European coil and green steel round-up: EU coil prices climb further supported by CBAM, new quotas

European coil prices jumped in the week to 27 February as extended lead times, solid mill orderbooks, and import deterrents continue to balance the scales of the market in mills’ favour.

Hot-rolled coil (HRC) prices in both North and South Europe climbed by EUR15/t on the week. Market sources reported incrementally higher offers at EUR710-750/t delivered in Northwest Europe, with deals settling at EUR690-700/t delivered, or the ex-works equivalent of EUR660-690/t.

In Italy, trading price indications clustered at a very slight discount between EUR660-680/t ex-works, otherwise operating on similar dynamics as in North Europe.

While the market was fairly unanimous in expecting higher prices in Q1 as compared to 2025 levels due to supply-side drivers like the Carbon Border Adjustment Mechanism (CBAM) and the upcoming redesign of steel import quotas, the lack of recovery in steel consumption is starting to give both sides of the market pause as relates to the sustainability of the current upward trend.

“The price rise is purely due to new policies, while demand is unchanged,” said an Italian trader. “Importing is becoming far more complicated as everyone wants to buy DDP, but we need to price-in risk from the new quotas, and we have no clarity there. It’s clear the quotas will be slashed, but the country-specific allocations are uncertain.”

Distributors were said to have increased their own sales prices to consumers by around EUR20/t, but “are in no hurry to sell,” as described by a German stockholder, due to the upcoming quota cuts and the expectation of higher prices as a result.

A Benelux distributor considered market dynamics as largely unchanged, “except that end-users can more clearly see that further price increases are inevitable – that does make it easier to close sales.”

Cold-rolled and hot-dip galvanized coil (CRC/HDG) prices experienced similar gains as HRC, with dealings breaking above EUR800/t delivered. Domestic buyers remain concerned about the availability of downstream coils on both existing and upcoming import barriers — Brazilian exporters were said to be capitalizing on this dynamic, offering CRC “actively” into Europe at EUR690-720/t DDP Antwerp, due to their non-inclusion in the CRC anti-dumping framework, and competitive default values under CBAM.

A German distributor described CBAM as a “Sword of Damocles” hanging over the market, with default values presenting an existential risk to smaller, more import-dependent operators.

Green Steel

Despite its long anticipation, at the close of this week McCloskey exclusively reported that the EU’s first official green steel definition – the voluntary low carbon steel label – could be at risk due to wider frictions in the drafting of the Industrial Accelerator Act (IAA).

Green steel standardisation via the label was a priority of the European Commission, as stated in its Steel and Metals Action Plan, both for the clarity it could give buyers in securing material with true emissions reductions, and the intention to link the standard to public procurement mandates to stimulate domestic low-carbon markets.

A full abandonment of the low carbon label has not been confirmed, and sources expect that if the IAA does neglect to include the label, the debate would be revisited under the Ecodesign for Sustainable Products Regulation (ESPR), with a steel-related delegated act already scheduled for this year.

Otherwise it was largely business as usual in the green steel segment, though one green steelmaking executive said the low-carbon market is “quietly gaining momentum,” mainly driven by construction. National governments were also said to be giving a “soft push” in their jurisdictions for the increased use of low-carbon steels, and that CBAM has “woken people up to the realisation that decarbonisation is a policy that cannot be ignored.”

The automotive sector was described as one of the only segments still realistically purchasing mass-balanced low-carbon material, due to production history requirements for inclusion in their supply chains.

Green HRC premia were reported on a range of EUR80-100/t for spot buyers of EAF-based material of around 0.7t CO2e/t, while higher premiums were available in deals to project buyers, or material of particularly low CO2 content of around 0.3t CO2e/t.

Author: Benjamin Steven, Maria Tanatar