Category: Latest Updates

European hot-rolled coil prices were slightly weaker on Tuesday May 26, amid persistently weak demand from buyers with sufficient stocks, sources told Fastmarkets.

In Northern Europe, buyers estimates of the achievable price came in at €660-690 ($768-803) per tonne for June-July delivery, with the lower end of the range for larger tonnages of more than 5,000 tonnes.

Earlier in May, one leading European steelmaker and integrated mills in Germany were selling July delivery HRC at quite aggressive prices, sources said, at around €675-685 per tonne delivered (€660-670 per tonne ex-works), to try and fill gaps in their summer order books. But demand remained limited and only a few buyers were looking for large tonnages.

Transactional prices were way below the official offer prices for HRC from local integrated mills in Germany and the Benelux region, at around €710-730 per tonne delivered (€695-715 per tonne ex-works) – although one integrated mill in the Benelux area remained inactive after experiencing issues with equipment.

“Stocks are more than sufficient [and] some service centers said they don’t need material until September,” a buyer in Germany said.

“HRC sales from stock dropped by around 20% in April 2026 compared with March. And in May it will be even lower – we on;y had 17 working days in May due to numerous public holidays,” the buyer added.

Having achieved some orders for July, however, sources said European producers were becoming less flexible on pricing.

“[A leading European steelmaker] collected enough orders for July, then stopped aggressive sales,” a second buyer in Germany said.

“The [steelmaker] is likely to come back with higher offers shortly [and] mills hope the new safeguards [will help] prices to rebound later in the year,” the buyer added.

On Tuesday, several sources told Fastmarkets that leading European steelmaker ArcelorMittal was aiming for an increase of €80 per tonne for new offers, with the latest offers from the supplier for June-July delivery HRC heard at €730 per tonne delivered – although no confirmed transactions at that level have been reported recently.

Fastmarkets’ daily steel hot-rolled coil index domestic, exw Northern Europe was calculated at €676.46 per tonne on May 26, down by €3.54 per tonne from €680.00 per tonne on May 22.

Fastmarkets’ European HRC index was not published on May 25 because of the Spring Bank Holiday in the UK, but the index was down €5.54 per tonne week on week on Tuesday and by €33.54 per tonne month on month.

In Southern Europe, meanwhile, Fastmarkets’ daily steel hot-rolled coil index domestic, exw Italy was calculated at €673.77 per tonne ex-works on Tuesday, down by €3.73 per tonne from €677.50 per tonne on May 22.

The index was down by €5.61 per tonne week on week and by €26.23 per tonne month on month.

Italian mills were offering July delivery coil at around €700 per tonne delivered (€685 per tonne ex-works), but most sources said the realistic transaction level in Italy was no higher than €680-690 per tonne delivered (€665-675 per tonne ex-works).

A transaction for 1,000 tonnes was heard at around €675 per tonne ex-works for July delivery, sources said.

One local re-roller in southern Europe, which had suspended HRC production at the beginning of April due to technical issues, is now expected to resume operations in June, sources told Fastmarkets

In the secondary market, sales of 4mm S235-grade HR sheet fell back to €750-770 per tonne CPT in Italy, down from €780-800 per tonne CPT at the end of April.

Import market activity remained subdued across Europe, meanwhile, amid ongoing uncertainty surrounding the structure of the EU’s new trade regime, which is set to come into force in July 2026, combined with a lack of clarity around costs associated with the EU’s Carbon Border Adjustment Mechanism (CBAM). These factors have continued to weigh on buyer sentiment and restrain interest in new import bookings, with no fresh offers heard in the market on Tuesday.

European domestic hot-rolled coil prices remained largely unchanged on Wednesday May 27 as trading activity in the majority of the region’s markets stayed subdued.

In Northern Europe, many participants took holiday breaks, which slowed down an already sluggish market.

Indications of tradeable levels came at €680 per tonne ex-works during the day, with no major bookings reported.

A day earlier, several sources told Fastmarkets that leading European steelmaker ArcelorMittal was aiming for an increase of €80 per tonne for new offers, with the latest offers from the supplier for June-July delivery HRC heard at €730 per tonne delivered, which equals to €715 per tonne ex-works.

Market participants called the new price unrealistic, considering that even €715 per tonne ex-works has not been reached in recent transactions.

Fastmarkets’ daily steel hot-rolled coil index domestic, exw Northern Europe was calculated at €680.00 ($790.94) per tonne on May 27, up by €3.54 per tonne from €676.46 per tonne on May 26.

The index was down by €2 per tonne week on week and by €28.33 per tonne month on month.

The Italian market was also quiet, with tradeable levels estimated within the range of €670-680 per tonne ex-works.

Market participants explained the lack of trading activity with high stocks and low real demand.

The corresponding Fastmarkets’ daily steel hot-rolled coil index domestic, exw Italy was calculated at €676.25 per tonne on May 27 up by €2.48 per tonne from €673.77 per tonne on May 26.

The index was down by €1.75 per tonne week on week and down by €23.75 per tonne month on month.

Turkish HRC was heard available at €600-620 per tonne CFR, excluding anti-dumping duty in Italy, while Indian coil was reported available at €685-690 per tonne CFR.

Algerian material was said to be offered to Spain at €720-730 per tonne DDP.

A small cargo of Taiwanese HRC was offered at €740 per tonne DDP by traders.

German mills in April continued the trend of previous months, with an increase by 9.5% of crude steel production, compared with April 2025, to 3.2 million tonnes.

During the first four months of the year, the year-on-year increase was 9.1% in comparison with the corresponding 2025 period, Kallanish hears from national steel federation WV Stahl.

WV underlines the increase at oxygen-route mills, which in April was 10.7% y-o-y, totalling 2.2mt. EAF-route steel production rose by 7.1% to 1.0mt. The trend is even more pronounced when looking at the four-month figures, with oxygen-route steel up by 11% y-o-y to 8.6mt, and EAF-route steel up 5.8%, to 3.9mt.

The latest figures confirm a sustained stabilisation of German steel production, the federation states. But it also points that mills have not returned to normality. On a full year basis, the current production levels would reach 37.5mt, with quite a gap to 40mt, which is seen as the threshold for the profitable operation of mills.

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