Some European traders have started imposing a price premium on orders for overseas coil, in anticipation of the CBAM fees that will take effect on deliveries arriving after 1 January 2026.
According to a Dutch market observer, traders for hot-dip galvanized (HDG) coil operate with split quotations: including and excluding expected CBAM costs. CBAM-inclusive quotations are approximately €15-25/tonne ($18-29) above quotes excluding CBAM, he says, and notes that “this makes comparison more complicated and emphasises the importance of tight logistics planning”.
The premium is, of course, “not the full CBAM charge but more an ‘early risk premium’ that mills or traders are currently adding,” he explains to Kallanish. The actual CBAM cost, once fully applied, will probably be much higher, in the range of €80-120/t or more, depending on product origin and carbon intensity.
“But since we are still in the transitional phase – reporting only, no real payments yet – most suppliers are not passing on the full theoretical burden. Instead, they add a limited surcharge to stay competitive while already covering part of the expected future cost,” he explains.
According to a manager of a European mill, traders and overseas mills are expected to split the effective CBAM fee into two thirds for the mill and one third for the trader. The €15-25 is therefore a share to be carried by the European customer, while the trader carries the risk in case the fee turns out to be on the high end.
In Europe, domestic HDG prices are at around €670/t ($784) ex-works. In China, the domestic price in euro terms is at or below €500/t fot (free on truck). With a price gap like that, a Chinese mill could easily take two thirds of a CBAM fee above €100/t and still compete against EU prices.
So far, this tool has been heard used for galvanized coil offers, but CBAM of course applies equally to hot rolled and cold rolled coil. “It is only a matter of time before similar CBAM-inclusive quotations will show up in those markets as well,” the Dutch observer says.
Christian Koehl Germany
