clarity over the new shareholder’s long-term strategy.

Meanwhile, Jindal has not disclosed specific financial details of its bid but pledged more than €2 billion to complete the Duisburg direct-reduced iron (DRI) plant and to install new electric-arc furnace (EAF) capacity.

According to one industry source, Jindal’s interest in acquiring a major European steel asset is reminiscent of a strategic model laid down by Lakshmi Mittal – notably his acquisitions in Germany in the late 1990s, followed by the 2006 formation of ArcelorMittal – which was viewed as a blueprint for Indian firms seeking scale and consolidation in Europe.

Tata Steel’s takeover of Corus in 2007 was another example of Indian expansion into Europe. This was a deal that later ran into serious headwinds, including high restructuring costs, pressure from cheaper steel imports and a global economic downturn.

Market reaction
Market sources said that the Jindal offer was strategically attractive because producing within the EU would shield a hypothetical European Jindal steel arm from safeguard duties and levies under the EU’s Carbon Border Adjustment Mechanism (CBAM), while also providing access to potential subsidies to offset green steel costs.

But industry sources also noted challenges to securing a deal, pointing to the need for trade union support, TKSE’s pension obligations (worth several billion euros) and questions over whether synergies with Jindal’s operations in Oman could affect Duisburg’s future capacities for liquid and semi-finished steel.

Contrast with peers
Jindal’s commitment to proceeding with Duisburg’s DRI-EAF plans, as part of its TKSE bid, was in stark contrast to leading European steelmaker ArcelorMittal’s halting of similar green transition projects in Bremen and Eisenhüttenstadt in June, when it cited high energy costs, policy uncertainty and unfavorable market conditions.

Jindal and IG Metall were contacted for comment on these matters, but neither had responded by the time of publication.

Italy
Italian heavy plate prices narrowed upward in the latest deals.

Fastmarkets’ weekly price assessment for steel domestic plate, 8-40mm, exw Southern Europe, was €600-620 ($707-731) per tonne on Thursday, narrowing upward by €10 per tonne from €590-620 per tonne a week earlier.

Northern Europe
In contrast, Northern Europe saw prices for domestic steel plate widen downward slightly, with trade subdued.

Fastmarkets’ weekly price assessment for steel domestic plate, 8-40mm, exw Northern Europe, was €620-665 per tonne on Thursday, narrowing downward by €5 per tonne from €620-670 per tonne a week earlier.

Imports
Imported steel plate from Asia was offered to Southern Europe at €590 per tonne CIF, with the supplier reported to be offering to take on risks and costs related to the EU’s Carbon Border Adjustment Mechanism (CBAM).

Fastmarkets’ weekly price assessment for steel plate (8-40mm) import, cfr main port Southern Europe, was €590-600 per tonne on Thursday, narrowing upward by €5 per tonne from €585-600 per tonne a week earlier.

But market sources said that there was still not much interest in importing material at the moment.

“I think people prefer to see some real numbers related to CBAM from the European Commission,” one producer source said, “and domestic prices are not so much higher.”

Improving cost competitiveness is an urgent priority for the EU carbon and specialty steel industries, Antonio Marcegaglia said at this week’s SMR International Stainless & Special Steel Conference in Istanbul.

While advances in AI and digitalisation can provide some relief, a structural cost gap compared to Asian producers is likely to persist. Limited protection measures can help level the playing field, yet excessive protectionism risks harming long-term competitiveness.

Specialty and stainless steel demand in Europe are expected to improve in the coming months, supported by CBAM and other protectionist measures, following a year of limited gains, Marcegaglia told Kallanish following the event.

Competitive pressures from Asia, rising energy costs, and tightening raw material access are testing the resilience of European specialty steel producers, particularly in strategic segments. Key priorities for EU institutions include boosting domestic demand, addressing high energy costs, securing strategic raw materials, re-establishing a level playing field without resorting to excessive protectionism, and approaching the Green Deal with a technology-neutral perspective.

At the company level, “each player should find its best strategic positioning option but, defensive shrinking or a passive attitude are risky,” Marcegaglia stated.

The EU should remain an attractive hub for high-value steel production. Expanding markets for European products is crucial, though high production costs restrict opportunities. Rising protectionism, particularly from the US, complicates this picture. Nevertheless, regions such as Africa, the Middle East and North Africa, and the post-war reconstruction of Ukraine offer opportunities for growth.

For mid-size players, a strategy of downsizing or specialising can be valuable, particularly in niche or high-end segments. However, much of the underlying demand remains for commodity products, Marcegaglia argued.

Relocating production, while sometimes considered, is an expensive and complex option, as each country presents its own challenges, and such a strategy is “not really suitable for the specialty steel industry”, he noted.

Diversifying the industrial footprint and enhancing one’s position within the supply chain are equally critical, but this requires strong management and a careful corporate culture to ensure cohesion across different sites. When executed effectively, diversification can also mitigate risks posed by protectionist measures, he added.

Ultimately, consolidation remains a logical avenue when the industry requires restructuring.

On a more positive note, Marcegaglia concluded that despite rising costs, geopolitical tensions, protectionist measures, slowing European domestic demand, overcapacity, and decarbonisation obligations, Europe still retains significant competitive advantages.

“It is a democracy, with a decent welfare, wealth and social equilibrium; [it] is a stable and predictable environment, able to attract talent and financial investments. If governance and unity improve, significant reforms and investments could be implemented … Competency and talent, coupled with AI potential, could close the competitive gaps with other economies,” he concluded.

Natalia Capra France

kallanish.com

ArcelorMittal has raised doubts over its current industrial configuration in Spain, sparking concern over the future of its plants in Asturias. The company has joined other sector participants’ criticism of the EU’s Steel & Metals Action Plan for its lack of effectiveness.

“The situation is unsustainable. We have no short-term visibility on the market situation and need real and quick measures from the European Union,” a company spokesperson tells Kallanish.

Blast furnace A at the Gijón mill in northern Spain is near the end of its operational life, with an extension requiring major investment deemed unfeasible in current market conditions. BF B will enter maintenance shutdown next week, while Sinter plant A is scheduled to cease activity before 31 December, in line with environmental commitments to the Asturias authorities. These changes will force the company to import material, raising production costs and challenging the viability of BF operations.

The situation in Spain is similar to that of the overall European sector, with demand and sales prices depressed due to the high volume of non-EU imports that do not pay CO2 emission taxes. The sector is urging a review of the safeguard measures and the CBAM mechanism, in line with Eurofer demands.

“The incapability of finding an agreement on steel and the vagueness of the US-EU Joint Statement on trade is detrimental to our producers, who remain subject to a 50% tariff and de facto cut off from their second export market. It’s everything but the certainty we need in these already turbulent times,” Eurofer director general Axel Eggert said during the publication of Eurofer’s latest economic and steel market outlook (see Kallanish passim).

“With cheap imports continuing to be diverted to the EU, we cannot help but fear further closures and layoffs – including in our downstream sectors – with the irreversible loss of strategic EU assets to the benefit of our direct competitors in the US, Asia, North Africa and the Middle East,” he added.

Todor Kirkov Bulgaria

kallanish.com