Year: 2026

The European Commission has announced that it has approved a €78 million Slovenian support scheme designed to partially compensate energy-intensive companies for higher electricity costs arising from carbon pricing under the EU Emissions Trading System (ETS).

The measure specifically addresses indirect emission costs, which occur when carbon prices increase wholesale electricity prices.

Steel and other energy-intensive sectors eligible

The scheme applies to companies operating in sectors that are both highly energy-intensive and exposed to international competition. Eligible industries include iron and steel, aluminum and other metals, paper and chemicals.

The support will cover up to 75 percent of indirect emission costs incurred between 2025 and 2027. Payments will be made in the following year, with the final disbursement scheduled for 2028 to compensate costs incurred in 2027.

Efficiency benchmarks and carbon-free power requirement

To encourage energy efficiency, the aid calculation will be based on electricity consumption benchmarks that reward the most efficient production processes.

Companies seeking compensation must demonstrate that at least 30 percent of their electricity consumption is sourced from carbon-free energy. Furthermore, beneficiaries will be required to reinvest the aid in climate protection measures within two years of receiving the final payment.

The Commission concluded that the measure is necessary, appropriate and proportionate to mitigate the risk of carbon leakage and relocation of energy-intensive production to jurisdictions with less stringent climate policies, which could otherwise result in higher global greenhouse gas emissions.

Author: SteelOrbis Editorial Team

steelorbis.com

The European Commission has announced that it has approved a €1.1 billion French state aid scheme aimed at supporting strategic investments in clean technology manufacturing capacity in line with the EU’s Clean Industrial Deal objectives.

The measure was assessed and cleared under the Clean Industrial Deal State Aid Framework (CISAF), adopted on June 25, 2025. It represents the eighth cleantech manufacturing scheme approved under CISAF, bringing the total authorized support volume to more than €10 billion.

Focus on solar, wind, batteries and heat pumps

Under the scheme, France will provide support for investments expanding domestic manufacturing capacity for net-zero technologies listed in Annex II of CISAF.

Eligible technologies include solar panels, offshore and onshore wind technologies, heat pumps and battery technologies. The measure also covers key components of these systems as well as associated critical raw materials.

Aid will be granted in the form of tax credits and will be available throughout the entire French territory. The scheme will remain open until December 31, 2028.

 

European hot-rolled coil prices continued climbing on Tuesday March 3, on an uptick in restocking activity, uncertainty around new imports in relation to existing trade policies and concerns over the escalating conflict in the Middle East, sources told Fastmarkets.

In Germany, several buyer sources reported transactions for HRC with May lead times being done at €700-705 ($821-827) per tonne ex-works, with two managing to “cross the €700 per tonne ex-works line” in recent transactions.

Buyer and seller estimates of achievable prices came in at between €670 per tonne and €700 per tonne ex-works on Tuesday.

Fastmarkets’ daily steel hot-rolled coil index domestic, exw Northern Europe was €694.31 per tonne on Tuesday, up by €1.81 per tonne from €692.50 on Monday March 2.

The index was up by €12.43 per tonne week on week and by €43.24 per tonne month on month.

“Buyers come back for tonnages, even if they have stock – there are concerns that delaying purchases [of HRC] will cost you more,” a buyer source said.

Another transaction was reported by steel-service center at around €680 per tonne ex-works, for a major tonnage of May delivery coil.

Sources also said that the escalating crisis in the Middle East – after the attack by the US and Israel on Iran and it’s region-wide response – has already led to sharp energy price spikes in Europe.

“Electricity prices in Europe are directly linked to gas prices, so with gas prices spiking 30-40% [day on day on March 2] and potentially more on major supply outages, we could have a repeat of the 2022 scenario,” a second buyer said.

A third buyer said: “Energy costs create a massive jump in steel production costs, [so], I guess, European mills withdraw their offers and push for higher prices.”

But any energy price spikes will be more “painful” for electricity intensive electric-arc furnace (EAF) producers than for traditional blast furnace and basic oxygen furnace (BF-BOF) mills. And flat steel products in Europe are predominantly produced via the BF-BOF route.

Electricity accounts for less than 4% of BF-BOF costs, while for EAF mills, electricity can be around 20% of the total, according to sources.

Offers from integrated  HRC producers in the region were earlier heard at €700-720 per tonne delivered (around €680-705 per tonne ex-works), with limited room for discounts and most sellers claimed to be largely sold out of April-delivery coil.

And because these higher levels have gradually been achieved in recent transactions, sources said a new round of prices increase announcements was highly likely.

But, at the same time, market participants noted that end-user demand for steel remains weak.

“The recent price rally reminds me of 2022, when we had sharp [flat steel] price spikes on panic buying, followed by sharp and painful prices declines,” a fourth source told Fastmarkets.

“We don’t see any signs of improving demand from end users in the mid-term, so my concern is that the current uptrend is a bubble,” the source added.

In the secondary market in the week commencing February 23, some steel service centers were still selling 4 mm HR sheet aggressively at around €730-740 per tonne CPT, using old HRC feedstock for production that was purchased at lower prices. New offers, however, were heard at prices closer to €800 per tonne CPT, to reflect the higher feedstock costs, Fastmarkets understands.

In Southern Europe, meanwhile, Fastmarkets’ corresponding daily steel hot-rolled coil index, domestic, exw Italy, was calculated at €680.00 per tonne on Tuesday, up by €3.75 from €676.25 per tonne on Monday.

The index was up by €13.75 per tonne week on week and by €33.00 per tonne month on month.

In Italy, offers of May-delivery HRC were reported at around €700 per tonne ex-works from integrated suppliers and re-rollers.

But sources said that some local suppliers still had April-delivery coil available and workable prices continued to be reported at €675-685 per tonne ex-works, while there was one transaction at €680 per tonne ex-works, according to sources.

In terms of imports, however, new offers were scarce, sources said – mainly due to new safeguard regime concerns.

Most second-quarter shipment volumes from Turkey, Saudi Arabia and North Africa have reportedly already been secured by traders, who are now seeking to resell the material to mid-sized buyers at €640-650 per tonne DDP or higher, including Carbon Border Adjustment Mechanism (CBAM) costs.

At the same time, several trading sources said that DDP, CBAM-accounted offers were getting more scarce due to uncertainty over country-specific quotas and CBAM costs.

One Turkish seller sold a 50,000-tonne cargo of HRC to Spain and Italy at $590 per tonne FOB, sources said, which roughly corresponds to €545 per tonne CFR, including the anti-dumping duty. The lead time was reported as June.

HRC offers to Anwerp from Turkey were heard at €550-555 per tonne CFR, sources said, for end-June delivery.

In comparison, in early February Turkey concluded a deal for a sizable quanity of HRC to Europe at around €515–520 per tonne CFR.

Market participants also reported new offers from India at around €520-525 per tonne CFR to the Mediterranean.

 

Germany’s Leipzig-based ONTRAS Gastransport GmbH has commissioned two pipeline companies within the Salzgitter Group with significant pipe supply contracts.

Accordingly, Mannesmann Grossrohr GmbH (MGR) will supply 70.6 km of pipes (approximately 18,000 tons), while Mannesmann Line Pipe GmbH (MLP) will provide 38.2 km of pipes (approximately 6,000 tons). These pipes will be used for the new FGL 702 hydrogen pipeline project, extending from Wefensleben to Salzgitter and from Angersdorf to Preußlitz. The project represents a key building block for the hydrogen backbone network and energy transition, forming the foundation for “green steel” production in Salzgitter.

The integrated steel plant in Salzgitter is gradually transitioning to low-CO2 steel production under the SALCOS® (Salzgitter Low CO2 Steelmaking) transformation program. Hydrogen is becoming an increasingly critical resource for producing “green steel.” Andreas Betzler, CEO of the Salzgitter Group’s pipeline companies, stated: “We are proud that hydrogen for SALCOS® will flow through our pipes and that we are part of this important project. Salzgitter is not only a major hydrogen consumer but also contributes to hydrogen production and delivery to customers with our steel products.”

The 813 mm-diameter pipes supplied by MGR will feature a three-layer polyethylene coating on the exterior and an epoxy Flowcoat lining on the interior. Approximately 4.5 km of the pipeline will receive additional GFRP (glass fiber reinforced plastic) coating applied by TDC specialists in Neubrandenburg. Each 18-meter-long pipe weighs around 4.5 tons and will be transported by truck from February 2027 to storage sites located an average of 37 km from the pipe plant.

The 610 mm-diameter pipes provided by MLP have been prepared at the Hamm facility with both three-layer polyethylene exterior coating and Flowcoat interior lining. These coatings are designed to reduce friction losses during gas flow. Approximately 6 km of the pipeline will also include a GFRP component applied by TDC, further enhancing pipeline durability.

The FGL 702 project, part of the IPCEI Green Octopus Central Germany (GO) initiative, aims to strengthen Germany’s hydrogen infrastructure and support the energy transition.

The escalating military tensions between Iran, the United States, and Israel, along with the closure of the Strait of Hormuz, have begun to directly impact the iron and steel sector through rising energy and logistics costs.

The upward expectations in oil and natural gas prices pose a risk of increasing production costs, while disruptions in maritime transportation are pushing freight rates higher and extending delivery times. According to experts, if tensions persist, supply constraints in the sector, difficulties in sourcing raw materials, and increases in finished product prices could become inevitable.

The escalating military tensions between Iran, the United States, and Israel, along with the de facto transit restrictions in the Strait of Hormuz, have triggered a new fracture in global energy and logistics chains. Rising risks around the Strait of Hormuz, through which approximately 20% of global oil trade passes, have led to renewed upward pricing in energy markets and serious disruptions in maritime transport, bringing cost and supply pressures to the forefront of the iron and steel sector.

The Russia–Iran axis and the energy impact

According to market sources, Iran is one of Russia’s key trading partners, with bilateral trade volume of approximately $5 billion. Fertilizers, grain, industrial equipment, and steel pipes stand out among the main trade items between the two countries, while contacts in the energy field are also ongoing. It is noted that in the event of supply disruptions in oil exports from Iran, Qatar, and Kuwait, crude prices could rise to the $100 per barrel level. Such a scenario could accelerate the redirection of Russian oil toward markets such as China, India, and Türkiye. Any potential increase in energy prices is expected to directly affect iron and steel production costs through higher natural gas and electricity prices.

Experts emphasize that energy costs remain particularly decisive for facilities operating with electric arc furnaces (EAF). If tensions in the Strait of Hormuz persist, sustained high energy prices could push per-ton steel production costs higher.

Logistics tightening and freight pressure

On the maritime side, the situation appears even more complex. Due to security risks in and around the Strait of Hormuz, many shipowners have either suspended voyages or been forced to shift to longer and more costly routes. For steel, a high-tonnage product highly sensitive to freight costs, this development directly affects prices. Rapid increases in freight rates and extended delivery times are being observed, while both buyers and sellers are reportedly reluctant to enter into new contracts amid uncertainty, leading to a short-term contraction in transaction volumes.

Türkiye’s steel industry is known to focus on Europe, the Balkans, and neighboring markets in an effort to balance global volatility. However, disruptions in sea routes and rising insurance premiums may also increase the cost of accessing these markets.

The İskenderun corridor and geopolitical risk perception

Industry representatives note that the growing perception of geopolitical risk in the Eastern Mediterranean is being closely monitored, particularly for the Hatay–Osmaniye–İskenderun production corridor, which serves as Türkiye’s key iron and steel manufacturing hub. The İskenderun-centered production region accounts for a significant share of Türkiye’s steel exports thanks to its port infrastructure and integrated facilities. An increase in regional security risks may affect the sector not through direct physical threats, but via higher insurance costs, tighter financing conditions, and shifts in order behavior.

Risk of supply constraints and price increases

According to expert assessments, if current tensions do not ease in the near term, three main factors will come to the forefront in the iron and steel sector: rising energy costs, risks of disruptions in raw material and semi-finished product supply, and freight-driven price pressure. The combination of these three elements could create supply constraints, particularly for inputs such as scrap and slab, and lead to upward movement in finished product prices.

In the short term, contracting transaction volumes and cautious contract behavior are expected to dominate. In the medium to long term, the duration of the conflict will be decisive. If the closure of the Strait of Hormuz becomes prolonged, cost-based price increases in the iron and steel market are likely to become more pronounced. Conversely, under a diplomatic de-escalation scenario, normalization in freight and energy prices could allow the sector to seek a new equilibrium.

UK producer 7 Steel is calling for policy support for the sector, days after Eluned Morgan, First Minister of the Welsh Government, met with UK policymakers, Kallanish reports.

In a published statement, the company welcomes the Welsh government’s call for urgent action to support domestic steelmaking. It notes that domestic steelmakers “continue to face global overcapacity, volatile trading conditions, and significantly higher industrial electricity costs.”

“To secure long-term competitiveness, we need continued trade protection and greater stability in energy pricing, alongside clear commitments in the forthcoming UK Steel Strategy,” it adds. “That means prioritising trade protection beyond June of this year and providing stability in energy pricing to give domestic steelmakers the protection and support needed for long-term security. These are things we are hopeful of seeing in the highly anticipated UK Steel Strategy.”

Chief executive Carles Rovira says: “We’re pleased to see the First Minister of the Llywodraeth Cymru/Welsh Government championing our industry, particularly at such a critical time for all steelmakers. The call for greater certainty, support and clarity is precisely what we need, both to protect our industry as it stands today, but also to strengthen it for the future through continued investment in our processes and communities.”

Earlier last week, Morgan noted in a written statement that the UK Steel Strategy is now likely due to be published in March. “The Welsh Government is calling for the strategy to be afforded the absolute top priority that it deserves, and that publication is made as a matter of utmost urgency. Industry needs clarity, and our steel workforce needs transparency and confidence.”

She also called for the UK government to work with the EU and US to conclude trade agreements with “our major partners” to protect the domestic industry against “potential dumping”.

“EU trade measures have the potential to have drastic consequences for the Welsh steel sector at a time when it is already under immense trading pressure due to US tariffs and global overcapacity. The EU is our closest and strongest trading partner on steel, and we have been very clear with the UK Government that we urgently need to see it make a strong case for the EU to preserve our existing arrangements, especially at a time when our sector is transitioning to net zero,” she says.

“We need the UK government to agree and implement the tariff free quota for UK steel into the US as agreed under the UK-US economic prosperity deal, whilst considering the unique transitioning needs of the Welsh steel sector,” she adds.

 

Thyssenkrupp Steel is to start supplying its bluemint CO2-reduced recycled steel to BMW Group during 2026 for use in series production, in particular for the outer panels, interior parts and battery housing of the BMW iX3, Kallanish hears.

The material has a high proportion of recycled material and achieves CO2 savings verified by TÜV Süd compared to conventional steel, the steelmaker says. This is a mass balanced recycled product, involving a mathematical allocation procedure using CO2 reductions from its production process which can be attributed to products on a pro rata basis, the company explains.

BMW Group will use the steel in series production without having to adapt existing processes, tk notes.

The German automotive industry uses almost exclusively primary steel extracted from iron ore for the outer body shell for the highest requirements in terms of surface quality, formability, and processing. This reduced emissions steel can meet these quality requirements and can be used for outer panels, the steelmaker adds.

 

Italian heavy plate prices are steady compared to the beginning of February, following a further increase implemented by local producers due to higher imported slab costs linked to CBAM, Kallanish learns.

Market activity has become quiet over the past days as buyers are adopting a wait-and-see attitude. Mills lead times are extending to mid-March and April, depending on producer.

Italian mills are currently quoting at around €750/tonne ($884.10/t) for S235 plate, with premiums of €30-35/t for S355 and approximately €10/t for S275 material. Grades S235 and S275 usually tend to see similar pricing levels.

Current transaction values for S275 material remain at €720/t ex-works on average and €740-750/t ex-works for S355.

Sellers believe values will continue to increase due to the high CBAM charges for slabs and increasing international values. A producer says it continues to procure slabs from Asia, including China and South Korea, focusing on suppliers with lower carbon footprints.

For material sourced from the least CO2 intensive producers, CBAM costs are estimated at around €40-50/t, while shipments from higher-emission mills could face charges of at least €100/t. Slab values, excluding CBAM costs, are reported at $530/t cfr on average, southern European ports.

Plate prices are expected to rise sharply in the second half of the year, when the revised safeguard mechanism comes into effect and significantly reduces available quotas.

A separate source notes that, out of a total European first-quarter quota of 544,000 tonnes, some 162,000t of imported plate has been cleared through customs between 1 January and 20 February.

 

Following a notable price surge successfully implemented by mills, the purchasing wave seen throughout February appears to have slowed somewhat.

Mills finally succeeded with an increase of up to €70/tonne ($83/t) to the value of €800/t for S355 delivered, which had previously been announced in January in vain. Meanwhile, the new price level has been accepted as imports are no longer seen as a realistic alternative, with incalculable CBAM fees likely absorbing the price advantage, German buyers note.

According to one buyer, plate distributors in Benelux are now bereft of their ideal supplier, given their proximity to the big ports, and have instead boosted their orders at European mills. This has helped to fill order books for delivery sooner than May. “The market has turned around quite a bit,” he says.

In fact, some mills are now eyeing €850/t as the next target. Another buyer sees the price accepted going forward amid a lack of alternative offers. “Imports are not an option, so we have fewer purchasing channels now,” he notes.

One mill source questions the possibility of achieving higher prices, and is sceptical if the recent rises are sustainable. He does confirm the price tag of €800/t, but also notes recent deals at €50/t less. He adds that the run on orders has already calmed down at the end of February.

He warns that the striving for another price step will be sure to have customers scared. “If I ask for €850/t, customers will hang up. That’s close to the distributors’ prices, so customers might as well buy there,” he tells Kallanish.

 

Yesterday, EUROMETAL had the pleasure of hosting in Luxembourg a delegation from Kawasaki Heavy Industries (KHI), accompanied by representatives from Deloitte Belgium’s Global Trade Advisory practice.

The discussion focused on the evolving implications of the EU Carbon Border Adjustment Mechanism (CBAM) for steel trade and on the broader decarbonisation challenges facing the international steel value chain.

Kawasaki Heavy Industries is currently assessing the potential role of advanced carbon capture technologies in supporting steel producers exporting to the European Union. As part of their market research, they sought high-level insights from EUROMETAL on CBAM readiness, cost exposure, emerging procurement trends, and the growing market interest in lower-carbon steel solutions.

The exchange was constructive and forward-looking. It highlighted how CBAM is increasingly shaping sourcing strategies, supplier engagement, and investment decisions well beyond Europe’s borders. It also underlined the importance of transparency, credible emissions accounting, and regulatory clarity in enabling a competitive and workable transition.

We appreciated the opportunity to share aggregated market observations from the European steel distribution sector and to better understand decarbonisation initiatives being considered in Asia.

Constructive dialogue across regions and across the value chain remains essential as the steel industry navigates one of the most profound transformations in its history.