Day: 3 April 2026

CBAM has a potential cost impact on long products of €50/short ton ($58) but is yet to be fully realised due to significant import frontloading prior to CBAM implementation in January, says US steelmaker CMC of its European operations.

CMC Poland saw steel shipments fall 8% on-year in its second fiscal quarter through February to 284,000 short tons, driven by lower rebar deliveries as merchant bar and other products sales rose 2% to 215,000st, Kallanish notes.

The large quantity of rebar imported ahead of CBAM implementation temporarily dampened demand for domestic material, CMC notes. Despite this overhang, the average selling price for CMC’s steel products rose 10% on-year to $672/st, in anticipation of CBAM’s eventual supportive impact. Cost of scrap utilised was up 6% to $356/st.

CMC’s Europe Steel Group achieved its highest total steel products average selling price in six quarters.

Revenue increased 1% to $200 million but adjusted Ebitda was negative 0.7% versus positive 0.4% a year earlier.

Adjusted Ebitda should improve substantially in the following quarter on higher seasonal volumes, modestly improved metal margins, and the anticipated receipt of an approximately $20m CO2 credit, CMC says.

In the six months through February, steel shipments grew 4% on-year to 646,000st, while sales rose 10% to $447.7m but Ebitda fell 64% to $9.5m.

The European Commission has announced the first Emissions Trading System (ETS) reform measure proposal, which would allow all allowances in the Market Stability Reserve (MSR) above 400 million to be kept as a buffer to support market stability. Currently, all allowances above this number are invalidated annually.

Although a key decarbonisation driver in the EU, “in light of recent challenges, the EU ETS needs to be modernised and made more agile”, the Commission says in a note seen by Kallanish.

The MSR, in operation since 2019, is a rules-based mechanism that reduces the supply of emissions allowances to the market when there are too many in circulation and injects allowances when there is market scarcity. It addressed the allowance build-up after the 2008 financial crisis and helped restore confidence in the carbon market, invalidating 3.2 billion allowances in the process, the Commission says.

“Therefore, the invalidation provision has served its purpose. It should cease to apply from the date of entry into force of this amendment. The earlier the proposal is adopted, the more allowances could be prevented from being invalidated and could be held in the MSR,” it notes.

The proposed change will better equip the MSR to respond to future market developments. “Allowing a greater number of allowances to remain in the MSR rather than invalidating them could provide an essential liquidity buffer to manage future market tightness after the mid-2030s and beyond,” it adds.

The proposal will now be submitted to the European Parliament and Council and would need to follow the ordinary legislative procedure (co-decision) for adoption.

A comprehensive review of the EU ETS will follow in July. This will include any relevant adjustment to keep the MSR fit for purpose in the next decade.

Negotiations with the two bidders for the sale of Acciaierie d’Italia (ADI) are becoming increasingly complicated, Kallanish observes.

The protracted process also reflects the reluctance of banks and credit institutions to finance the relaunch of the Taranto site, which remains in a complex legal situation following the judiciary’s seizure of one of its blast furnaces last year over pollution concerns, creating an unresolved chain of responsibilities.

Flacks Group confirms it has asked the government for a vendor loan to support the site’s relaunch. “Not one bank after talking to 30 banks would lend money due to the court seizure of the Taranto site in November and all the issues surrounding Ilva,” Michael Flack tells Kallanish.

He adds that the slow Italian system, which needs to take into account Taranto’s level of pollution and the legal intricacy of the situation, is making the process extremely complicated and long. The vendor loan is intended to finance the relaunch of Ilva for the first six months after Flacks is awarded the plant.

Meanwhile, Jindal’s offer appears to have stalled, with sources close to the dossier believing it has not been retained. This comes amid market rumours the steelmaker has not provided financial guarantees as required.

The proposed plan involves boosting Taranto’s re-rolling capacity rather than primary steelmaking. Over the next four years to 2030, the Taranto plant would operate with two blast furnaces while one electric arc furnace is constructed. From 2030 onwards, the blast furnaces would be shut down and dismantled, with production shifting to EAF steelmaking. Sources have previously said these plans could result in the permanent loss of capacity, with employment also impacted.

By contrast, the plan presented by Flacks Group involves ramping up crude steel output at Taranto to 6 million tonnes within 18 months of completion of the sales process. This includes maintaining a workforce of over 6,000 employees, installing three EAFs and a 100MW solar plant on site, and potentially developing a DRI unit as the blast furnace route is gradually phased out.

Jindal has been contacted for comment by Kallanish.