Heavy plate prices and availability will be particularly impacted by the Carbon Border Adjustment Mechanism (CBAM), according to German consultant Andreas Schneider of Stahlmarkt Consult.
In contrast to most other products, Europe’s plate market is a hungry absorber of slab as the semi-finished input material used by many re-rollers in Italy, and other countries. The CBAM fees will be imposed on imports of plate as well as slab, meaning that this value chain will see barriers on both channels, Schneider says.
“The effect of CBAM on the costs of heavy plate and slab is even more unclear than for other product groups,” he tells Kallanish. The fee on plate could well range between €100-300/tonne ($118-354/t), he adds.
The EU’s gradual phasing out of Russian slab until 2028, or its potential ban from July this year as part of the new trade regime, has already caused a diversion to Asian sources. But countries like China and Indonesia will easily face default fees of €300/t or more, which will render them unattractive.
Most recently, slab from traditional Asian suppliers, excluding CBAM costs, were still reported at around $520/t cfr southern European ports (see Kallanish 30 January).
Among European re-rollers, the subsidiaries of NLMK in Belgium and Denmark are most dependent of material from Russia and will need to gradually divert to other sources. Although European mills have excess capacity of slab for coil production, these are normally thinner and cannot be easily used for rolling heavy plate.
European integrated mills are reportedly tempted by the low prices of Russian and Brazilian slab. Market sources suggest they occasionally do buy slab from import, rather than using their own production, and such transactions are sometimes heard in the market, but remain unconfirmed.
According to Schneider, “it’s one of the best-kept secrets – that [European] mills buy slab from overseas imports.”
