Fresh bookings in European domestic HRC market; buyers resist price rises
Several fresh bookings came to light in the domestic hot-rolled coil market of Northern Europe on Tuesday October 21. Nevertheless, prices still remain below mills’ targets.
Offers of HRC scheduled for delivery in December rose to a minimum of €600 ($696) per tonne ex-works and up to €640 per tonne ex-works following the European Commission’s proposal for sweeping reform of its steel import safeguards unveiled on October 7.
Customers, however, have been slow to accept new higher levels citing lack of demand and still a lot of uncertainty over the new proposed measures as well as Carbon Border Adjustment Mechanism (CBAM) policy, which is expected to be implemented starting January 1, 2026.
On October 21 market sources reported two deals within the range of €580-590 per tonne ex-works, which is not far from levels achieved earlier in October and in late September.
This compared with an offer at €620 per tonne ex-works reported by one of the suppliers in Germany.
Fastmarkets’ daily steel hot-rolled coil index domestic, exw Northern Europe was €595.00 per tonne on Tuesday, up by €3.54 per tonne from €591.46 per tonne on Monday.
The index rose by €6.25 per tonne week on week and by €15 per tonne month on month.
In Italy, offers from local suppliers varied within the range of €600-610 per tonne ex-works, while customers’ price ideas of workable levels varied. Some of them provided estimates at €570-580 per tonne ex-works, adding that levels above that are not achievable at the moment, while others were closer to mills’ target levels, but no particular sales were mentioned.
Fastmarkets’ daily steel hot-rolled coil index domestic, exw Italy was calculated at €585.42 per tonne on Tuesday, up by €0.42 per tonne from €585.00 per tonne on Monday.
The Italian index was up by €7.29 per tonne week on week but up by €35.42 per tonne month on month.
“The Italian market is very quick to react, and I am not surprised that now it is aligned with Northern Europe as there is a lack of import offers,” a buyer source from Southern Europe said.
The market for imported coil has been very quiet in Europe because most overseas suppliers are offering HRC with delivery in the first quarter of 2026 and, therefore, prices for these tonnages will be subject to the EU’s CBAM.
The policy still lacks details despite its implementation being projected for January 1, 2026.
The Italian market was traditionally more affected by imports due to higher inflow of foreign material compared with Northern Europe, as well as its limited number of domestic suppliers. Thus, domestic prices in the country moved closer to the ones in Northern Europe following the slowdown in import activity.
Italian steel production continues to rise
Italian crude steel production increased again in September following strong hikes in the previous months, industry association, Federacciai, says in a note obtained by Kallanish.
Federacciai says September production increased by 4.3% on-year to 1.8 million tonnes. Output in the first nine months of the year also increased by 3.2% on-year to 15.5 million tonnes.
“A positive trend can be observed for the two families of hot-rolled products,” Federacciai states.
Flat steel output increased steeply by 17.2% to 887,000t in September and by 5.7% to 6.7mt in January-September.
Longs output, meanwhile, increased by 10% in September to 1.7mt and rose 3.5% to 9.1mt in January-September.
Only the months of February and June have shown a slight decline so far this year.
Italian output has declined over recent years, falling by 5% on-year in 2024 to 19.9mt, by 2.5% on-year in 2023 to 21mt, and by 11.5% y-o-y in 2022 to 21.6mt.
Natalia Capra France
Commission trade proposal a ‘major shift’, says Motyka
The European Commission’s latest trade measure proposal to replace steel safeguards represents a “major shift” in how the Commission approaches World Trade Organization (WTO) rules, says Polish Steel Association (HIPH) chief executive Miroslaw Motyka.
The shift in fact already started last year when policymakers began work on new action plans for strategic EU sectors, including steel. “This is a solution the steel industry has long been calling for. It can be considered a new approach not only towards the steel sector, but also towards the entire European industry. Let’s hope this ambition and momentum will be maintained,” Motyka said at an industry gathering last week.
“The Commission, for the first time in its history, has changed its approach to World Trade Organization rules. It still recognises them, but treats them in a more creative and ambitious manner. This was also influenced by US trade policy under President Donald Trump. The industry feared that the new EU rules would be soft and compromise-oriented, and that by trying to please everyone, it would please no one. However, this did not happen,” he added.
“Quotas have been adjusted to market realities,” he noted.
Earlier this year, Motyka said the proposed melt and pour rule for EU trade defence instruments (TDIs) will help increase effectiveness of trade, having implications for TDIs, for Russian sanctions and for the carbon footprint of imports (see Kallanish passim).
CBAM must be extended to cover steel-containing goods and energy costs for industry must be brought below €60/MWh, he added
Adam Smith Austria
Voestalpine joins call for extended free CO2 allowances
Voestalpine has joined a cross-border alliance of 79 European industrial companies in an urgent appeal to European politicians to extend the deadline for free CO2 allowances, Kallanish hears from the steelmaker.
On 23 October, the European Council in Brussels will make decisions impacting the European industry, but an extension of free CO2 allowances is not planned.
The 79 companies together represent about 500,000 employees in Europe. In an open letter, they urge European policymakers to abandon the planned phase-out of free allocations from 2026 to 2034 and to extend this deadline.
The Austrian steelmaker says it currently pays around €200 million ($233m) annually for CO2 allowances into the budget of Austria. It would have to spend an additional €1-2 billion between now and the end of 2030 to meet the increasing need for allowances.
The timeline for the phase-out of free allocations from 2026 to 2034 is unrealistic, voestalpine says. It adds that the basic prerequisites for a fundamental technological shift – such as the sufficient availability of low-emission electricity or hydrogen at competitive prices including the necessary infrastructure – will not yet be in place.
“We are a reliable partner in decarbonisation, but the EU must adapt its emissions trading and timeline to technological realities,” it emphasises.
Christian Koehl Germany
New safeguards could displace EU downstream industry
EUROMETAL warns that unless steel derivatives and downstream products are encompassed by the same trade measures as primary steel, the European Commission’s proposed safeguard measures may unintentionally accelerate the displacement of EU downstream industry.
The Commission proposed earlier this month a measure to replace existing safeguards, with a view to cutting EU steel imports to 2013 levels. However, to the dismay of some market players, it does not cover imports of steel-containing manufactured goods, known as steel derivatives, thereby leaving European end-use manufacturers exposed.
In European steel processing companies, the cost of steel represents up to 70% of total invoiced sales, while net profit margins typically range between just 1% and 2%, EUROMETAL points out.
“These companies are already under immense pressure from foreign competitors benefitting from lower input costs, limited regulation, and in some cases, subsidies. When EU-origin steel prices rise due to reduced import quotas and stricter trade defence measures, imported steel-based products and derivatives will become even more competitive,” the distributors’ association’s president, Alexander Julius, writes in a letter dated 21 October to European Commission Executive Vice-President for Prosperity and Industrial Strategy Stéphane Séjourné.
“A 10% increase in domestic steel prices – a plausible outcome under the new safeguard terms – would be enough to push many European processing and manufacturing firms out of business, well before the end of the two-year observation period,” he adds.
The latest safeguard proposal has turned the need to protect derivatives “from a strategic priority into a matter of immediate survival”, Julius asserts.
Earlier this month, EUROMETAL published a paper warning that a surge in steel derivatives imports is quietly eroding Europe’s industrial base and threatening more than three million jobs. These derivatives are not classified as steel under EU customs codes and therefore largely bypass the EU’s existing trade defence instruments. This has turned Europe into a dumping ground for high-carbon steel derivatives diverted from the US market, it said.
Besides derivatives, EUROMETAL warns the proposed cut in imports creates a risk of supply shortages and rising prices, particularly for independent distributors. This comes amid ongoing production shutdowns – for example at Liberty and ADI – skills shortages after years of workforce reduction, limited production of certain specialised grades, and structural cost that may hinder price competitiveness.
“Semi-finished products … remain unrestricted, giving integrated EU mills privileged access to cheaper inputs not available to independent players,” Julius notes. “Mill-owned service centres, now exceeding 50% market share, are able to internalise costs and shield themselves from volatility – a luxury not afforded to independent SSCs.”
“These trends concentrate market power, undermine price transparency, and ultimately increase costs for manufacturers,” he adds.
“The elimination of mechanisms such as carry-over, combined with out-of-quota duties of 50%, creates volatility that threatens the supply stability needed by thousands of downstream producers,” Julius continues.
To remedy the situation, EUROMETAL has requested the Commission to extend safeguards to include steel derivatives and downstream steel-based products, and conduct a rapid impact assessment of the proposed measures on steel processors, distributors, and SMEs.
It also wants to maintain flexibility mechanisms, such as carry-over, to support seasonal and contractual stability, and ensure fair access to competitively priced materials for independent distributors and manufacturers.
Lastly, it is seeking to adopt country-specific quotas to improve predictability and support responsible trade flows.
Adam Smith Austria
Thyssenkrupp continues negotiations with Jindal over steel division sale
Germany-based Thyssenkrupp AG has confirmed that it is engaged in “intensive” negotiations with Jindal Steel International, a subsidiary of India’s Jindal Steel Limited, regarding the potential sale of its steelmaking business, according to a report by Reuters.
Thyssenkrupp CEO Miguel Lopez told Reuters that discussions with Jindal are “ongoing, very intensively,” signaling strong engagement between the two sides. Lopez said the company expects to determine the outcome “over the next few months.” He added that Thyssenkrupp’s current focus is on restructuring its steel operations and carefully evaluating Jindal’s proposal, which includes significant investment commitments toward green steel development in Germany.
Last month, Jindal Steel International submitted a non-binding bid for Thyssenkrupp Steel Europe as part of its strategy to strengthen its position on the continent, as previously reported by SteelOrbis. Jindal’s proposal includes completing the direct reduction iron (DRI) project in Duisburg and building additional electric arc furnace (EAF) capacity, with a financial commitment exceeding €2 billion. The acquisition, if completed, would give Jindal a foothold in advanced European steelmaking technologies and enable synergies with its existing production and export network in India.
Thyssenkrupp has so far faced difficulty with the sale of its steel division within the company’s restructuring agenda. Previous divestment efforts failed largely due to pension obligations and the complex cost structure of the steel business.
Industrial alliance urges delay to EU climate framework
An alliance of European industrial companies, including steelmakers voestalpine and Thyssenkrupp, have called on European Commission President Ursula von der Leyen to intensify, and delay the phase-out of domestic protections to the EU’s carbon reduction framework, according to a joint letter by alliance members.
The letter describes the “deep concern” of its signatories, representing companies across the EU’s industrial supply chains, “regarding the transformation and competitiveness of the energy-intensive industry,” and existential threats to both “the economic viability of this transformation” – and domestic industry itself.
Specifically, the alliance calls for a suspension to the currently scheduled phase-out of free allocations under the Emissions Trading System (ETS) and the Carbon Border Adjustment Mechanism (CBAM), a freezing of current ETS benchmarks, and greater availability of electricity price compensations for energy-intensive production – aiming to influence a meeting of the European Council and its discussions surrounding the compatibility of the EU’s climate objectives and its industrial competitiveness, scheduled for 23 October.
Without these amendments to the EU’s current climate protection framework, the group warns of additional carbon costs that could “exceed operational cash flow and profit,” and cause further carbon leakage across the energy-intensive value-chain; risking jobs, industrial competitiveness, and undermining climate change mitigation.
“Transformation must not lead to deindustrialization – it must be designed to be economically viable and technologically realistic,” says the letter. “The success of the transformation, achieved through a maximally supportive and realistic political framework, is therefore in the common interest of employers and employees alike.”
The letter stresses that European industry is “committed to ambitious climate protection,” and is “not only ready but already in the process of making its contribution […] through substantial investments,” but lacks “a shared conviction that industrial and climate policy do not exclude each other but depend on one another.”
The alliance also states that fundamentals to accommodate Europe’s industrial transition – such as green hydrogen and affordable clean electricity – are also lagging behind schedule, and global competitors are not matching the EU’s ambitions, creating an unfair playing field if regulatory developments proceed as planned. Geopolitical factors like this year’s tariff offensives from the United States, and positioning against China’s exporting industries, are also threatening European competitiveness.
The EU’s climate protection framework is largely centered around the ETS, which charges polluters for their carbon emissions by requiring them to secure European Union Allowances (EUAs) via auction. Energy-intensive producers, including the steel sector, receive free EUA allocations to protect their global competitiveness and avoid the relocation of these industries to third countries, but from 2026 these free allowances will begin to decrease, alongside a correlative phase-in of carbon cost liabilities on imports under CBAM.
The European Commission has recently proposed significant new trade protections for its primary steelmakers, but downstream steel-consuming manufacturing sectors remain relatively unprotected by both existing and proposed trade barriers to low-cost imports, and CBAM’s carbon leakage defenses.
Other industry groups such as those among the EU’s downstream steel associations have argued that trade and climate protection measures should be preserved, but extended downstream, while voestalpine and Thyssenkrupp’s industrial alliance calls for an effective suspension of relevant measures, alongside further subsidisation.
Steelmakers like ArcelorMittal and Salzgitter have already announced postponements to their planned decarbonisation projects, while others are proceeding with the assistance of public funds, though private financing is demonstrating new frictions.
It is unlikely that the European Council will agree to recommend delays to the fiscal implementation of CBAM from January, or a suspension to the ETS’s wind-down of free allocations, as these measures are enshrined in EU law and intrinsically linked to established policies like the EU’s climate targets 2030-2050, its positioning as a climate leader globally, and the EU budget.
The European Commission has already denied delays to CBAM, and has completed consultations on extending the measure to downstream imports. Collected ETS revenues are also allocated to industrial decarbonisation initiatives via the Innovation Fund, indicating the Commission’s preferred strategy is to expand or simplify protections to cover unintended impacts of its climate and trade policies, rather than reverse or delay them substantively.
However, there are increasing frictions between the EU’s climate goals and its national executives, on issues such as the EU’s 2040 climate target – by which point both ETS EUAs and free allowances would be extinguished under current rules – and its parameters, and potential export exemptions under the ETS and CBAM for domestic producers.
The Commission seems more adamant that the EU lead by example with its ETS and CBAM, reportedly looking to stimulate carbon pricing globally ahead of November’s Conference of the Parties (COP) in Brazil (via CBAM rebates for carbon prices already paid in equivalent ETS frameworks), and scheduling regulatory proposals to better clarify and review the CBAM/ETS by the end of the year or early next year.
Industrial critics of the Commission’s climate policies – such as this latest industrial alliance – highlight a disconnect between lofty climate ambition and geopolitical realities, as exemplified by last week’s collapse of the adoption of the International Maritime Organization’s (IMO) Net-Zero Framework, which saw talks postponed for one year after pressure from US representatives and threats of retaliatory tariffs.
Benjamin Steven Journalist, Steel
