Category: Latest Updates

Salzgitter ceo, Gunnar Groebler is calling on the German state to support the uptake of reduced emission steel, Kallanish learns.

“We need politics that actively shapes the markets of tomorrow,” Groebler says in a social media post.

“The acid test here is public procurement. The government need to live up to its role as a pioneer. With smart incentives, like factoring in the use of CO2-reduced steel in the car fleet, it makes regulatory and economic sense for carmakers to use such steel. This would create a pull that can never be achieved with mere subsidies,” Groebler says.

In the first half of its financial year, the German steelmaker delivered “an encouraging performance”, which has prompted the company to lift its earlier profit forecast.

Its revenue of €4.6 billion ($5.3 billion) was slightly below the first half of 2025 compared with €4.7 billion a year earlier. However, Ebitda of €459 million “significantly outperformed” the previous result of €117m.

The main drivers were an exceptionally high earnings contribution from its participating interest in copper maker Aurubis, and the technology business unit.

Meanwhile, the steel focused units of steel production, and trading, also improved their figures, but were more burdened by geopolitical uncertainties, as a consequence of the war in the Middle East.

Crude steel production went up by 100,000 tonnes to 3 million tonnes. Meanwhile, its profit improvement programme made a sustainable contribution of €97m.

Additionally, the group undertook the move to acquire full ownership in Duisburg mill Hüttenwerke Krupp-Mannesmann (HKM) during H1. “The full inclusion of HKM prompted us in mid-July to revise our guidance for the financial year 2026 upward again, says cfo Birgit Potrafki.

In view of the various geopolitical and economic uncertainties, the group anticipates only a moderate improvement in general business conditions.

The group expects revenues of €10 billion for the full year, and Ebitda of €725-825m.

• Consistent and stable demand from the regional market,
• Aggressive pricing and trade policies from producers in the East,
• The significant price gap between EU producers and producers in Türkiye, Algeria and Egypt.

German automotive supplier association ArGeZ has expressed support for the European Commission’s proposed Industrial Accelerator Act (IAA), arguing that the initiative could strengthen Europe’s industrial base, expand manufacturing capacity and accelerate decarbonization across strategic sectors.

According to the association, geopolitical uncertainty, growing supply chain dependencies and large-scale industrial policy programs in the US and China have increased the need for a more strategically focused European industrial policy. ArGeZ stated that European preference rules are justified, particularly where public funding is involved, provided that the measures remain appropriate and proportionate.

Chinese automotive component imports have doubled since 2019

ArGeZ highlighted the growing competitive pressure on European automotive suppliers, noting that EU imports of automotive components from China have doubled since 2019, while EU exports have recorded only limited growth. Against this backdrop, the association considers a European preference system necessary to safeguard the competitiveness of manufacturers operating within the EU and preserve industrial value creation.

Under the proposed IAA, public procurement and financial support would increasingly favor products manufactured in Europe and associated with lower carbon emissions.

‘Made in Europe’ rules could support strategic industries

According to ArGeZ, a “Made in Europe” approach could strengthen European value chains and employment while supporting the transition toward a climate-neutral economy and helping retain technological expertise within the EU. The association identified steel, aluminum, rubber, automotive manufacturing and future technologies as strategic sectors that could benefit from the proposed procurement criteria.

ArGeZ stressed that local content requirements should apply not only to finished goods but also to their components, allowing a greater proportion of industrial value creation to remain within Europe. While supporting European preference rules, ArGeZ warned that their implementation should not create excessive administrative burdens for manufacturers. The association called for realistic and achievable local content requirements and said digitalized supply chains could simplify compliance and documentation, particularly in complex industries such as automotive manufacturing.

Third-country content should not automatically qualify as EU origin

ArGeZ also addressed how EU origin should be determined under the proposed framework. According to the association, the existence of a free trade agreement, customs union or procurement agreement with the EU should not automatically mean that content originating in a third country is treated as equivalent to EU-produced material. Instead, such treatment should depend on clear and WTO-compliant conditions, including reciprocity and comparable carbon costs and sustainability standards.

Europe’s steel sector is undergoing a critical transformation under pressure from high energy costs, global steel overcapacity, rising imports and carbon costs. According to an analysis by PwC Germany, coal-based blast furnace technology will not be the lowest-cost production method in any region by 2040. For Europe to remain competitive, it needs to shift towards secondary steel, low-carbon primary steel and high value-added production.

Europe’s steel industry is entering a structural transformation under pressure from global competition as well as energy and carbon costs. According to an analysis prepared by PwC Germany, high energy and production costs in Europe are combining with global steel overcapacity and strong import pressure, while the competitive advantage of regions outside Europe in low-carbon steel production is gradually increasing. While the European Union’s Emissions Trading System (ETS) and Carbon Border Adjustment Mechanism (CBAM) are making carbon costs more decisive in production decisions, these mechanisms are not expected to completely eliminate Europe’s energy cost disadvantage compared with resource-rich regions.

The cost advantage of blast furnaces is coming to an end
One of the key findings of the analysis is that traditional blast furnace technology using coking coal will lose its economic advantage in the long term. According to PwC’s calculations, rising CO₂ prices could double the cost of traditional steel production by 2045. By 2040 at the latest, the blast furnace method will no longer be the lowest-cost steel production option in any region of the world. This development has an important consequence for Europe. Maintaining energy-intensive primary steel production on the continent is becoming more difficult, not only because of carbon costs but also due to the persistent price gap between Europe and regions with access to low-cost energy sources.

The Gulf and India are emerging
The centre of gravity of competition in low-carbon primary steel production is shifting towards regions outside Europe. The Gulf countries and India are in an advantageous position in green steel production due to their access to low-cost energy and raw material resources. In particular, the ability to generate electricity from solar energy at low cost is making hydrogen-based direct reduction technology more competitive in these regions. According to the PwC analysis, in 2030, the cost of steel produced in the Gulf countries using natural gas-based direct reduction could be approximately 30% lower than blast furnace production in Central Europe. Green steel produced in India using hydrogen-based direct reduction is also expected to be approximately 15% cheaper than European blast furnace steel in the same year. In Europe, meanwhile, low-carbon primary steel production remains more costly. According to the analysis, only Scandinavia is in a position to achieve competitive primary steel production costs under optimistic assumptions.

Three different future scenarios for Europe
The PwC study presents three different scenarios for the transformation of the European steel sector. Under the import-based transition scenario, if Europe fails to reduce energy costs sufficiently, primary steel production is expected to shift to lower-cost regions such as the Gulf countries and India. Germany, meanwhile, is expected to maintain mainly its secondary steel production capacity. Under the balanced transition scenario, Europe develops its own low-carbon primary steel capacity, particularly in Scandinavia. After 2035, the share of imports increases. In this model, the European steel market consists of a combination of secondary steel produced in Europe, low-carbon primary steel supplied from Scandinavia and selective imports. The self-sufficiency scenario, meanwhile, envisages Europe meeting most of its steel needs through its own production thanks to stronger industrial policies and competitive industrial energy prices. In this case, the role of imports remains marginal.

Europe’s advantage lies in scrap steel
One of the areas where Europe can remain competitive stands out as secondary steel production. Production from scrap steel offers an advantage not only because of its lower emissions potential compared with primary production, but also because Europe has access to large quantities of scrap steel. However, secondary steel production cannot replace all of the primary steel capacity that will be closed or transformed. Therefore, in the future, Europe will need to source low-carbon primary steel both from its own competitive production regions and from external markets offering competitive costs.

The nature of production in Germany will change
For Germany, one of the key aspects of the transformation will be which stages of steel production will remain in the country. Alexander Schröder, Director of Energy Transition and Decarbonisation at PwC Germany, states that there is no future for coal-based primary steel production in Germany and points out that the metal processing sector needs to reposition itself at earlier stages of the value chain. According to Schröder, knowledge-intensive activities such as design, precision manufacturing, systems integration, certification and software will become more important in the future of production in Germany. In this model, competition will be shaped not only by the cost of producing steel per tonne, but also by the added value created when steel is transformed into a customer-specific product.

Industrial clusters will be decisive in the new era
Andree Simon Gerken, Partner for Energy Transition and Decarbonisation at PwC Germany, also states that relocating energy-intensive basic material production abroad does not necessarily mean deindustrialisation if it is supported by new value creation based on knowledge and expertise. According to Gerken, Germany needs to develop knowledge-intensive production activities around strong industrial clusters in order to maintain its competitiveness. In this context, accelerated permitting processes, access to affordable energy, port infrastructure supporting the import of intermediate products, and cooperation between universities and industrial companies stand out. In Germany, the Rhine-Ruhr region, the coastal regions, and the triangle formed by Hannover, Braunschweig and Wolfsburg are identified as potential areas for such industrial clusters.

Companies will redesign their production chains
The transformation of the European steel sector is not expected to be limited to changes in factory technologies. Companies also need to reassess the geographical location of energy-intensive production stages. The PwC analysis recommends that European steel companies establish partnerships with operators of facilities outside Europe, develop technology partnerships and secure access to low-carbon raw materials and steel through long-term supply agreements. This approach could reduce the impact of high energy costs in Europe while enabling producers on the continent to access low-carbon steel at predictable costs.

The focus of competition is shifting from production to value added
The fundamental question facing Europe’s steel industry is becoming not whether all production can be retained in Europe, but which stages of the value chain can be maintained competitively in Europe.
According to PwC’s analysis, a structure combining secondary steel production in Europe, low-carbon primary steel capacity in Scandinavia and selective imports stands out as a potential model for Europe.
For Germany, strengthening knowledge-intensive activities such as design, precision manufacturing, systems integration, certification and software is of critical importance.
Thus, the future of competition in Europe’s steel sector will depend not only on producing more steel, but on sourcing low-carbon steel at the most competitive cost and transforming this material into high value-added products.

Author: SteelRadar Editorial Team

steelradar.com

Prices for steel hot-rolled coil (HRC) in the domestic market of Northern Europe and Italy remained broadly stable on Wednesday August 12, with limited trading reported during the traditional summer slowdown period, sources told Fastmarkets.
In Italy, sources said prices were stable, as most suppliers were out of the market in August. 

“Moreover, at the moment we are out of the market, with the next availability from Italy, which is now an October or even November shipment depending on the product and specification,” a producer source said on Wednesday, adding that the activity in Italy was almost at zero, as usual for this period.

A buyer source indicated workable levels at €700-720 ($808-831) per tonne ex-works, in the same range as offers and indications reported on August 11, when mills were heard targeting €720 per tonne ex-works.

Fastmarkets’ daily steel hot-rolled coil index domestic, exw Italy was calculated at €713.75 per tonne on August 12, unchanged day on day.

The index was up by €4.75 per tonne week on week and up by €20.69 per tonne month on month.

The latest HRC import activity into Southern Europe included a deal from Egypt at $750 per tonne CFR for a small-quantity order, while material was offered at $760 per tonne CFR from the same origin, all including $30 duties under the Carbon Border Adjustment Mechanism (CBAM).

A lower offer was reported at €600-620 per tonne CFR on Wednesday, but sources could not confirm the origin.

Fastmarkets’ weekly price assessment for steel hot rolled coil import, cfr main port Southern Europe was at €565-600 per tonne, unchanged week on week.

In Northern Europe, the market was very quiet on Wednesday, with many of the participants away on holiday. A buyer source reported an indication of workable levels at €715-720 per tonne ex-works on August 12, and prices collected on August 11 were carried over to the following day.

On Tuesday, a deal for October delivery was reported at €705-715 per tonne ex-works, which was included in the index, as September delivery material was no longer available, according to sources.

Indications of achievable levels were reported at €710-730 per tonne ex-works on the same day, while offers reached €715-730 per tonne ex-works.

Fastmarkets’ daily steel hot-rolled coil index domestic, exw Northern Europe was calculated at €717.00 per tonne on August 12, up by €0.12 per tonne from €716.88 per tonne on August 11.

The index was up by €0.33 per tonne week on week and up by €12 per tonne month on month.

–Vlada Novokreschenova in Dnipro contributed to this article.

Germany-based steelmaker Salzgitter Group has stated in its financial report for the first half of this year that the given period was characterized by geopolitical uncertainties, particularly due to the conflict in the Middle East, along with persistently weak demand in key customer industries. The results of its steel production and steel processing units improved despite the challenging market environment.

To future-proof its position, the company noted that it continued to implement its “P28” profit improvement program. The program is designed to improve the performance of its business units in a sustainable way. By 2028, the company expects to see an overall effect of €575 million from efficiency and process improvements in procurement, logistics, sales and technology, including measures taken from the previous Performance 2026 program. In the first half of 2026, the P28 program generated an additional €97 million in earnings, while the company expects to achieve at least €122 million for the full year.

In the first half, the company reported a net profit of €43.5 million, compared to a net loss of €88.9 million in the same period of the previous year, while its sales revenues amounted to €4.59 billion, down by 1.6 percent year on year. Salzgitter’s EBITDA in the given period increased to €277.7 million, compared to €116.8 million in the first half of 2025.

Meanwhile, Salzgitter’s crude steel production totaled 3.03 million mt in the first half, increasing by 3.7 percent year on year.

As for the full year, the company expects its sales revenues to be around €10 billion, and its EBITDA VX to be between €725 million and €825 million.

The European Commission’s proposed revision of the EU Emissions Trading System (EU ETS) could reduce the future cost pressure created by the Carbon Border Adjustment Mechanism (CBAM) for Turkish exporters by slowing the withdrawal of carbon allowances and extending free allocations, according to Turkish newspaper Ekonomim.

Under the draft announced on July 17, the Commission proposes reducing the annual emissions cap reduction rate from 4.3 percent to 3.7 percent for the 2031-35 period and further to 1.7 percent for 2036-40, as SteelOrbis reported previously. The slower reduction in the supply of emissions allowances could ease upward pressure on EU carbon prices over the longer term.

ETS prices directly influence CBAM costs

The proposed changes are particularly important for Turkish companies exporting CBAM-covered products to the EU because CBAM certificate prices are linked to EU ETS allowance prices.

EU ETS allowances are currently trading at around €82/mt, while the European Commission’s official CBAM certificate price for the second quarter of 2026 stands at €75.28/mt.

Accordingly, a more gradual tightening of the EU ETS could moderate increases in carbon prices and consequently limit the growth of CBAM-related costs for Turkish exporters.

Free allowances could be extended until 2038

Another significant element of the Commission’s proposal concerns the phase-out of free ETS allowances for sectors covered by CBAM. Under the existing framework, free allocations are scheduled to be completely phased out in 2034. The Commission proposes extending this process until 2038, allowing the full carbon cost impact to be introduced more gradually.

The change would be particularly relevant for Turkish exporters of iron and steel, aluminum, cement, fertilizers, electricity and hydrogen, which are covered by the CBAM framework. Exporters of these products to the EU are required to account for their products’ embedded carbon emissions through CBAM certificates.

Sector-specific benchmarks could provide €6 billion in support

The Commission also proposes introducing sector-specific benchmarks for CBAM-covered industries during the 2026-30 period, rather than relying on general criteria. The proposed approach is expected to preserve higher levels of free allocation for affected European industries and provide approximately €6 billion in additional support. For Turkish exporters competing with EU producers, the evolution of these benchmarks and free allocations will be important in determining the effective carbon-cost difference between imported and domestically produced goods.

The proposed EU ETS revision has not yet entered into force. It will be subject to negotiations between the European Parliament and the Council of the EU before the final framework is determined. If adopted in its proposed form, the changes could spread the transition toward full carbon pricing over a longer period and moderate the increase in CBAM-related costs faced by Turkish exporters, particularly those operating in carbon-intensive industries such as steel, aluminum, cement and fertilizers.

Polish domestic long steel prices remained stable in the week to Friday August 7 amid weak demand and low buying appetite, with the summer slowdown continuing to curb trading.
“The market is not active due to seasonal factors and vacations of market participants,” a seller source told Fastmarkets.

No new transactions were heard during the assessment week, with market participants maintaining a wait-and-see approach.

In the rebar segment, workable levels were heard at 2,650-2,680 zloty ($711-719) per tonne CPT.

Fastmarkets’ weekly price assessment for steel reinforcing bar (rebar), domestic, cpt Poland, was 2,650-2,680 zloty per tonne on Friday, unchanged from a week earlier.

Trading activity in the wire rod segment remained limited during the assessment week. Offers were heard at 2,990-3,100 zloty per tonne delivered, with workable levels confirmed within the same range.

Fastmarkets’ weekly price assessment for steel wire rod (drawing quality), domestic, delivered Poland, was 2,990-3,100 zloty per tonne on Friday, unchanged week on week.

Production at Germany’s manufacturing industries was up 0.2% month-on-month in June, which follows a 0.7% growth registered in May, according to provisional data from the Federal Statistical Office (Destatis).

The quarterly comparison showed that production was 0.7% higher in the period from April to June than in the year’s first quarter. The positive development was primarily attributable to the growth observed in the automotive industry, with a 3.6% gain on the previous month, Kallanish learns.

The increase was also observed in the ‘other transport equipment’ segment, which includes aircraft, ships, trains, military vehicles, which saw an 8.4% growth.

By contrast, the decrease registered in the production of machinery and equipment (3.9%) had a negative impact. However, new orders in the mechanical engineering sector showed a slight upturn, too, according to the sector’s federation VDMA (see Kallanish separate).

This is considered in Destatis’ statistics for order intake in manufacturing industries, which was up 3.1% m-o-m.

In line with VDMA’s clarification, the Statistics Office notes that this leap was caused by several large-scale orders. If these are excluded, new orders were 0.5% lower than in the previous month.

Media commentary has stated that Germany’s industries are proving more resilient than expected amidst an environment of economic stagnation and international crises.

“All in all, German industry has shown surprising resilience. Whether this resilience and the current cyclical rebound can really translate into a structural recovery remains a different story,” a note by ING bank states.

One of the toughest headwinds, particularly during the summer months, are the critical water levels which could throttle industrial logistics to an unprecedented degree. That factor does not yet appear in the figures from Destatis through June.

Steel distribution group Klöckner & Co achieved an increase of revenue in its second quarter, however it reported a loss due to an impairment charge related to Becker Group, which it aims to spin off.

Following the sale of several US sites late last year, shipments in Q2 were 1.12 million tonnes, down 0.1mt from the second quarter 2025. However, adjusted for the sites sold, shipments were stood 3.2% higher than in the prior-year quarter. Revenue for Q2 totalled €1.7 billion ($1.96 billion), 6% up year-on-year. If adjusted for the US divestments, the increase was as high as 12%, the company notes.

It reports a negative consolidated net income of €268 million, down from income of €2m in Q2 2025, which was significantly influenced by an impairment charge related to the Becker Group.

Becker is Germany’s largest steel service centre with a capacity of 1m t/year of strip steel. It was acquired by Klöckner in 2010, and was put up for sale in January this year.

In recent years, the unit has seen changes of in management personnel. Market observers have told Kallanish that they believe that operations at the house suffered from the integration into the corporate structures of a listed group.

Before that, business had been in the hands of founder and managing owner Ulrich Lollert and his team. In recent years, however, observers told Kallanish that it had been operated often below its capacity.

Ther announcement of the spin-off of Becker happened close the news of Klöckner’s takeover offer from Worthington Steel. “It may have been a requirement, or a suggestion, of the Americans in the negotiations,” one observer speculates.

Klöckner’s has previously said the intention to divest Becker is in line with the group’s focus on profitable growth in higher value-added products and services. “The divestment of the Becker Group is proceeding as planned,” it notes.

In May, Klöckner had said that several non-binding offers were received, and that the prospective buyers were currently in the due diligence phase, however, a more recent update has not been given on the status of the process.