Year: 2026

Italian long steel producer Duferco Group is boosting its logistics hub in Sicily by its plant in Giammoro, in the province of Messina.

Its subsidiary Duferco Terminal Mediterraneo has reached full capacity at the Giammoro terminal, boosting its role as a strategic intermodal platform for commercial and industrial flows in the Mediterranean.

Logistics services for Pittini Group remain a cornerstone of the terminal’s operations, with an average of 6,000 tonnes of steel products handled per vessel. The service is operated by NovaAlgoma Short Sea Carriers’ Sider Unicorn and covers the full logistics chain from sea transport to discharge, handling, storage and transfer to the terminal’s rail-connected warehouse, the company says in a note obtained by Kallanish.

The terminal’s rail interconnection also entered full operation in May, enabling the arrival and storage of a range of goods including steel beams, further reinforcing the site’s intermodal capabilities.

In May, the terminal handled its first call by the MV X-Press Sagarmala, launching a new weekly X-Press Feeders service linking Giammoro to Algeciras, Tanger Med and southern Italy.

In 2024, Duferco obtained the concession for the commercial exploitation of the port terminal, for which the firm submitted a development project to carry out naval and logistics services. This is part of the reconversion and diversification plan for the Giammoro steel facility, which Duferco is pursuing with a total investment of €95 million ($110m), backed by a SACE state guarantee (see Kallanish passim).

The Middle East conflict has knocked off 0.3 percentage points from the EU’s GDP growth in 2026, lifting business costs and effectively redirecting income out of the EU economy and into energy-exporting countries, the European Commission says. Business investment is set to be constrained by tighter financing conditions, lower profits and heightened uncertainty.

After reaching 1.5% in 2025, GDP growth in the EU is now projected to slow down to 1.1% in 2026, the Commission says in its Spring 2026 Economic Forecast. Weaker external demand is also weighing on export growth, Kallanish notes.

“Before the end of February 2026, the EU economy was set to keep expanding at a moderate pace alongside a further decline in inflation, but the outlook has changed substantially since the outbreak of the conflict. Inflation started picking up a few weeks after the outbreak of the conflict, driven by the sharp increase in energy commodity prices, and economic activity is losing momentum,” the Commission observes.

Headline inflation is now set to peak in 2026 before easing in 2027, as energy commodity prices are expected to gradually decline, albeit remaining around 20% above pre-war levels.

“The major risk surrounding the forecast concerns the duration of the conflict in the Middle East and its implications for global energy markets. Given the unusually high degree of uncertainty – and the narrowing window for a rapid normalisation of supply conditions – the baseline forecast is complemented by an alternative scenario assuming more prolonged disruptions,” the Commission continues.

Under this scenario, inflation would not ease and economic activity would fail to rebound in 2027 as projected in the baseline forecast. In addition, higher prices could prompt households and firms to scale back consumption and investment more sharply.

Continued uncertainty surrounding global trade policies and the ongoing reconfiguration of geopolitical and trade relationships could further weigh on confidence and activity, the Commission says.

“Faster implementation of structural reforms addressing long-standing bottlenecks to EU growth remains an important upside risk to the outlook. Strong public investment in sectors such as defence and the energy transition may offset some of the weakness expected in the private sector,” it adds.

Residential construction started a rebound in 2025, which is set to carry on for a few quarters. However, the prospect of higher financing costs and input prices in the sector seem to justify a downward revision for 2026, the Commission concludes.

Tata Steel Netherlands (TSN) is assessing early closure of coke and gas plants at its Ijmuiden steel plant, the steelmaker has announced, after being served a notice of intention to revoke relevant permits by Dutch environmental authorities. The issue threatens to become an existential one for the steelmaker.

The decision to revoke comes after a multi-year process to compel TSN to remedy violations of environmental standards at its coke and gas plants (CGP) 1 and 2, concerning excess emissions of substances of high concern. The plants have been under “heightened supervision” by authorities since 2023, leading to the imposition of a penalty scheme on TSN in late 2024, as well as requirements to perform renovations on CGP 2 such to bring it back into compliance with operational standards.

Since then, the Environmental Agency (ODNZKG) has charged TSN with over 20 million euros of fines, exhausting maximum penalties amount set by the regulator. As authorities still consider the plants in violation – and further charges can no longer be collected – the next step is to initiate revocation of the permits.

The Environmental Agency made its letter to TSN public on 19 May, finding “structural and significant exceedances of emission limit values for substances of very high concern (ZZS), where the norm is exceeded to a high degree,” resulting in “severe” consequences for the local environment and community.

TSN’s conduct was deemed “calculating,” with the Environmental Agency describing the steelmaker’s consistent failure to meet environmental compliance requirements, despite previous enforcement actions. Further, the Agency no longer believes TSN has capacity to actually remedy the long-standing issues at all, stating that “it is plausible that you do not have a realistic possibility to bring your actions into compliance […] this makes the very next step the revocation of the permit.”

TSN states in its press release that the decision to revoke creates “uncertainty for TSN as a whole.”

“TSN’s focus is on finding a solution that is appropriate for all stakeholders, taking into account all relevant interests, including the continuity of the business,” the steelmaker said. “TSN has communicated to the ODNZKG how the closure of KGF 1 and 2 should take place in a safe, responsible and controlled manner.”

Parent company Tata Steel Group’s latest financial reporting also demonstrates the concern, audited in the context of “material uncertainty” for TSN’s future amid issues of environmental non-compliance. The report was still audited on a going concern basis, as Tata still believes TSN has capacity to meet its liabilities for the next financial period.

Forced closure of the CGPs could significantly impact operations at TSN, as the plant’s operations are complex, with lots of crosscutting operational synergies and dependencies.

Tata itself describes how CGP gases are heavily integrated across its operations, providing necessary energy generation to both the Ijmuiden plant, and neighbouring plants. According to TSN, the integrated nature of the steelmaker’s operations mean that “the closure of a [CGP] automatically disrupts the entire chain,” potentially forcing TSN to source up to a cited EUR850m a year of natural gas on the open market, at a time when natural gas fundamentals are experiencing extreme geopolitical volatility.

TSN acquired Vattenfall’s Ijmuiden power plants at the start of the year, after previous agreements to supply blast furnace gases expired at the end of 2025. TSN CEO Hans van den Berg celebrated the “unique” nature of the plants – fueled by TSN’s residual process gases “unlike any other power plant in the Netherlands.” Whether other power plant operators should be jealous of this exclusivity, seems increasingly questionable.

Not only would closure of the CGPs threaten the profitability of TSN operations at a time of general crisis for the EU steel industry, it would also undermine their capacity to capitalise on supportive policymaking from the European Commission, such as the EU’s new quota regime, potentially losing market share to domestic competitors better positioned to profit without overly burdening downstream consumers on cost absorption.

This year is also the first that steelmakers begin to lose free allocation coverage under the EU Emissions Trading System (ETS), forcing them to buy emissions allowances on the carbon market as an additional cost. Losing the benefits of CGP off-gas circularity, and having to source natural gas externally, could see both energy and carbon cost burdens rocket for TSN in the mid-to-long term.

“Without money, we cannot finance the Green Steel plan”

Could TSN’s green steel plan mitigate these pressures in time?

Not according to the steelmaker, which holds that closure of the CGPs before 2029 – its current decarbonisation project timeline – would mean an effective halt to its decarbonisation efforts. As stated on its website: “Without money, we cannot finance the Green Steel plan. This means that no CO2-neutral steel will be produced based on hydrogen instead of coal.”

As illustrated in McCloskey’s Green Steel Profiles, TSN planned to close CGP 2 and blast furnace 7 in 2029 in the first stage of its transition plan, to be replaced with a direct reduced iron (DRI) plant and electric arc furnace (EAF). TSN describes how this transition to DRI-based steelmaking is “complex and far-reaching and takes time,” effectively meaning CGPs “cannot close before 2029.”

In the Joint Letter of Intent signed by TSN and the Dutch government on financing the decarbonisation of Ijmuiden, the closure of CGP 1 was indicated for around 2037. While the Environmental Agency does say that revocation of the permits “does not mean that the [CGPs] will be shut down immediately” – rather, terminated “in a safe and careful manner” – historical permitting issues, and statements from Tata and the Environmental Agency, suggest that permission to operate the CGPs under existing conditions until 2029 is very unlikely, even less likely by 2037.

Tata’s latest statement seems accepting of this new reality, in which the CGPs will indeed see early forced closure. McCloskey requested additional information from TSN on estimations of expedited timelines, and implications for the realisation of its Green Steel Plan, but the steelmaker declined to provide detail beyond its press release.

Additionally, TSN’s permit applications for the Green Steel Plan are currently suspended by the Environmental Agency until the steelmaker clarifies – among other issues – “information on the emissions of substances of very high concern”. The Environmental Agency pre-warned TSN that failing to provide additional details would likely result in permitting delays, and has published their communications to TSN for transparency with local communities.

TSN’s subsidy framework agreement with the Dutch government, in which it would be granted financing of up to EUR2 billion to fill funding shortfalls, is also conditional on the steelmaker remedying the Environmental Agency’s complaints, otherwise the agreement can be terminated unilaterally and with immediate effect:

“The State may terminate the [Joint Letter of Intent] with immediate effect, upon service of a notice in writing, if: […] TSN does not adequately address its legacy liabilities – in particular CGP2 – including further improving the compliance and control of the operation.”

Even if the overall agreement remains in place, final subsidy payments will only be issued upon the completion of DRI-EAF construction, including successful closure of CGP 2 and blast furnace 7.

Under the joint agreement, TSN would be entitled to up to EUR2bn to cover estimated overall CAPEX of EUR4.0-6.5bn for the project, and mandated to source private investment of EUR2.3-4.0bn to fund the remainder. The funding also only covers stage one, i.e the replacement of CGP 2, with no funds available for the later conversion of assets in stage 2, including the closure of CGP 1. With existing TSN operations ‘materially uncertain,’ private investment could be a tough sell to potential investors.

Regardless, any and all state funds are designated for specific purposes, and TSN specifically could not use the funds to remedy operational permitting issues with the CGPs.

It is important to note that TSN has only agreed a Joint Letter of Intent with the Dutch government outlining terms, and a formative agreement is yet to be signed.

Market reaction and expectations

McCloskey’s sources were surprisingly accepting of the news, expecting TSN to find alternative means of meeting its operational obligations, albeit at higher costs.

Several market participants were aware of TSN’s dispute with local authorities as an ongoing issue, and suggested that if permits are withdrawn, that the steelmaker would instead source coke externally to maintain production levels. Sources largely see this as a financing issue, and expect more of an impact on cost than output volumes:

“Tata Steel will have some time to reorganize and buy coke. This will be a financing issue, not a production hurdle,” said an EU steelmaker.

McCloskey’s coal market contacts, however, have not identified any immediate seaborne demand boost, and are yet to receive prompt inquiries.

Prices for imported seaborne met coke in Europe are continuing to move higher, supported by higher FOB levels and firm freight rates. The McCloskey CIF ARA assessment for CSR 65/63 BF coke was at $315/t on 15 May – a 20-month high. FOB prices for Indonesian material – rapidly gaining popularity among buyers in the Atlantic region – rose to $270/t, with prompt availability understood to be tight.

However, some European steelmakers have highlighted that seaborne coke imports do remain economically viable due to high coking coal prices. Furthermore, freight rates for Australian material remain elevated as a result of the Middle East conflict, continuing to inflate imported coal costs for regional buyers.

“It currently makes more sense to import coke – especially given the availability of cheaper Indonesian material – than to produce it in light of recent price hikes for Australian coking coal,” a steelmaker source commented.

McCloskey assessments for MCC1 low-vol PHCC and MCC2 mid-vol PHCC Australian seaborne metallurgical coal were both up by $1.20/t to $238.10/t FOB and $242.50/t FOB respectively on 19 May. Both indicators were slightly above $195/t FOB during the same period last year.

Compounding its burdens, Tata Steel Netherlands is already experiencing production issues on finished steel orders, requiring them to source material on the open market:

“[TSN] is already outsourcing hot-rolled coil to a German mill. They will just get more upstream products externally,” a distributor said.

Tata Steel closed its direct sheet plant (DSP) in early April after Environmental Agency findings that hazardous chrome 6 emissions at the site exceeded legal thresholds, forcing the steelmaker to buy hot-rolled coil (HRC) on the open market to fulfil its delivery commitments.

In Northwest Europe, deals and workable price levels for HRC have been reported at EUR680-700/t ex-works, with the majority of indications clustering between EUR680-690/t ex-works.

One distributor suggested that the revocation of the emission permits for the CGPs could result in a chain reaction across TSN operations, and a sharp drop in production. Some in the distribution space would welcome this reduction in market capacity: bullishness in domestic HRC prices has somewhat stalled recently, as regulatory supply-side drivers such as CBAM and quota fears lose a degree of momentum against demand headwinds.

“We could really use a boost again,” a Benelux-based service center said. “Demand is weak, and prices are under pressure.”

History repeating?

Several market participants drew comparisons between the ongoing problems at TSN with those of Italian steelmaker Acciaierie d’Italia (ADI), formerly known as Ilva. While the specific environmental issues confronting Italy’s ADI are not identical to those surrounding Tata Steel’s operations in the Netherlands, parallels have nonetheless sparked concern among industry sources.

The market remembers ADI as a cautionary tale, and understands that environmental issues can significantly impact steel production. In 2012, the massive environmental and health scandal at ADI resulted in the arrest of senior executives from the Riva family, then owners of ADI, and the eventual nationalization of the company. ADI has never fully recovered from the destabilization of its operations, and currently remains under state control.

Author: Benjamin Steven, Maria Tanatar & Olena Maksymenko

opisnet.com

 

The Port of Antwerp-Bruges registered a notably strong inflow of steel in the second half of last year, while more recently imports have settled, Kallanish learns from the port authority. 

The first half of 2025 was characterised by what the Port calls “a clear decline of transhipments (both ways, ingoing and outgoing) in the first six months (by 4.6%)”, for general cargo, which includes steel. Steel by itself saw an even more pronounced drop, by 11.7%, at the halfway point of the year. But then, handling picked up strongly in the third and especially the fourth quarter, meaning the annual drop slimmed to 1.7%, mainly because of lower exports, whereas imports rose by 6.7%.

The authority explicitly attributes that increase in the second half to the anticipation of stricter European trade measures against dumping and the introduction of the Carbon Border Adjustment Mechanism (CBAM). This backs the argumentation of many observers in the coil market, who reported a buying spree that has kept inventories filled even until now.

Steel imports from China went up by 22% in 2025 to 700,000 tonnes, making China the largest supplier. It is followed by India (680,000t, -9.2%), Turkey (513,000t, +121%) and Vietnam (490,000t, +13.3%). At the same time, exports remained under pressure, falling by 13.9%, due to weaker exports to the USA (-7.8%) and Mexico (-25.1%).

 

Romanian steelmaker and pipe mill Liberty Galati is being offered for sale through a new public tender following the approval of amendments to the court-backed restructuring plans, with the tender scheduled for 19 June, administrators Euro Insol and CITR confirm in a notice sent to Kallanish.

The integrated steelworks and pipe production assets will be offered at a reduced starting price of €463 million ($531m), excluding VAT.

The plant is Romania’s largest integrated steel producer, with annual steelmaking capacity of up to 3 million tonnes, located on a 1,600-hectare site in Galați. It has a private Danube River port with dedicated loading and unloading berths, rail links to the European railway network, heavy-duty road infrastructure and proximity to Constanța port, providing Black Sea access.

According to the presentation distributed by the administrators, the steelworks package includes three sintering machines, of which two are operational, two blast furnaces, with one operational, a steel shop with three continuous casting machines, and two quarto heavy plate mills, one of which is operational, with 2.2m t/y capacity and thickness range of 6-200mm.

The package also includes hot rolling facilities comprising a tandem mill with 1.8m t/y capacity and 100,000 t/y cut-to-length capacity, cold rolling capacity of 750,000 t/y, an 850,000 t/y pickling line, 225,000 t/y galvanizing line and 80,000 t/y organic coating line, as well as the coke-chemical plant, slag heap, captive utilities infrastructure, land and buildings.

The adjacent pipe factory has a 50,000 t/y capacity for longitudinal submerged arc welded (LSAW) pipe with diameters of 508-1,422mm and wall thicknesses of 6.35-25.4mm, supported by 3LPE/3LPP coating capabilities. The facility primarily uses heavy plate supplied from the captive LTG2 heavy plate mill, with alternative sourcing available from European and non-EU rolling mills.

Participation in the tender requires the purchase of official tender documentation containing detailed participation rules and full asset information, while site visits can be arranged upon request.

The steelworks was originally constructed between 1960 and 1966, while first steel production started in 1968. The plant reached peak output of 8.2mt in 1988 before being privatised under Mittal Steel in 2001, transferred to ArcelorMittal in 2006, and later acquired by Liberty Steel Group in 2019.

 

The factors influencing northwestern European coil prices this year are so wide ranging that mills’ and customers’ expectations regarding future price trends are diverging increasingly.

Steelmakers point primarily to limited import opportunities, higher production costs, and stricter European trade protection measures to justify price increases, writes Dutch service centre Noviostaal in a bulletin to customers. Buyers, on the other hand, are pointing at weak end-user demand, fierce competition between distributors (see Kallanish 20 May 2026) and still high stock levels within the supply chain – and therefore resisting price increases.

In this context, Noviostaal notes that price levels for cold-rolled and hot-dip galvanized coil remain relatively stable due to limited availability within certain product groups.

For both HDG and CRC, sources from mills and buyers contacted by Kallanish largely agree on a current range of €800-830/tonne ($831-967) ex-works. CRC/HDG prices seem somewhat more stable than for hot-rolled coil, which in numerous deals reported since April dipped below the €700/t mark that was successfully consolidated earlier.

One mill source agrees that prices for HDG/CRC are quite stable, and he finds that so are “demand and activity, as supply is tight due to new safeguards”. This, along with higher energy and raw materials prices and the EU safeguard replacement measure support stable or increasing HDG prices, despite a slow construction market, he believes.

On the buyer side, sources are not so sure. One trader flatly dismisses the possibility of prices rising. “Even if the mils are maintaining pressure, the issue is the demand – far too weak,” he says. He also notes customers are getting more familiar with CBAM management and perceive it as less of a risk. He points at some mill capacity restarts in France, Poland and Spain, which will put more pressure on the market.

A manager of a Benelux-based interior construction firm notes that, in view of the new EU quotas and CBAM, his company decided to increase stock levels and ratio from EU suppliers. This decision may have been taken by other end-user companies that need reliable quality. On the whole, however, many observers believe inventories are still well-filled from earlier purchases, no matter if domestic or from import, in anticipation of the EU’s import measures.

A buyer of a German processor mentions a high target announced by mills earlier, €880/t, “which is delusional; we are now between €800 and €820, and will stay there. Maybe see an increase in autumn, after inventories have been depleted over the summer”.

 

According to Germany-based independent think tank Agora Industry, Europe’s transition away from coal-based steelmaking will depend not only on new low-emission production technologies but also on the creation of stable long-term demand for near-zero emissions steel.

The organization stated that despite support from the EU Emissions Trading System (ETS) and government incentives, many green steel projects are still struggling to reach final investment decision (FID) due to uncertain market conditions and weak demand visibility.

Europe has large pipeline of near-zero steel projects

Agora Industry noted that the EU currently has approximately 34 million mt of announced near-zero capable steel projects based on direct reduced iron (DRI) technology. According to the report, around 25 million mt of these projects are progressing through permitting, construction, and FID stages. The think tank stated that these volumes could theoretically satisfy the European automotive sector’s entire demand for near-zero emissions steel by 2035 if stronger market-support mechanisms are introduced.

The report identified the European automotive sector as a potential catalyst for accelerating demand for low-emission steel products. The sector consumes approximately 15 million mt of mainly flat and high-quality steel each year, most of which is currently produced through traditional coal-based blast furnace routes.

Four factors support automotive sector’s role

Agora Industry outlined four main reasons why the automotive industry could become a major driver of green steel demand.

First, the sector’s large and stable steel consumption could provide steelmakers with reliable long-term demand, helping de-risk investments in hydrogen-based DRI projects. Second, due to strict quality requirements for automotive-grade steels, scrap-based electric arc furnace production alone will not be sufficient to meet decarbonization targets. According to the report, the sector will require DRI-based ironmaking combined with electric arc furnaces or existing blast furnace infrastructure. Third, the organization stated that low-emission steel would have only a limited impact on final vehicle costs, since steel represents less than one percent of total car production costs. Fourth, the report highlighted that steel production currently accounts for between 16 percent and 27 percent of total vehicle lifecycle emissions, meaning decarbonizing steel supply chains could significantly reduce automakers’ Scope 3 emissions.

Regulatory uncertainty remains major obstacle

At the same time, Agora Industry warned that uncertainty surrounding definitions and standards for low- and near-zero emissions steel continues to represent a major obstacle for investment decisions. According to the organization, several competing international standards and ongoing EU legislative processes have yet to establish a harmonized framework.

The report also cautioned that some projects currently categorized as low-carbon could continue relying on fossil gas beyond 2035 unless stricter future regulations aligned with net-zero pathways are introduced.

Agora Industry concluded that Europe already has a substantial pipeline of clean steel projects but stressed that stronger lead-market policies, harmonized standards, and broader support for upstream sectors such as green hydrogen production will be necessary to transform announced projects into bankable investments and accelerate deployment of climate-neutral steelmaking technologies across the EU.

Author: SteelOrbis Editorial Team

steelorbis.com

The main topics shaping discussions in the European longs market this week have largely focused on the approval of new European Union safeguard measures earlier this week, the widespread weakness in demand, and the first rumors regarding producers’ summer shutdowns.

In the Italian market, prices have remained unchanged, with rebar deals still being concluded at €440/mt ex-works base (€700/mt ex-works including regular extras) against offers at €460/mt ex-works base (€720/mt ex-works including regular extras). Producers’ inventories remain at high levels, while sales – at least in the domestic market – are reported at very low levels.

However, several sources have noted that, at the same time, the Balkan region, particularly countries such as Bulgaria and Romania, is emerging as an outlet market for producers who are struggling to place material domestically.

The situation is also stagnant in the wire rod segment, where prices are becoming increasingly unattractive due to their high levels. At the same time, some sources have reported that wire mesh prices have reached up to €775/mt ex-works, albeit with negligible sales volumes.

EU safeguard measures, approved earlier this week, have also been a key topic among market participants. Several market players consider them too restrictive and still incomplete. According to others, these measures could structurally alter the dynamics of European import markets, as some countries that were previously relying on imported material – particularly from Turkey – may now face increasing difficulties.

As for Germany, it is worth noting the ongoing maintenance shutdown at a major rebar and wire rod producer, which had already been announced and is expected to last approximately 2–3 weeks. Another factor weighing on the German market is logistics, as steelmakers appear reluctant to accept transport cost increases requested by haulers in order to protect their margins, resulting in slower delivery times.

Finally, import markets have remained broadly stable, as several exporting countries are preparing for the Eid al-Adha holiday (May 26–30). As a result, offers from Turkey have remained unchanged amid stable exchange rates, standing at €565/mt CFR for rebar and €570/mt CFR for wire rod, while offers from Egypt have been reported at €550-560/mt CFR for rebar and €570-575/mt CFR for wire rod. In addition, a Northern European processor is said to have purchased a 10,000 mt wire rod cargo from Algeria for delivery in early July.

€1 = $1.16

 

Muted trading in the European hot-rolled coil market kept prices broadly stable on Friday May 22, with scarce demand undermining sentiment and limiting expectations for any near-term recovery.

A buyer source from Northern Europe mentioned “nervousness about the global economy, reduced number of working days in the region in May and June due to holidays as well, overcooked market in the previous months and high stocks” as the key reasons for the lack of activity.

The most recent bookings in Germany took place at €660-675 ($773.67-791.26) per tonne EXW, which is well below offers coming in at €690-700 per tonne ex-works.

There were no mentions of any significant sales on Friday.

Fastmarkets’ daily steel hot-rolled coil index domestic, exw Northern Europe was calculated at €680 per tonne on May 22, down by just €0.42 per tonne from €680.42 per tonne on Thursday May 21.

The Italian HRC market remained similarly quiet. Weak demand and comfortable inventory levels at buyers continued to dampen trading activity, with offers heard at €700 per tonne delivered (€685 per tonne ex-works), whereas most recent estimates of tradeable levels came at €665-675 per tonne ex-works.

Fastmarkets’ daily steel hot-rolled coil index domestic, exw Italy was calculated at €677.50 per tonne on May 22, stable day on day.

The import market was equally sluggish, with buyers unwilling to take any additional risks in the conditions of the uncertainty over the quotas distribution under the upcoming new safeguard, which is to come into force on July 1.

Most recent offers of Turkish material were heard within the range of €590-600 per tonne CFR Italy excluding anti-dumping duties.

Indian coil was heard available at $685-705 per tonne CFR, which is equivalent to €590-605 per tonne CFR Italy.

Additionally, sources reported new offers of Algerian coil coming at the equivalent of €670 per tonne CFR, which was considered too high by customers.

 

European green steel premiums have remained unchanged over the past week amid thin demand, Fastmarkets heard on Thursday May 21, with China-origin green steel slab booked to Europe again without a premium.

Trading in Europe’s green steel spot market was virtually at a standstill in the week to May 21, with price differentials holding steady, according to industry sources.

Deal-making remained elusive while the gap between sellers’ expectations and buyers’ appetite showed no signs of closing.

Fastmarkets defines green steel as material with combined Scope 1, 2 and 3 carbon emissions not exceeding 0.8 tonnes of CO2 per tonne of steel produced.

Suppliers continued to seek premiums in the range of €180-200 ($211-234) per tonne, with one Scandinavian steelmaker pushing as high as €300 per tonne.

Buyers in the spot market, meanwhile, were reluctant to go beyond €100 per tonne. Some buyers estimated the premium for a spot market deal at nil, claiming that premiums were confined to project-based transactions, rather than open-market deals.

The bulk of green steel trade continued to flow through bilateral, long-term offtake agreements tied to sectors with established sustainability commitments – including construction, wind energy, automotive manufacturing and home appliances – leaving the open market thinly traded.

“Steel accounts for a relatively small share of the final cost of a car or a washing machine, so absorbing a green premium is manageable for those end-users,” one Germany-based buyer said. “But for distributors and service centres, buying green steel for inventory is essentially tying up capital for no immediate return.”

Estimates of the premium achieved for project business were heard at €150-170 per tonne.

Automotive end-users were securing future green steel supply through offtake deals struck directly with DRI-EAF producers currently in development, arguing that scrap-based green steel – the variety most readily available today – did not meet the definition of genuinely low-carbon material.

Fastmarkets’ weekly assessment of the green steel domestic, flat-rolled, differential to HRC index, exw Northern Europe, was stable at €100-170 per tonne on Thursday.

Green slab bookings

Chinese green slab has been finding its way into European hands, although buyers were securing the material without paying any meaningful premium over conventional alternatives, trade sources told Fastmarkets.

In May, around 40,000-50,000 tonnes of green slab from China was sold to Europe, notably to Italy, with prices reported around $590-600 per tonne CFR. But some offers were reaching slightly above that level.

Chinese mills – including HBIS, which has been among the more active suppliers of lower-emission slab – carry a modest premium on an FOB basis compared with standard grey slab exported from China, but that differential effectively disappears once the cost of freight is factored-in.

The calculation is complicated further by the fact that HBIS and similar producers do not operate exclusively on green production routes, meaning that the actual emissions intensity of any given cargo requires scrutiny before a green classification can be confirmed.

Produced from conventional routes, export slab prices in China were around $500 per tonne FOB, trade sources said.

Assuming a freight cost of at least $70 per tonne, the green slab cargoes were booked at roughly $520-530 per tonne FOB, so with around 4-6% premium compared with “grey” material.

At CFR Europe prices broadly in line with conventional Chinese slab, buyers have shown little appetite to stretch further.

Fastmarkets’ weekly price assessment for steel slab, import, cif Italy, was $600-620 per tonne on May 21, narrowing upward from $590-620 per tonne seven days earlier.

“Nobody is willing to pay extra for green slab here. We simply cannot pass that cost on,” one European re-roller said.

“Buying green [semi-finished steel materials], however, allows for some Carbon Border Adjustment Mechanism [CBAM] cost savings,” another source said.

The dynamic mirrors the broader pattern seen in finished green steel markets, where premiums remain largely a project-driven phenomenon and spot buyers consistently resist paying above grey-equivalent prices.

The latest green slab bookings from China to Europe, heard in April, were also made without any substantial premium.