Year: 2026

The European Commission has announced that it has approved a €3.8 billion state aid scheme for Germany aimed at supporting energy-intensive industries through temporary electricity price relief.

The measures fall under the Clean Industrial Deal State Aid Framework and are designed to address rising energy costs while supporting decarbonization.

Focus on competitiveness and carbon transition

The scheme targets industries exposed to international competition and at risk of relocation due to high electricity prices.

In addition to providing cost relief, beneficiary companies are required to reinvest a significant portion of the aid into climate-friendly technologies such as electrification and energy efficiency improvements.

The support program will run from January 2026 to December 2028. Companies will apply for compensation annually, based on actual electricity consumption and wholesale price levels.

The European Commission stated that the scheme is necessary, appropriate, and proportionate, as it addresses both competitiveness concerns and climate objectives. By combining cost relief with mandatory green investment, the framework aims to strengthen industrial resilience while advancing the transition toward net-zero emissions.

Steel sector raises concerns over effectiveness

Following the approval, German Steel Federation (WV Stahl) CEO Kerstin Maria Rippel stated that while the decision is a positive step, the framework’s current design limits its effectiveness for energy-intensive sectors such as steel.

According to Rippel, the mechanism applies only to a portion of electricity consumption and cannot be combined with existing carbon electricity price compensation schemes.

Calls for more flexible state aid rules

Industry stakeholders have called for adjustments to EU state aid rules, particularly under the proposed Temporary Iran Crisis Energy Framework, which is expected to provide greater flexibility. The German steel sector has urged the government to actively support these changes at the EU level.

In this context, WV Stahl continues to advocate for a reliable electricity price of €50/MWh, including all associated costs such as network charges, taxes, and levies. Such a benchmark is seen as critical to maintaining international competitiveness while enabling the transition toward climate-neutral steel production.

European carbon prices traded under the ETS scheme are expected to quickly rise to up to €185/tonne ($218/t) in 2035, according to BloombergNEF estimates.

As allowances are reduced, the EU ETS price is set to increase from €75/t in the first quarter to an average of €86/t for full-year 2026 and €142/t in 2031, BloombergNEF analysts said in a webinar on Thursday attended by Kallanish.

Brussels must tighten the number of emissions allowances available in the bloc’s carbon market to see meaningful emission reductions in hard-to-abate industries, suggested Allen Abraham, head of sustainable materials at BNEF.

“The EU is trying to reduce the amount of free allocated emission allowances to various sectors, especially those covered by CBAM today, like steel, cement and aluminium,” he explained. “And that means the carbon exposure for these CBAM-covered goods is going to increase substantially, and the carbon prices in the EU ETS are also expected to rise substantially this year.”

Iron and steel accounted for 70% of the imported goods covered by the Carbon Border Adjustment Mechanism (CBAM) in 2024, by volume and value, BNEF estimates. The largest exporters of CBAM-covered iron and steel were mainland China, Turkey, India and the UK.

While clarity is still needed on calculating costs, Abraham warned that the default values proposed by the European Commission could distort competitiveness between markets. That is because these default emissions obligations are set at conservative levels, and in certain cases, much higher than actual emissions, noted Brynne Merkley, European energy transitions associate at BNEF.

The move is intended to force companies to verify the embedded emissions of the goods with EU-accredited institutions. The analysts said the default values are “highly punitive for most products”.

For hot-rolled steel imports, for example, BNEF projects a default CBAM cost increase of nearly 30% for mainland Chinese material and 33% for Russian material. India could see an increased cost of 45%, while Canada and Brazil benefit from low costs and increases of around 4% and 6%, respectively. Imports from South Korea, Turkey and Ukraine could see rises of up to 20%.

“The default obligation can quickly rise close to as high as €500/t by 2030, so that is as high as the cost of the product itself, in some cases now,” commented Abraham. “So, verifying your actual emissions, declaring them and then getting them approved by bodies that are already acknowledged by the EU is extremely important to ensure that companies can remain competitive in the European market.”

Author: Gabriela Farhangi 

kallanish.com

Processing industry sounds alarm
On April 14, EUROMETAL, the European Federation of steel distributors, traders and service centres, launched a “call to action to safeguard the European steel and metals industry,” already supported by more than 360 signatories across the entire steel and metals sector, including national federations, distributors and steelmakers.

During the press conference, attended by Fastmarkets, EUROMETAL outlined key demands to safeguard the industry, warning of accelerating deindustrialization.
• Trade defense: Introduction of tariffs and quotas on steel derivatives to align with US and Canadian measures and to counter unfair imports.
• Carbon Border Adjustment Mechanism (CBAM) expansion: A similar move for CBAM – extension of the mechanism to downstream products to prevent carbon leakage and relocation.
• ”Made in EU” rules: Priority for EU-produced goods in public procurement and funding, to support domestic industry.
• Cost relief: Reduction of industrial power prices to 5 cents per kWh, revision of the EU’s Emissions Trading System rules, and cuts to the regulatory burden.

The need to act quickly was highlighted by Alexander Julius, president of EUROMETAL; Marcus Fix, managing director of service centre DM-Stahl; Heino Buddenberg, chief executive officer of Waelzholz, a global manufacturer of high-quality cold-rolled steel strip and shaped wire; and Georgios Giovanakis, chief sales officer at steelmaker Thyssenkrupp.

They said that a “Trumpish” approach should be used, to include steel derivatives in the scope of a new trade regime from July 1.

“Europe is at risk of losing steel processing and steel-based manufacturing,” Julius said. “This will put Europe into new dependencies on critical components, weakening its economic resilience further.”

Stakeholders argued that, in an increasingly volatile geopolitical environment, the EU’s regulatory pace was struggling to keep up with the more rapid, interventionist approaches seen in other major economies, particularly the US.

“We’re in the first line after steel manufacturing, producing precision sheet in Germany, Brazil and China, and we see that Europe is more or less getting out of the business, because our customer base is melting like butter in the sun,” Buddenberg said.

“Europe started with a CBAM mechanism and with a safeguards mechanism to protect the first line of the value chain,” he added, “but that just increases the speed of diminishing the manufacturing industry as their competitive point.

“The protection mechanism generates inflation at this first level… It’s very easy to import 100% Chinese-made motors and converters, and components that are totally outside any protection [measures], and that will lead to all the major OEMs [original equipment manufacturers] purchasing Chinese equipment because of market pressure,” he said.

Panel event participants agreed that the entire steel and metals value chain should be protected, otherwise it would “break at the weakest part.” In other words, there was little value in protecting an industry that would end up without customers.

Therefore, enabling faster policy responses and reducing the administrative burden on industry would be key in the safeguarding of the industry.

The European Commission was considering a major expansion of CBAM, but the newly covered sectors would be included only from January 1, 2028, Fastmarkets understands, subject to final adoption of the addition.

The year 2028 was considered “too late” and panellists once again warned about the leakage of high-value-added production outside the over-regulated European market.

EUROMETAL called on national and European policymakers to recognize the urgency of the situation and to take the necessary steps to secure the future of the European steel and metals industry.

European steel market pauses
Flat steel
Despite earlier expectations of a gradual price rebound during the time of the fair, trading remained quiet.

“The market is in a holding pattern and waiting for clarity on import quotas,” a buyer in Germany said.

In late March and early April, flat steel producers indicated preliminary offers for July-delivery hot-rolled coil in Northern Europe around €750-780 ($885-920) per tonne ex-works.

But buyer sources confirmed during the fair that such prices were still “wishful thinking” despite import constraints and production issues at some European suppliers.

“There is no shortage [of HRC], and a lot of import material was booked early to secure availability ahead of the new trade regime,” a second buyer said. “The level of stock across the entire supply chain is quite high.”

A large European steelmaker sold a significant tonnage of HRC, cold-rolled coil and hot-dipped galvanized coil for second-quarter delivery to several steel service centers (SSCs). The total volume was about 50,000 tonnes, with HRC accounting for about half of that.

The HRC price was reported around €680 per tonne ex-works, CRC at €790 per tonne ex-works and HDG at €800 per tonne ex-works.

Trade sources said that SSCs were looking to replace flat steel volumes due to technical issues at a Benelux-based integrated mill, which has been unable to deliver some orders.

Achievable prices for HRC were indicated at €700-720 per tonne ex-works during the fair – still far below mills’ target levels.

Fastmarkets’ daily steel hot-rolled coil index, domestic, exw Northern Europe, was €709.48 ($836.71) per tonne on April 16, down by €9.48 per tonne from €718.96 per tonne on April 15.

The index was also down by €10.52 per tonne week on week but up by €3.85 per tonne month on month.

Market participants told Fastmarkets that buyers were mostly holding back, awaiting more clarity on country-specific quota allocations before committing to purchases.

Earlier this week, the European Council and European Parliament reached a provisional agreement on a new trade regime. A new tariff-rate quota (TRQ) system was set to replace the existing steel safeguard measures starting from July 1.

This will cut the overall volume of steel import quotas by approximately 47% compared with the 2024 safeguard quotas (18.3 million tonnes of import volumes per year), and will increase the out-of-quota duty to 50% from the current 25%.

Country-specific TRQ volumes for the new trade regime were expected to be revealed in late April or early May, market sources said.

Several insiders told Fastmarkets that they expected leading European suppliers to come back with firm offers for third-quarter delivery coil once the country-specific TRQ volumes were revealed.

“Demand will not recover substantially this year,” a steel service centre told Fastmarkets. “All this push for higher prices is driven by trade defense measures.”

Long steel
Meanwhile, long steel producers were also pushing for substantial price rises across Europe amid rising costs and tightening import activity, but regional acceptance was uneven.

Seasonal improvement in construction activity was providing support to European long steel producers. Market participants from Germany and Italy reported notably better demand compared with the winter months, but in France and Poland the demand was still said to leave much to be desired.

The fact that construction planning is more long-term than in the automotive sector also makes long steel market less exposed to unstable geopolitical situations compared with flat steel, which is widely used in the automotive industry.

Fastmarkets’ weekly price assessment for steel reinforcing bar (rebar), domestic, delivered Northern Europe, was €665-680 per tonne on April 15, up from €655-665 per tonne on April 8.

In Northern Europe, rebar offers reached €700 per tonne delivered versus €680 per tonne delivered last week, but saw only limited acceptance.

According to recent data, only buyers in Germany partially accepted the new price, while in France and Austria it was considered too high.

Italian suppliers also announced higher offers at €710-720 per tonne ex-works for the North of the country and €740-750 per tonne ex-works for the South.

These higher prices, however, have not been achieved in deals, with customers postponing the booking of new volumes while seeking more clarity on the situation.

As a result, Fastmarkets’ weekly price assessment for steel reinforcing bar (rebar), domestic, exw Italy, widened upward slightly to €670-710 per tonne ex-works on April 15, compared with €670-700 per tonne on April 8, reflecting tradeable values reported by industry sources.

Another supportive factor came from the policy side, where tighter trade controls were reinforcing the upward pressure on domestic prices.

On April 10, the European Commission reinforced steel safeguarding measures on steel rebar and merchant bar, closing a loophole that allowed circumvention.

It had found that importers were exploiting a loophole in the steel safeguard system by slightly tweaking the chemical composition of rebar so it could be declared under a different product category (CN code 7228 30 69 ) that had more available quota, which allowed shipments to bypass the stricter limits meant for rebar.

The Commission did not change the quotas themselves but instead introduced more precise product classification codes (TARIC codes) to clearly separate rebar from similar products, effectively shutting down this workaround and forcing those imports back under the correct, tighter quota regime, restoring the intended protection for EU producers.

Notably, codes 7228 30 69 11 (ribbed or deformed reinforcing steel) and 7228 30 69 99 (other) were added.

The regulation came into force on April 10 this year and will apply to the new safeguard regime starting on July 1.

Italian-headquartered Marcegaglia has signed a Eur450 million equipment supply agreement with steel plant making company Danieli for the new steelmaking and flat rolling facility in Fos sur Mer, France, as the Italian steel processor seeks to secure upstream supply and cut carbon emissions through scrap-based production.

The Mistral Project, with total capital expenditure of around Eur1 billion, will produce more than 2 million metric tons/year of liquid steel and up to 3 million mt/year of stainless and carbon steel hot rolled coils once operational, the companies said April 14. The facility will cover about 35% of Marcegaglia Group’s total coil and slab demand, primarily supplying the company’s Italian downstream facilities.

The investment represents Marcegaglia’s largest upstream integration project and reflects growing pressure on European steelmakers to reduce emissions while maintaining competitive supply chains. The plant will use scrap metal, low-carbon hot briquetted iron, and nuclear and renewable energy to achieve up to 80% lower greenhouse gas emissions compared to traditional blast furnace steelmaking methods, according to the companies.

The facility will feature an electric arc furnace with the latest-generation technology, a single-strand continuous slab caster producing thick slabs, and a conventional hot strip mill designed to process different charging mixes across a wide range of flat steel grades. The final investment decision is expected by the end of 2026, pending completion of permitting processes and negotiations with French institutions, which the companies described as being in advanced stages.

Platts, part of S&P Global Energy, assessed Northwest European hot-rolled coil carbon-accounted at Eur775/mt ex-works Ruhr April 15, stable day over day.

Author: Annalisa Villa

spglobal.com

The UK automotive industry is pressing the European Union to amend its proposed Industrial Accelerator Act to preserve an Eur80 billion ($94 billion) annual trade partnership that has flourished despite Brexit.

The Society of Motor Manufacturers and Traders said excluding British-built vehicles from the EU’s “Made in Europe” policy would harm manufacturers on both sides of the English Channel, disrupting supply chains and undermining the bloc’s industrial competitiveness goals. The lobby group made the appeal during meetings with EU representatives in Brussels this week.

The UK remains the EU’s largest export market for passenger cars, with trade worth Eur39.7 billion annually to European manufacturers. The EU also sells Eur9.1 billion of automotive components to Britain each year — more than to the US or China, according to SMMT data.

“The value of UK trade to the EU underlines why excluding the UK industry from the proposed Industrial Accelerator Act’s (IAA) ‘Made in Europe’ policy would inflict significant harm on both sides of the Channel, reducing output and supply chain demand, with consequences for consumer choice and affordability,” Mike Hawes, SMMT chief executive said April 17.

Under current IAA proposals, UK automotive products would be excluded from incentives linked to corporate fleet greening programs, which account for around 60% of the EU’s new car market. The policy also affects CO2 super credits that provide financial support for companies adopting zero-emission vehicles.

SMMT said preventing UK access to these incentives would reduce production volumes, constraining EU supply chain demand and leading to reduced consumer choice and higher prices. The organization warned the move would damage battery electric vehicle trade at a critical stage in Europe’s transition to cleaner mobility.

EU-UK trade in BEVs has increased tenfold since 2019, with 61.6% of electric cars sold in Britain imported from EU plants. EU-built BEVs account for nine in 10 models eligible for the UK’s Electric Car Grant, SMMT said.

The UK government this week published final details of the British Industry Competitiveness Scheme, BICS, designed to reduce industrial energy costs that rank among Europe’s highest. SMMT said the measure marked a significant step toward supporting the manufacturing supply chain.

Britain’s heavy goods vehicle market contracted 2.7% in the first quarter amid challenging economic conditions, while bus and coach demand fell by a third following two years of growth. Zero-emission vehicle adoption in the HGV sector declined to a 0.9% market share from 1.4% a year earlier, despite manufacturers offering more than 40 battery-electric models.

SMMT said operator confidence in zero-emission trucks depended on infrastructure development, requiring cross-sector collaboration.

The upcoming UK-EU bilateral summit this summer represents a critical opportunity to ensure British-built vehicles and components are considered equivalent to EU content under the IAA, SMMT said.

Author: Annalisa Villa

spglobal.com

Swedish steelmaker SSAB’s subsidiary Tibnor has received competition authority approval for its Eur40 million acquisition of Ovako Metals Oy Ab, the Finnish distribution arm of European steelmaker Ovako, clearing the way for completion of a deal that will strengthen Tibnor’s position in Finland’s engineering steel market.

The transaction, first announced in December 2025, is expected to close in the coming weeks, SSAB said April 17. The acquisition will expand Tibnor’s footprint in a market where engineering steels serve manufacturing, process and construction sectors.

The deal reflects ongoing consolidation among Nordic steel distributors as companies seek scale advantages in a region where steel consumption patterns are shifting toward higher-value specialty products. Tibnor will absorb Ovako Metals’ product portfolio, logistics and warehousing activities, processing services and local sales organizations in Finland.

“Ovako Metals’ strong position in Finland and its recognized expertise in engineering steels and value-added services fit perfectly with our strategy,” Fredrik Haglund, Tibnor’s president and chief executive, said in a statement.

“This is a positive next step for our customers in Finland,” said Marcus Hedblom, President and CEO of Ovako in a separate statement. “Through Tibnor, customers will benefit from a strengthened distribution setup with greater scale, an expanded product range and strong local presence. We are confident that this will create long term benefits and continue to deliver great value to our customers.”

The divestment is in line with Ovako’s strategy to focus on its core business as a leading producer of engineering steel, while ensuring that distribution activities in Finland continue to develop under an owner with distribution as its core competence, the company said.

The acquisition gives Tibnor access to Ovako Metals’ established customer relationships in Finland’s engineering sector, where demand for specialized steel grades used in machinery, equipment manufacturing and industrial applications has remained relatively stable despite broader economic headwinds affecting European steel markets.

Engineering steels typically command premium pricing compared with commodity-grade products, offering distributors higher margins on value-added processing and technical services.

Tibnor operates as a subsidiary of SSAB, the Swedish steelmaker that runs mills in Sweden, Finland and the United States and is a steel and metals distributor in the Nordic and Baltic regions.

Platts, part of S&P Global Energy, assessed Northwest European hot-rolled coil carbon-accounted at Eur775/mt ex-works Ruhr on April 16, stable day over day.

Author: Annalisa Villa

spglobal.com

The German Steel Federation (WV Stahl) has stated that it has welcomed the agreement between EU institutions on a new, significantly strengthened trade defense instrument for steel imports, describing it as a key step to protect the German and European steel industry.

The Council of the European Union and the European Parliament reached a provisional agreement on new measures aimed at protecting the EU steel industry from global overcapacity and rising import pressure, as SteelOrbis previously reported.

New system to strengthen protection against import pressure

According to the association, the new instrument will introduce country- and product-specific tariff-rate quotas with clearly defined ceilings. Once these limits are exceeded, a 50 percent import tariff will apply.

Kerstin Maria Rippel, managing director of the WV Stahl, stated that the agreement sends a strong signal to protect the steel sector from the effects of global overcapacity while maintaining market openness.

The new framework is expected to address key weaknesses of the previous system by increasing flexibility and responsiveness to market developments. It will also include new rules on determining the origin of goods to prevent circumvention practices, such as rerouting steel through third countries to bypass trade measures.

Industry calls for further measures

While welcoming the agreement, the WV Stahl stressed that additional steps are needed to address the ongoing crisis in the sector.

These include closing gaps in the Carbon Border Adjustment Mechanism, creating lead markets for low-emission steel produced in the EU, and ensuring competitive energy prices for energy-intensive industries.

The International Monetary Fund (IMF) has revised its global growth outlook forecast for 2026 and 2027 in its April 2026 World Economic Outlook report, projecting global growth at 3.1 percent in 2026, down from previous expectations, before a modest recovery to 3.2 percent in 2027. The revision reflects increasing uncertainty driven by the Middle East conflict, alongside ongoing trade tensions and financial market volatility.

Global headline inflation is expected to increase slightly in 2026, largely due to rising energy costs, before declining again in 2027. The combined effect of slower growth and higher inflation is expected to weigh more heavily on emerging and developing economies, where external vulnerabilities remain elevated.

Risks tilt toward lower growth and higher inflation

The IMF noted that the balance of risks has shifted, with downside risks to growth and upside risks to inflation becoming more pronounced. Adverse scenarios involving weaker growth and higher inflation are now more likely compared to earlier forecasts.

Global trade is expected to weaken in the near term due to geopolitical tensions, rising trade barriers, and ongoing supply chain disruptions. Trade fragmentation and tariff increases are identified as key risks that could further dampen economic activity and reduce long-term output.

Advanced economies face uneven recovery

In the United States, growth is projected at 2.3 percent in 2026 and 2.1 percent in 2027, supported by domestic demand and fiscal measures, though trade barriers continue to weigh on activity.

In the euro area, growth is expected to remain subdued at 0.9 percent in 2026 and one percent in 2027, reflecting weak industrial output and sensitivity to energy prices.

The United Kingdom is projected to see growth slow to 0.8 percent in 2026 before recovering to 1.3 percent in 2027. The report attributes the 2026 slowdown to the war and a slower pace of monetary easing, while the 2027 recovery remains slower than expected before the war because the effects of higher energy prices persist.

For Japan, the IMF stated that growth is foreseen at 1.2 percent in 2026, and 1.2 percent in 2027. Japan benefits from stronger growth momentum and offsetting government measures, which help moderate the impact of the Middle East conflict relative to other advanced economies.

Emerging markets show mixed outlook

China’s growth is forecast at 4.4 percent in 2026 and four percent in 2027, supported by policy stimulus but constrained by structural challenges. The 2026 forecast is revised upward relative to October because lower US effective tariff rates on Chinese goods and stimulus measures offset the negative effects of the Middle East conflict. The slowdown in 2027 is attributed to structural headwinds, including a prolonged housing slowdown, a declining labor force, diminishing returns on investment, and weaker productivity growth.

India remains one of the fastest-growing major economies, with growth projected at 6.5 percent in both 2026 and 2027. For 2026, growth is revised upward moderately by 0.3 percentage point, led by positive contributions from the carryover of the strong 2025 outturn and the decline in additional US tariffs on Indian goods from 50 to 10 percent, which outweigh the adverse impact of the Middle East conflict.

Turkey’s growth forecast has been revised downward by 0.8 percentage point to 3.4 percent in 2026, as 2025 growth was weaker than expected and higher oil and gas prices weigh on activity. The IMF’s growth forecast for 2027 has been cut to 3.5 percent from 4.1 percent previously.

Structural risks and global imbalances

Energy prices are expected to rise in the near term due to geopolitical disruptions, contributing to inflation and affecting trade balances. Global financial conditions remain tight, with high interest rates weighing on investment and credit growth, particularly in emerging markets.

Debt vulnerabilities remain elevated, especially in low-income countries, where refinancing risks are significant. Trade tensions and tariff increases continue to pose risks to global output, while persistent current account imbalances reflect underlying structural differences across economies.