Official CBAM benchmarks not confirmed until 2026
Key benchmarks for calculating specific steel import cost exposures under the upcoming fiscal stage of the Carbon Border Adjustment Mechanism (CBAM) will likely not be officially unveiled until the first quarter of 2026, McCloskey learns from private European Commission correspondence.
In a letter from Gerassimos Thomas, director-general for the Taxation and Customs Union of the European Commission, the Commission representative outlines that CBAM benchmarks “will be based on the respective [European Union Emissions Trading System] benchmarks,” which “are being updated for the period 2026-2030.” The letter is dated from the start of this week and was seen by McCloskey on 1 October.
Gerassimos said that he expects that the benchmarks for the EU’s carbon market “will only be adopted in early 2026. This means that a final list of CBAM benchmarks may only be available at that moment.”
Benchmarks for the EU carbon market track free allowance allocation to the different installations covered by the scheme to prevent carbon leakage, or companies leaving the European Union to set up operations in jurisdictions without a carbon pricing mechanism. As the CBAM is phased in from 2026 to 2034, installations across Europe will gradually receive fewer and fewer free carbon allowances until these are phased out entirely by 2034.
European steel importers have been operating under the expectation that the CBAM benchmarks – which are multiplied against the free allocation-tracking CBAM factor and then deducted from the total embedded emissions – would be presented before the end of this year. This was premised upon the European Commission’s Steel and Metals Action Plan, recent consultations on the technical aspects of CBAM, and its commitment to releasing implementing acts on the benchmark rules in the fourth quarter.
Importantly however, the Commission’s commitment to clarifying the rules defining the benchmarks is not necessarily a commitment to releasing the specific values themselves, and could be limited to outlining correspondence between the two systems.
Gerassimos’ letter aligns with McCloskey’s previously reported response from European Climate Commissioner Wopke Hoekstra to Filip Turek – a Czech member of the European Parliament – in early September about the ETS-CBAM benchmark codependence, undermining European steel importers’ expectations that official CBAM benchmarks would be available before 2026
As a core part of the formula for calculating the extent of embedded emissions liable to CBAM-covered imports like steel, importers require these ETS-CBAM benchmark values to forecast their specific and itemized cost exposure to the carbon leakage mechanism, and manage their finances on current import purchases.
Steel importers have already been deterred from bringing material into Europe on existing exposure uncertainties, avoiding material with lead times beyond the start of 2026, and in some cases signaling a preference to clear material in Q4 even if subject to out-of-quota duties of 25%.
If release of the benchmarks is pushed further into Q1, then importers could be facing the same barriers of uncertainty for another quota period – either pushing import purchases back further, or taking another hit on out-of-quota duties.
As the European Commission is also currently preparing its long-term replacement for the EU’s steel safeguard system, with strong speculations and steelmaker lobbying for an intensification of out-of-quota duties to 50% and possible implementation from January, the European import market could see an even heavier CBAM burden than it is already shouldering.
McCloskey has wide-ranging databases on upcoming green steel projects worldwide in our Green Steel Profiles, but even if importers can source the cleanest steel globally for European import, they cannot truly know the opportunities of capitalisation without clarification on CBAM and its calculation benchmarks.
Benjamin Steven Journalist, Steel
EUROMETAL President speaks at PUDS conference on Steel Processing in Katowice
On 29 September, EUROMETAL President Alexander Julius participated in the high-level conference “Processing Means Distribution”, hosted by the Polish Steel Distributors Federation (PUDS) at the Silesian Museum in Katowice.
The event marked a significant moment for PUDS, which announced the inclusion of “steel processing” — reflecting the growing importance of value-added services and processing in the steel supply chain.
delivered a keynote presentation focused on the evolution of steel distribution in Europe, highlighting how processing is no longer just a complementary service, but a core strategic activity that increases value for both steel suppliers and manufacturing customers.
He also introduced EUROMETAL’s mission and work, with particular attention to the economic and industrial value of distribution and processing for the EU manufacturing base, the role of steel distributors in the implementation of EU sustainability tools such as CBAM, CSRD, ESPR, and ETS and EUROMETAL’s advocacy work in Brussels, including the Steel Derivatives initiative, aimed at protecting EU industry from unfair competition and carbon leakage.
The event offered a valuable platform for exchange between Polish stakeholders on how to strengthen the role of steel processors within a more integrated and sustainable distribution model.
EUROMETAL congratulates the newly elected President of PUDS and EUROMETAL Board Member Piotr Sikorski and applauds the initiative to evolve the federation’s scope. We also extend our sincere thanks to former PUDS President Iwona Dybał for more than a decade of excellent collaboration and commitment to strengthening the role of steel distribution in Poland and Europe.
EU HRC producers struggle to fill Q4 order books; buyers cautious, sitting on high stocks
European hot-rolled coils prices were broadly unmoved on Tuesday September 30, with suppliers facing challenges in filling fourth-quarter order books amid subdued demand. A proposal for new steel trade measures to replace existing safeguards is expected in early October, sources told Fastmarkets.
November-December delivery HRC was on offer at €590-610 per tonne ex-works from integrated mills in Northern Europe. But sources pointed out that local suppliers were not actively pursuing higher offers for fourth quarter delivery HRC.
“[HRC] offers at €600 [per tonne ex-works] and higher are of the table at the moment. Buyers did not accept,” a steel-service center in the region said.
“Buyers still have sufficient stocks – they booked more coil domestically and overseas in the third quarter, amid bullish moods and CBAM/safeguards concerns,” a mill source said.
The European Commission is expected to publish a legal proposal on new trade measures to replace existing safeguards on October 7, so in line with the previously indicated timeline, several sources familiar with the matter told Fastmarkets.
Achievable prices were reported by buyers in Germany and Benelux area at €570-580 per tonne ex-works.
One German buyer said, that for big volumes [5,000 tonnes and above] it would be possible to negotiate prices below €570 per tonne ex-wokrs, “but nobody was looking to buy big lot [of HRC].”
“Mills have empty order books for December, while buyers don’t need tonnages,” a German buyer said.
Fastmarkets’ calculation of the daily steel hot-rolled coil index, domestic, exw Northern Europe was €577.50 per tonne on Tuesday, down by €0.42 per tonne from €577.92 per tonne on Monday September 29.
The Northern European index was down by €1.25 per tonne week on week and down by €0.83 per tonne month on month.
Fastmarkets’ daily steel HRC index, domestic, exw Italy was calculated at €550.00 per tonne ex-works on Tuesday, down by €0.63 per tonne from €550,63 per tonne on Monday.
The Italian index was up by €1.25 per tonne week on week and up by €8.33 per tonne month on month.
Trading remained slow in Italian market, and local participants estimated achievable prices for HRC in the nation at €540-550 per tonn ex-works. One source claimed that for large tonnages mills were ready to step down to €530 per tone ex-works.
Official offers were hoovering at around €570 per tonne ex-works, but no sales at such levels were reported.
Overall sources expressed doubts about possibility of uptrend in the upcoming weeks.
“Mills need to sell November, December production, while buyers are not really desperate for volumes,” a local buyer said.
“We will see what quotas look like in October [Q4 allocations open on October 1], calculate inventories and see what needs to be booked,” they added.
Offers for overseas coil were stable on Tuesday. HRC from Turkey was available at around €520-530 per tonne CFR, including the EU anti-dumping duty, for December arrival.
From India, offers were reported at €520-530 per tonne CFR for November-shipment coil.
The lowest offers were reported from Indonesia at €490-500 per tonne CFR. Several sources noted there was a room for €10-15 per tonne discount for a large volumes.
Germany’s Klöckner divests from eight US distribution sites
Klöckner & Co., a Germany-based producer and distributor of steel and non-ferrous metals, has announced the sale of seven distribution sites located in the US and run by its subsidiary Kloeckner Metals Corporation to US-based steel producer Russel Metals.
The sites are located in Austin and Houston (Texas), Charlotte (North Carolina), Dubuque (Iowa), Jacksonville and Pompano Beach (Florida), and Suwanee near Atlanta (Georgia). In a separate transaction, one additional distribution site in Amarillo, Texas, will be sold to Service Steel Warehouse.
Guido Kerkhoff, CEO of Klöckner & Co. emphasized that these divestments represent “decisive milestones in the consistent execution of our strategy”. He underlined that the company aims to focus on value-added processing and fabrication services, while reducing dependency on cyclical commodity distribution.
This move aligns with the company’s strategic program “Klöckner & Co: Leveraging Strengths – Step Up 2030”, which prioritizes:
- Growth in service center business
- Expansion in processing and fabrication solutions
- Sustainable, profitable operations in North America and Europe
- Financial impact of divestment
By reallocating capital away from distribution, Klöckner & Co can strengthen its higher-value portfolio, according to the company’s press release. Excluding the eight divested sites, the share of sales from value-added and service businesses rose to 86 percent in the first half of 2025, compared with 81 percent including them.
EU HRC producers struggle to fill Q4 order books; buyers cautious, sitting on high stocks
November-December delivery HRC was on offer at €590-610 per tonne ex-works from integrated mills in Northern Europe. But sources pointed out that local suppliers were not actively pursuing higher offers for fourth quarter delivery HRC.
“[HRC] offers at €600 [per tonne ex-works] and higher are of the table at the moment. Buyers did not accept,” a steel-service center in the region said.
“Buyers still have sufficient stocks – they booked more coil domestically and overseas in the third quarter, amid bullish moods and CBAM/safeguards concerns,” a mill source said.
The European Commission is expected to publish a legal proposal on new trade measures to replace existing safeguards on October 7, so in line with the previously indicated timeline, several sources familiar with the matter told Fastmarkets.
Achievable prices were reported by buyers in Germany and Benelux area at €570-580 per tonne ex-works.
One German buyer said, that for big volumes [5,000 tonnes and above] it would be possible to negotiate prices below €570 per tonne ex-wokrs, “but nobody was looking to buy big lot [of HRC].”
“Mills have empty order books for December, while buyers don’t need tonnages,” a German buyer said.
Fastmarkets’ calculation of the daily steel hot-rolled coil index, domestic, exw Northern Europe was €577.50 per tonne on Tuesday, down by €0.42 per tonne from €577.92 per tonne on Monday September 29.
The Northern European index was down by €1.25 per tonne week on week and down by €0.83 per tonne month on month.
Fastmarkets’ daily steel HRC index, domestic, exw Italy was calculated at €550.00 per tonne ex-works on Tuesday, down by €0.63 per tonne from €550,63 per tonne on Monday.
The Italian index was up by €1.25 per tonne week on week and up by €8.33 per tonne month on month.
Trading remained slow in Italian market, and local participants estimated achievable prices for HRC in the nation at €540-550 per tonn ex-works. One source claimed that for large tonnages mills were ready to step down to €530 per tone ex-works.
Official offers were hoovering at around €570 per tonne ex-works, but no sales at such levels were reported.
Overall sources expressed doubts about possibility of uptrend in the upcoming weeks.
“Mills need to sell November, December production, while buyers are not really desperate for volumes,” a local buyer said.
“We will see what quotas look like in October [Q4 allocations open on October 1], calculate inventories and see what needs to be booked,” they added.
Offers for overseas coil were stable on Tuesday. HRC from Turkey was available at around €520-530 per tonne CFR, including the EU anti-dumping duty, for December arrival.
From India, offers were reported at €520-530 per tonne CFR for November-shipment coil.
The lowest offers were reported from Indonesia at €490-500 per tonne CFR. Several sources noted there was a room for €10-15 per tonne discount for a large volumes.
EU Steel Distribution: Sentiment stabilises in September, but recovery remains elusive
The latest EUROMETAL Market Sentiment Survey for September 2025 reveals a tentative stabilisation in market sentiment across Europe’s steel distribution sector. While the mood remains cautious and far from optimistic, the sharp declines seen in July appear to have bottomed out — with most indicators either flatlining or showing slight improvement.
This month’s data reflects a sector that is still under pressure, but possibly adjusting to the challenging environment by adopting a more measured stance. Price expectations, in particular, show a modest recovery — although still not enough to suggest a strong rebound.
Assessment of current activity
After July’s sharp downturn, sentiment regarding current activity has returned to levels seen in early summer. While still modestly negative, September shows a slight upward correction, hinting that the sector may be adjusting to the weak demand environment or seeing signs of stabilisation. The improvement, however, is marginal and should not be overstated — activity remains below the neutral line.
Outlook for future activity
The forecast for the coming quarter has also nudged upward in September, reversing part of the pessimism recorded in July. The trend suggests that expectations are no longer worsening, and some respondents may be cautiously optimistic about Q4. Nevertheless, sentiment remains fragile, and the overall mood continues to reflect low confidence in near-term recovery.
Stock position outlook
The stock volume outlook remains consistent with previous months: largely unchanged. The central positioning of responses and minimal variation across the past five months indicate continued risk aversion. Distributors are maintaining defensive inventory strategies, avoiding overstocking in an uncertain demand environment.
Price expectations
In contrast to other indicators, price sentiment shows the clearest sign of improvement. September marks the second consecutive month of recovery from the sharp dip seen in May and June. While still hovering around neutral, the trendline points upward — suggesting that expectations of stabilising or even slightly rising prices are beginning to take hold. This may reflect better supply-demand balance or seasonal effects.
While the market environment remains difficult, the September 2025 EUROMETAL Sentiment Survey suggests that the worst may be behind us — at least for now. Caution still dominates distributor behaviour, but the absence of further deterioration is notable. If these stabilising signals continue into Q4, the European steel distribution sector could enter 2026 in a more resilient position.
This analysis is based on the EUROMETAL Market Sentiment Survey, reflecting the views of 217 industry participants for September 2025.
Interested in our Sentiment Tool? Contact us.