Tariffs and energy: ArcelorMittal Luxembourg urges the EU to act
At its New Year’s ceremony on Wednesday 21 January in Differdange, ArcelorMittal Luxembourg drew a harsh assessment of the steel situation in Europe. Faced with global overcapacity, pressure from imports and energy costs, the group is calling for rapid European measures to preserve a competitive, low-carbon steel industry. And it is delighted with its new dust capture installation.
Meeting in Differdange for the 2026 New Year’s ceremony, the directors of ArcelorMittal Luxembourg delivered a detailed analysis of the situation in the steel market and the challenges facing the European steel industry. Valérie Massin, country manager, and Pierre Jacobs, CEO of long products Luxembourg, described a strategic sector weakened by global imbalances, while reaffirming the group’s industrial commitment to the Grand Duchy.
Pierre Jacobs recalled the central role of steel in the modern economy, present in infrastructure, construction, automobiles and now electric vehicles, as well as in the circular economy thanks to its recyclability. However, this indispensability contrasts with the evolution of the global market. In 2024, global steel production reached around 1.8 billion tonnes, almost three-quarters of which was produced in Asia, mainly in China, but also in India, South Korea and Japan. The European Union’s (EU) share now stands at only around 130 million tonnes, or less than 10% of global production, and is down by around 25% on levels before the health crisis.
This contraction is accompanied by a reversal in trade flows. Whereas the EU was still a small net exporter of steel in 2015 and 2016, since 2017 it has become a net importer, with imports sustainably exceeding exports. This development is having a direct impact on European industrial capacity utilisation. After a sharp fall during the 2009 financial crisis and then in 2020 with the health crisis, the production capacity utilisation rate today remains at low levels, often below 70%, reflecting both the scale of imports and an economic climate deemed gloomy in Europe.
Target of zero fatal accidents
There are also social issues at stake. The European steel industry represents around 300,000 direct jobs, over a million indirect jobs and several hundred thousand induced jobs. In terms of added value, the steel ecosystem contributes several hundred billion euros to the EU economy.
At the level of the ArcelorMittal group, Pierre Jacobs recalled the strategic priorities, starting with the health and safety of employees. Since the group was created in 2006, the lost-time accident frequency rate has fallen from around 3 in 2007 to 0.68 in 2025, at a time when the company has set itself the target of zero fatal accidents from 2027. The CEO acknowledged the highly ambitious nature of this objective, pointing out that fatal accidents have still been recorded in recent years, including in Luxembourg.
Installation reliability is another key focus, both for cost control and for meeting the delivery times promised to customers. Any unforeseen breakdown is likely to disrupt the production chain and the service provided. Added to this is the Group’s strategic growth, both organically and through acquisitions, illustrated in particular by expansion projects in India, Brazil and the United States.
The climate issue also plays a central role. As a heavy industry by nature, the steel industry is highly exposed to the challenges of decarbonisation. Pierre Jacobs pointed out that Luxembourg was ahead of the game in the 1990s when it replaced blast furnaces with electric furnaces, which emit at least four times less CO2. This transformation is a model that the group intends to extend to other European and global sites.
If the EU waits until June, the 50% surcharge will come too late
Economic indicators confirm the current tensions. The PMI index, a barometer of industrial activity, has been fluctuating below the 50 threshold since 2023, signalling a lack of real growth, including in Luxembourg. In terms of prices, the hot-rolled coil benchmark shows that European prices are still lower than those in the United States, while Chinese export prices are much lower. China, which accounts for around 50% of the world’s steel production, thus has a major competitive advantage, fuelling pressure on the European market.
Valérie Massin extended the analysis by highlighting the structural deterioration of the market. Global overcapacity is estimated at almost 600 million tonnes, while European demand is contracting and cost differentials between European and non-European producers persist, notably due to energy prices. Faced with this situation, the European Commission presented an action plan on steel and metals in 2025, aimed at strengthening trade defence instruments, limiting imports and implementing the carbon adjustment mechanism at borders.
As far as imports are concerned, a ceiling of around 18 million tonnes of steel that can enter the European market freely is envisaged, above which a surcharge of up to 50% would apply. For ArcelorMittal, the challenge now is to implement these measures quickly. Delayed deployment, particularly after the first half of the year, could significantly reduce their effectiveness for 2026. All the more so as imports have been increased in anticipation by “stockists” who will not only have acquired stocks at lower cost, but who will no longer want Luxembourg products as a result.
A strategy to circumvent the balancing mechanism
The border carbon balancing mechanism, which comes into force on 1 January 2026, is a long-awaited step forward for European producers. However, Valérie Massin pointed to persistent loopholes, in particular practices that allow certain producers to direct lower-emission production towards Europe, while selling higher-carbon volumes elsewhere. In her view, these situations undermine the objective of a level playing field between producers subject to the EU ETS (Emissions trading system) and their international competitors.
Energy costs remain another determining factor. Since the war in Ukraine, gas and electricity prices in Europe have remained well above those in the United States or China, even though energy is a major input in steel production. While the European plan sets out guidelines, the group is still waiting for concrete measures for the wholesale market and for industries that consume a lot of energy.
In Luxembourg, ArcelorMittal employs around 3,510 people across several industrial and administrative sites. The country is ahead of the game in terms of decarbonisation, with 98% of its production based on electric furnaces using mainly recycled scrap metal. The group also highlights emblematic achievements, such as the supply of exceptional parts for the Henry Ford Hospital site in Detroit or the development of XCarb steel, showing around 300 kilos of CO2 per tonne produced thanks to the use of green electricity.
At the same time, ArcelorMittal is continuing to invest in Luxembourg, notably with the construction of its future world headquarters on the Kirchberg plateau, scheduled for completion in the first half of 2027. The building, 14,000 tonnes of steel, will embody the group’s expertise in low-carbon steel and sustainable construction.
Tosyalı urges EU to remove Türkiye, Algeria’s quotas
Tosyalı Holding’s chairman Fuat Tosyalı is calling on the European Union (EU) to remove steel import quotas for Türkiye and Algeria, arguing that the measures undermine the EU’s own steel industry and contradict sustainability goals, Kallanish notes.
Tosyalı is quoted by Anadolu Agency saying the quotas which are designed to shield Europe from Asian, particularly Chinese, imports are also being applied to Türkiye, which he described as a key upstream supplier for the EU.
“The EU should lift quotas for countries like Türkiye and Algeria that provide low-emission upstream steel. Otherwise, it risks weakening its own downstream industries,” he adds while at the World Economic Forum Annual Meeting in Davos.
Tosyalı underlines that low-emission upstream steel products produced in Türkiye and Algeria should not be subject to any quota restrictions, adding that this would allow the EU to introduce green steel more effectively into its own industrial ecosystem.
He also warns that China’s dominance, accounting for nearly half of global crude steel production, continues to distort global markets, driven by overcapacity, subsidies and weak demand. Global excess steel capacity currently stands at around 680 million tonnes and could exceed 720 mt by 2027, he concludes.
Tosyalı also highlights that the steel industry is one of the main contributors to global warming, stressing that outdated, high-emission steel plants should no longer be supported by governments worldwide.
CBAM reshapes India’s steel access to Europe: webinar
The EU’s Carbon Border Adjustment Mechanism is emerging as a structural test for India’s steel export model. Carbon intensity, verification credibility and product exposure to EU demand are set to determine market access from 2026 onwards, speakers said during a recent webinar.
The first meaningful CBAM financial settlement will occur in 2027, based on emissions embedded in 2026 shipments for Indian exporters. Carbon costs are therefore expected to be reflected increasingly in product selection and customer pricing, rather than absorbed uniformly across export volumes, Kallanish notes.
Sentra.world’s co-founder and chief executive, Harsh Choudhry, said CBAM exposure could ultimately account for 10-20% of product cost for carbon-intensive steel once EU free emissions allocations decline.
Product exposure is uneven and concentrated in EU-facing flat steel grades. Cargill regional trading lead Ankur Mishra said around 50% of India’s hot rolled coil and plate exports are directed to Europe. While this represents a sizeable share, these volumes can be more easily diverted to Asian markets if EU economics weaken.
By contrast, dependence is far higher for downstream flat steel, as 95% of India’s CRCA exports and 80% of coated steel shipments, including galvanised and other value-added products, are sold into Europe.
Switching economics further amplify this risk as the price gap between selling HRC into Europe versus Asia is currently around $30/tonne, making diversion feasible. However, for CR and coated products, Europe offers a much higher premium that cannot be easily substituted in Asian markets.
Benchmark emissions for blast furnace-based steel are set at around 1.37 tonne of CO₂/t, while actual emissions for many Indian installations are closer to 2.1 tCO₂/t. When verified emissions data are accepted, this implies a CBAM cost of roughly €65-70/t for HRC and downstream coated products. If EU authorities apply default emissions values, the CBAM burden could escalate to €250-300/t, materially undermining competitiveness.
This places verification credibility at the centre of India’s export outlook. JSW Steel vice president of corporate sustainability Swaroop Banerjee said Indian mills are largely capable of generating verified emissions data, but EU buyers remain cautious as audit rules evolve.
Exports to the EU from carbon-intensive regions such as India and China will be affected as CBAM removes the price advantage of traditional production routes, Banerjee added.
Any perceived weakness in data integrity allows EU authorities to impose default values, effectively turning CBAM into a non-tariff barrier for Indian flat steel.
Despite these pressures, exports are unlikely to face an immediate collapse. Indian mills retain some ability to absorb CBAM costs of up to around €150/t, particularly for coated and value-added flat products that already command premiums in Europe. This buffer is expected to narrow steadily towards 2030 as free allocations are phased out.
Verification capacity may itself become a constraint. Bureau Veritas’ Anirban Chatterjee said only auditors accredited by EU-recognised national bodies can conduct CBAM verification. While interim pre-verification is possible, accredited audits will be mandatory for final compliance.
Domestic CRC, HDG prices rise across Europe as imports dry up amid regulatory pressure
European downstream flat steel prices continued climbing in the week to Wednesday January 21, but recent gains were mainly attributed to import-curbing regulatory pressure, rather than a real pickup in demand, sources told Fastmarkets.
Earlier this week, ArcelorMittal came to the market with higher offers for hot-rolled, cold-rolled and hot-dip galvanized coil across Europe, Fastmarkets reported.
Notably, offers for April-delivery HDG from the supplier were reported at €820 ($963) per tonne base delivered (around €805 per tonne ex-works), compared with €780 per tonne base delivered for March.
And for CRC, offers were reported even higher — at €830 per tonne base delivered (€815 per tonne ex-works) for April lead times.
The market was still digesting the increase, but most buyer sources in both Southern and Northern Europe continued reporting lower tradable prices for both CRC and HDG.
Northern Europe
Buyers in Germany and the Benelux area estimated workable levels for CRC at no higher than €740-760 per tonne ex-works during the week to January 2 — pretty much in line with the previous assessment period.
Some transactions were reported within the mentioned range.
One integrated mill in the region reported target offers at €770-780 per tonne ex-works for April-delivery CRC so far.
Another supplier was aiming for €780 per tonne ex-works.
Most of the suppliers in the region were sold out for the first quarter delivery CRC, Fastmarkets heard.
The CRC market in Europe is traditionally mainly dominated by imports, especially in the commodity grades segment, but recent regulations developments — notably an anti-dumping investigation, targeting CRC originating in India, Japan, Taiwan, Turkey and Vietnam, and covering around 65% of the EU’s total CRC imports — curbed import options.
On top of that, the Carbon Border Adjustment Mechanism (CBAM) rollout as of January 1 also limited new imports.
Therefore, stronger reliance on European suppliers allowed them to close first-quarter order books quite fast, sources said.
Fastmarkets’ weekly price assessment for steel cold-rolled coil, domestic, exw Northern Europe was €740-760 per tonne on Wednesday, widening upward from €740-750 per tonne the previous week.
For hot-dip galvanized coil, offers in Northern Europe were reported at €780-805 per tonne ex-works for April lead times.
Italy-origin HDG was offered to Germany at €770-780 per tonne base delivered.
So far, tradable prices for HDG across Europe have also remained below ArcelorMittal’s target offers — with recent trades in Northern Europe reported at €750-770 per tonne ex-works.
Fastmarkets’ weekly price assessment for steel hot-dipped galvanized coil, domestic, exw Northern Europe was €750-770 per tonne on Wednesday, narrowing upward from €745-770 per tonne a week earlier.
Southern Europe
In Southern Europe, especially in Italy, domestic CRC availability was tight due to limited number of suppliers.
Notably, in Italy, deals for CRC were reported at €770-780 per tonne ex-works during the assessment week.
“There is only one CRC supplier in Italy, and almost no new imports. So, CRC price increase is even outpacing HDG,” a buyer in Italy said.
“There is practically no import availability — since over half of traditional import is under anti-dumping investigation, and on top of that we have CBAM and safeguards. This [regulation pressure] is the only driver for domestic price increase,” a second buyer said.
Fastmarkets’ weekly price assessment for steel cold-rolled coil domestic, exw Southern Europe was €770-780 per tonne on Wednesday, rising by €10-20 per tonne from €750-770 per tonne heard in the previous week.
Meanwhile, Fastmarkets’ weekly price assessment for steel hot-dipped galvanized coil, domestic, exw Southern Europe was €760-780 per tonne on Wednesday, widening upward from €760-770 per tonne during the previous week.
During the assessment week, transactions were reported in Italy, Spain and Portugal within the mentioned range.
Sources were not ruling out further price rises in the upcoming weeks.
“Maybe ArcelorMittal’s move [to increase prices] was too soon, but we expected it. And buyers do not have many options to choose from,” a buyer in the Iberian market said.
Imports
In the meantime, the market for overseas coil was broadly quiet over the past seven days, with CBAM, ongoing anti-dumping investigations and expected change steel safeguards measures significantly curbing buyer’s appetite for overseas steel.
New offers were scarce — for both CRC and HDG coil, source said.
“For CRC, all traditional suppliers [India, Japan, Taiwan, Turkey and Vietnam] are under anti-dumping investigation, so we avoid booking from them. And for other there are CBAM costs, which are more or less manageable only for Brazil maybe,” a second buyer in the Iberian market said.
During the assessment week, an offer for Thailand-origin CRC was reported at €655 per tonne CFR to Italy, excluding CBAM costs.
And CRC offers from South Korea was reported at €750-760 per tonne DDP in Spain, versus €725-730 per tonne DDP before Christmas. No fresh deals were reported so far.
Buyers estimated achievable prices for imported CRC at €720-730 per tonne DDP.
So far, to manage unpredictable CBAM costs, European buyers were prioritizing import bookings on a DDP basis — which at least partially accounted for CBAM costs of imported goods, but deals were still rare.
Fastmarkets’ weekly price assessment for steel cold-rolled coil, import, ddp Southern Europe was €720-750 per tonne on Wednesday, rising from €700-725 per tonne seven days earlier.
European steel HRC prices inch up on supplier bullishness, CBAM factor
The European steel hot-rolled coil market rose on Wednesday January 21 mainly because suppliers were pushing prices upward, having full order books at least till March, based to a large extent on limited import availability.
Earlier this week, leading European steelmaker ArcelorMittal increased its offer prices for flat steel across Europe.
The new HRC offer was €700 ($817) per tonne delivered, around €685 per tonne ex-works.
“The [ArcelorMittal] price increase came sooner than expected, and new offers are way above the real market level,” a buyer in Germany said. “We will not be able to digest this [new offer] quickly and pass it downstream.”
A buyer source pointed out that steel-service centres across the region were well stocked and not hungry for tonnages.
“The demand [for flat steel] remains stable [in Europe]. It’s neither great, nor terrible – flat since last year. So all these price rises are only due to Carbon Border Adjustment Mechanism [CBAM] and the safeguards effect on new imports,” a second buyer said.
One integrated supplier in Northern Europe said that it was also planning to increase offer prices for April-delivery HRC, but “in smaller steps,” setting a sales target at €650-660 per tonne ex-works.
At the same time, other sources said that one German mill was hoping to achieve at least €700 per tonne delivered for April volumes.
“New offers are absolutely out of touch with reality because buying is quiet, restocking is expected only in early February, and real demand is stable, so all rises are CBAM-driven,” another source on buyer side said.
A transaction was reported at €640-645 per tonne ex-works in the Benelux region area, while buyers’ estimates of achievable prices were around €630-640 per tonne ex-works on Wednesday.
Fastmarkets’ daily steel hot-rolled coil index, domestic, exw Northern Europe, was €642.59 per tonne on January 21, up by €1.84 per tonne from €640.75 per tonne on January 20.
The index was also up by €1.34 per tonne week on week and by €18.84 per tonne month on month.
Fastmarkets’ daily steel hot-rolled coil index domestic, exw Italy, was calculated at €635.00 per tonne on Wednesday, increasing from €631.67 per tonne a day earlier.
The index was up by €5.00 per tonne week on week and by €21.25 per tonne month on month.
Offers were reported as high as €650 per tonne exw, while estimates of a workable price were at €630-650 per tonne exw depending on volume.