Asian steel shipments to Europe have slowed sharply in recent months as uncertainty surrounding the EU’s Carbon Border Adjustment Mechanism (CBAM) deters buying interest, mill sources, traders, and other market participants told Platts, part of S&P Global Energy, in the week to Dec. 8.
European buyers have largely avoided sourcing steel from Asia while they await clarity on CBAM-related compliance requirements, several mill and trading sources said.
“It’s not that mills don’t want to offer. It’s that European buyers are reluctant to book from Asia right now because of the longer lead time,” an Indian mill source said. The source added that although some mills attempted to ease buyers’ concerns by offering December-shipment cargoes, overall demand has stayed muted.
According to S&P Global Energy’s Global Trade Analytics Suite, Indian steel exports to the EU fell 33.4% to around 2.4 million mt in the first nine months of the year, compared to the same period in 2024.
China remained the top exporter, raising outflows by 29.15% in the first nine months of the year to around 3.2 million mt.
Indonesia’s steel exports to the EU rose 145.6% to 1.7 million mt over the same period, according to GTAS.
A source from a major Indonesian mill said they had already submitted CBAM-related data to authorities, adding that most information circulating in the market remains unofficial or leaked.
Because of the uncertainty, the mill is holding back lower-margin offers to Europe — similar to producers in India, Vietnam, and Malaysia, the source said.
Engagement with EU continues
Despite the slowdown, Asian mills have continued to engage with EU buyers, given Europe’s status as a key export market, particularly for hot-rolled coil (HRC), mill sources said.
The Indian mill source said mills are still offering into Europe despite weak offtake and margin pressure, as returns remain better than in other regions. The source reported the mill’s latest deal to Southern Europe at $575/mt CFR in late November, with freight at $50-$60/mt.
By comparison, Indian offers to Vietnam around the same period were reported at $485/mt CFR, while offers to the Middle East were heard at $510/mt CFR, Platts data showed.
Platts assessed imported HRC in Northern Europe at Eur500/mt CIF Antwerp Dec. 3, stable day over day, and in Southern Europe at Eur495/mt CIF South Europe, down Eur5/mt over the same period.
The Indian source stressed the need for greater clarity on CBAM pricing before mills can develop a comprehensive strategy. “For now, we only have some leaked numbers, not official figures. We will wait until the actual numbers are released before coming up with our strategy,” the source said.
Despite cautious sentiment, a trading house purchased in November three HRC shipments of approximately 100,000 mt of Indonesian coils to be sold to Europe for mid-February shipment, a China-based trader said.
Commenting on this deal, a Singapore-based trader said the sellers could face losses given the high default value indicated in a leaked CBAM document.
An Eastern China-based trader echoed this sentiment, saying that many buyers are unwilling to take on such risks and are instead turning to shorter lead-time cargoes from within the EU or nearby suppliers, such as Turkey.
A Vietnam-based mill source, however, said that this trend has also been seen throughout the year, rather than just in the last few months, adding that a seasonal slowdown in demand and depleted quotas were also major drivers.
Some market participants expect delivered pricing to become more common for EU-bound cargoes from January 2026. A Japan-based source said that buying indications for February shipment rose by $10/mt compared with December shipment, showing some willingness among buyers to absorb CBAM-related costs.
Navigating CBAM a bonus
With flows to Europe constrained, several Asian mills are targeting alternative destinations in the Middle East and South America, especially amid the year-end slowdown, according to several Asia-based traders. Competitive pricing is emerging in these markets, with many mills offering to offload excess supply at aggressively low prices, the traders added.
Still, sentiment is broadly optimistic that Asian steel exports to Europe will rebound once CBAM requirements become clearer.
Market participants said that clarification could create upside potential for mills that are able to supply compliant or higher-margin products.
A second Singapore-based trader said that a post-CBAM rebound in EU demand could also boost ASEAN markets through improved pricing.
Mills that successfully adjust to the new CBAM regime could gain a long-term competitive advantage as more countries begin considering similar carbon pricing mechanisms, a third Singapore-based trader said.
“Building trading experience under CBAM will be strategically valuable, especially as many stakeholders see Europe’s mechanism as a benchmark for their own carbon adjustment strategies,” the trader added.
