Day: 2 July 2026

The European steel industry has called on EU institutions to preserve the integrity of the EU Emissions Trading System (ETS) and strengthen the Carbon Border Adjustment Mechanism (CBAM), warning that current investment decisions will determine whether steel production, jobs and industrial value creation remain in Europe.

In a joint statement, Outokumpu, SSAB, Salzgitter AG, Saarstahl, Dillinger and Stahl-Holding-Saar said they are collectively investing more than €10 billion in low-emission steel production and modernized assets, but stressed that continued investment requires a predictable and credible policy framework.

Companies call for maintaining key ETS mechanisms

The companies described the ETS as the cornerstone of the EU’s climate policy and said its carbon price signal must be maintained.

They called for retaining the Linear Reduction Factor (LRF) at 4.4 percent until at least 2035, aligning the post-2035 trajectory with the EU’s 2040 Climate Law, maintaining the existing CBAM factor and free allocation phase-out schedule, and preventing the use of the Market Stability Reserve (MSR) to artificially increase the supply of emissions allowances.

According to the statement, weakening the ETS would undermine investment certainty, penalize early movers and delay industrial decarbonization.

Steelmakers seek stronger CBAM and ETS revenue reinvestment

The companies argued that the main challenges to competitiveness are high electricity costs driven by fossil fuel dependence, infrastructure shortcomings and global steel overcapacity rather than carbon pricing. The steelmakers also emphasized that effective carbon leakage protection is essential. They said the CBAM should be strengthened by extending its scope to steel-intensive downstream products, preventing circumvention, and introducing a permanent solution for exports. They added that ETS revenues should be reinvested in industrial decarbonization, particularly in sectors covered by the CBAM.

Lastly, they urged EU institutions to safeguard the ETS, avoid measures that would weaken the carbon price, and accelerate the strengthening of the CBAM, stating that a competitive, low-emission European steel industry is essential for Europe’s sovereignty, security and resilience.

The EU’s recently revealed trade measure, which replaces the previous safeguard regime with a stricter tariff-rate quota system, has drawn broadly supportive reactions from European steel producers, who see the implementation as a necessary response to global overcapacity and import pressure, while UK-based industry representatives have welcomed the preservation of partial tariff-free access but warned that reduced quotas and tougher trade conditions could weigh on exporters and downstream steel users.

The European Commission detailed the country-specific quota allocations under the new post-safeguard regime, setting an annual tariff-free volume of 18.35 million mt across 26 steel product categories, with quotas divided into quarterly volumes and split between FTA partners and other exporting countries, as previously reported by SteelOrbis.

European steel industry welcomes stronger protection

The European Steel Association (EUROFER) has welcomed the EU’s new steel trade measure, describing it as a landmark shift in industrial and trade policy that could help restore up to 15 million mt of lost European steel production.

EUROFER director general Axel Eggert stated that the measure marks a turning point for the European steel industry, providing breathing space for producers to recover while supporting competitiveness, decarbonization and industrial resilience. The association added that the new framework should eventually be extended to downstream steel-containing products to protect the broader manufacturing value chain from import pressure.

Despite the tighter regime, EUROFER noted that 18.3 million mt of steel imports will still be allowed into the EU duty-free each year, stressing that TRQ allocations should remain fair and reflect established trade flows and integrated supply chains.

Germany calls for loopholes to be closed

German Steel Federation (WV Stahl) also welcomed the new changes, calling it an effective response to global overcapacity and rising import pressure. While praising the introduction of a more flexible quota mechanism and 50 percent tariffs once quotas are exhausted, the association urged the European Commission to close remaining loopholes in the trade flow by extending protection to all steel products, including downstream steel-intensive goods, and by introducing a mandatory “melted and poured” rule to determine the true origin of steel products.

UK industry warns of tougher trade conditions

In contrast, UK steel producers expressed concerns over reduced access to the EU market. Tata Steel UK CEO Rajesh Nair said the combined effect of the EU’s revised quota allocations and the UK’s own steel import measures is likely to have a significant impact on the company, adding that fair and workable access to the EU remains essential for the long-term sustainability of the UK steel industry.

Meanwhile, UK-based trade association UK Steel welcomed the introduction of dedicated UK country allocations, noting that they provide greater certainty for exporters, as more than 70 percent of UK steel exports are shipped to the EU. However, the association stressed that further discussions are needed to improve access for key high-value steel products as UK-EU trade negotiations continue.

The British Chambers of Commerce (BCC) described the announcement as the “final piece of the jigsaw” for the UK steel sector, highlighting that roughly two-thirds of UK steel exports will remain tariff-free for the next five years. Nevertheless, the organization warned that UK producers and downstream industries will continue to face a more challenging trading environment, urging the government to remain open to further adjustments if the new arrangements prove detrimental to businesses.

Two months after a landmark EU-Mercosur free trade agreement went into provisional effect on May 1, the EU has unexpectedly introduced import quotas on South American finished steel products, breaching the earlier agreement for unspecified reasons, media reports indicate.

The quotas apply to finished steel products from South American (Mercosur) countries after the two blocs signed the historic free trade agreement on Jan. 17 this year.

The breach of the agreement was made without prior negotiations with Mercosur members Argentina, Brazil, Paraguay and Uruguay, or with associated countries Bolivia, Chile, Colombia, Ecuador and Peru.

According to local press reports, the EU has granted Brazil an annual quota of 227,000 metric tons (mt) of finished steel products, while slabs and billets will remain exempt from import tax.

Marco Polo Melo Lopes, executive president of the Brazilian Steel Institute, was quoted by newspaper Valor Econômico as saying that “Negotiations are still ongoing because the EU proposal is unsatisfactory and needs adjustments to the product categories.”

The trade agreement is important because it creates one of the largest free trade zones in the world, linking the EU with a South American block of countries representing more than 700 million people.

The original provisional agreement -still subject to legal review by the European Court of Justice- was designed to reduce or eliminates tariffs on 90 percent of bilateral trade in goods, strengthen EU access to critical minerals such as lithium, and included a safeguard mechanism for sensitive agricultural sectors as well as providing a safety net for European farmers.

Spanish technology manufacturer Fagor Arrasate (FA) has expanded its coil processing capabilities by acquiring Herpasa, a manufacturer of stainless steel tanks based in Castellbisbal, Kallanish notes.

The transaction was made possible after the acquired company went into liquidation following the conclusion of insolvency proceedings.

“Our immediate priority is to ensure the continuity of Herpasa’s ongoing projects, providing the necessary resources and sales network to bring the company to the next level,” says FA. “The entire workforce will be retained and strengthened, thereby ensuring continuity of service and preserving the specialist expertise that has long defined this brand.”

No financial details of the transaction have been disclosed.

Italian longs stainless steel producer Cogne Acciai Speciali has taken a further step forward in its €8 million ($9.1m) green hydrogen project at its headquarters in Aosta, northern Italy.

The steelmaker has finalised the purchase of hydraulic turbines for a hydroelectric power plant to be built on the Dora Baltea river, adjacent to the facility, Kallanish notes.

The plant, with an average annual output of 315kW, will include three StreamDiver production units built by Voith Hydro. Energy for the electrolyser will be supplied by the hydroelectric plant alongside a newly constructed rooftop photovoltaic system.

The project aims to eliminate emissions from a heat treatment furnace by replacing natural gas with green hydrogen produced through electrolysis, advancing the company’s decarbonisation.

The project is part of Italy’s National Recovery and Resilience Plan under the Green Revolution and Ecological Transition mission, and is funded by the European Union’s NextGenerationEU programme, Cogne reveals in a note.

The steelmaker commissioned the green hydrogen pilot project last year (see Kallanish 15 September 2025).

Swiss firm Trasteel is set to begin leasing the coil processing facility of Magona in Piombino, Tuscany, previously owned by Liberty Steel, according to sources close to the matter.

The company has reportedly signed a lease agreement under which Magona’s operations are expected to resume in September, paving the way for Trasteel’s planned acquisition of the company.

“This is a positive turning point for Liberty Magona, for the Piombino steelmaking hub and, more broadly, for the Italian steel industry,” says minister of Enterprises and Made in Italy Adolfo Urso (MIMT) in a note obtained by Kallanish. “We will closely accompany this industrial process, in coordination with trade unions and local authorities, to consolidate the relaunch of the plant and safeguard jobs and production.”

The deal will ensure the site’s industrial continuity. Trasteel has already begun the technical and commercial work needed to restart the plant, with the aim of gradually reaching full utilisation of both equipment and workforce, MIMt continues.

Discussions with trade unions will open in the coming days to manage the transfer of all 500 employees.

According to an informed source, Magona’s operations will officially resume in September, though Trasteel will have the facility begin some work as early as next month, with output gradually ramping up to full capacity next year.

Trasteel is said to have offered €36 million ($41m) over eight months from the date of signing as a lease payment to be deducted from the purchase price.

It has reassured stakeholders that it will secure a buying option on 40,000 tonnes of hot rolled coil to keep Magona operational in the fourth quarter, and will purchase around 4,800t of HRC for re-rolling at the facility between end of June and July.

In a published note it confirms it is “fully focused on delivering this important project in Piombino, a strategic steel hub for the country”.

Trasteel was not available for comment to Kallanish before the press deadline.

Trasteel is buying Magona from the Greensill receiver after the collapse of the bank in 2021, which left Liberty on the brink of insolvency, with the firm battling to find new sources of financing to continue operations (see Kallanish passim).

Northwestern European plate mills have announced price hikes of up to €70/tonne ($80), Kallanish is told by market observers.

The announcement has not been heard ubiquitously, but is confirmed by various market sources who tell of a hike range of €50-70. This has thus far been heard being demanded by mills in Germany and Belgium, but apparently not from re-rollers.

The move defies the ongoing lull in demand on the European market. In addition, it comes in midsummer, arguably the low point of market activity in an already weak year. This leads one observer to believe that “mills are trying to stir up commotion which they do not even expect to take effect, and which will be forgotten by the time some activity restarts after summer.”

Others are not so sure. The hike attempt comes from mills with a large share of project activity and production of high-tensile grades. Their customer base is more willing to accept an increase for commodity grades, too, for orders of mixed qualities. The move would bring S355 grade plate close to €900/t, according to one buyer.

For many weeks, the price range was anywhere between €800 and €850, with offers differing widely between mills. The latest signals even indicated a softening, which is a normal trend during long periods of non-movement. Managers of inventories need to generate turnover of material and cash flow, one source explains. “The picture is not uniform. Some have dipped below €800. I have heard offers at €790, too,” he says.

The UK’s revised steel safeguard measures came into force on Wednesday July 1, reducing tariff-free import quotas by 51% across a range of steel products and introducing tighter limits on duty-free access for overseas suppliers.

The final reduction was lower than the 60% cut initially proposed by the UK government earlier this year. Import volumes exceeding individual tariff-rate quota (TRQ) allocations will continue to face a 50% out-of-quota safeguard tariff.

The revised system has drawn criticism from across the steel supply chain, with domestic producers arguing that the final quotas did not provide sufficient protection against imports, while downstream users were still concerned about reduced supply flexibility and higher costs.

Steelmakers question final quota levels

Tata Steel UK said that the final quota framework did not fully reflect the challenges facing domestic steel production.

“In several categories, the quota volumes continue to allow significant import penetration into strategically important UK steel markets, exposing domestic production and supply chains to continued pressure,” Tata Steel UK chief executive Rajesh Nair said in a public statement.

Nair added that quota arrangements would need to provide adequate support for domestic producers to achieve the government’s ambition of building a sustainable steel industry capable of supplying a larger share of UK demand.

Industry association UK Steel highlighted galvanized steel as one area of concern, arguing that quota allocations for some suppliers had increased the pressure on domestic producers.

Downstream users warn of supply risks

Fastmarkets has previously reported that downstream steel users, including stockholders, processors and traders, had warned that tighter quotas could restrict access to products and grades not currently available in sufficient commercial volumes from UK producers.

Yorkshire-based stockholder Cleveland Steel & Tubes, a major importer of steel grades, said that the quotas could lead to higher costs and reduced competitiveness, according to managing director Roy Fishwick.

“For one specific size of steel that we supply, the entire 2026 quota has been swallowed by a single infrastructure project on Merseyside,” Fishwick said in an interview with local newspaper The Northern Echo on May 29.

The Confederation of British Metalforming (CBM) said that lower quotas, combined with potential out-of-quota tariffs, could increase the pressure on manufacturers and steel users across the supply chain.

“Misguided quota reductions, compounded by the inevitable imposition of tariffs, have left metal stockists and manufacturers facing increasing commercial pressures, tighter margins and the prospect of job cuts across the supply chain,” CBM president Stephen Morley said.

The UK government introduced transitional arrangements ahead of the measures’ implementation, allowing certain goods already under contract before March 14, 2026, to remain exempt from the out-of-quota duty between July 1 and September 30.

Market participants will now monitor quota utilization rates and whether reduced availability pushes buyers toward out-of-quota imports.

 

European domestic and import flat steel market went silent on Wednesday July 1 digesting the news on allocation of import quotas that came to light a day earlier.

Although total quotas were widely known well in advance, the distribution of volumes among countries remained an intriguing point that had kept everyone’s attention for months, as many buyers booked material to be custom-cleared starting July 1, 2026, without knowing the country-specific allocations until the very last moment.

Some buyers even were heard to cancel deals in June in order to avoid possible risks. Among cancelled bookings Fastmarkets heard hot-rolled coil cargoes from Algeria and Indonesia.

Algeria eventually received no country-specific quota for HRC and will be able to sell material within the FTA Quota – Other countries allocation on  first-come, first-served basis.

Among the most dramatic changes was a 60% reduction in Turkey’s HRC quota to just 642,249 tonnes per year, from 1.59 million tonnes under the previous safeguard regime. The UK’s quota was also cut to 153,924 tonnes from 559,177 tonnes under the previous regime.

In the cold-rolled coil segment, some of the largest cuts affected Indian material, with the quota reduced to 269,974 tonnes per year from 655,822 tonnes under the previous regime. The UK quota was cut to 79,338 tonnes from 351,003 tonnes.

Overall, the HRC import quota under Category 1A was reduced to 5.2 million tonnes from 7.7 million tonnes; CRC under Category 2 fell to 1.5 million tonnes from 3.9 million tonnes; and coated coil quotas under Category 4A fell to 1.6 million tonnes from 2.4 million tonnes.

One of the European importers noted that he expects the major effect on prices to be felt in CRC segment due to significant quota reduction and insufficient capacities within Europe.

Under those conditions, market participants on both sides paused to digest the new information.

The number of new import offers as well as inquiries was close to zero.

“We are not interested in new import activity now as we are trying to save the company from the cargo on water,” one trader said.

“To be honest, we are trying to sort issues we have after country-quotas announcement and new offers are not my first topic these days,” another European buyer said.

Some recent HRC offers to Southern Europe were heard at €580-610 ($660-694) per tonne CFR from Turkey. Indian offers were heard at the equivalent of €570-585 per tonne CFR, while Vietnamese material was offered at €570 per tonne CFR.

As a result, Fastmarkets weekly price assessment for steel hot-rolled coil import, cfr main port Southern Europe widened to €570-610 per tonne on July 1 versus €595-600 per tonne on June 24.

The corresponding assessment for steel hot-rolled coil import, cfr main port Northern Europe remained stable week on week at €530-600 per tonne on Wednesday due to the lack of input.

The European domestic HRC market also went quiet, with sellers taking a wait-and-see stance before announcing new offers.

Fastmarkets daily steel hot-rolled coil index domestic, exw Northern Europe was €681.88 per tonne on July 1, down by €1.25 per tonne day on day.

The index was down by €2.29 per tonne week on week and by €8.12 per tonne month on month.

And steel hot-rolled coil index domestic, exw Italy remained unchanged day on day at €667.50 per tonne on July 1.

The index was down by €1 per tonne week on week and by €10 per tonne month on month.

Market participants broadly expect prices to increase across flat steel segment. However, HRC buyers do not anticipate any dramatic short-term price movements, given the persistently weak demand and the approaching holiday season, which is expected to further dampen market activity.