European prices stabilise for now, CBAM looms: conference

Steel prices in Europe are now finding stability. Going forward, with the Carbon Border Adjustment Mechanism (CBAM)’s crucial role in promoting “greener” steelmaking practices and growing importance of scrap in green steelmaking, the industry is poised for significant changes.

The emergence of a two-tier market in Europe is likely amid CBAM, while divergent economic dynamics across different regions are contributing to the increasing complexity of the steel industry’s landscape.

These issues were discussed by panellists at Kallanish Flat Steel 2023 in Istanbul last week, with southern Europe editor Emanuele Norsa leading the discussion.

One of the central themes discussed was the state of steel prices in Europe. Despite hitting a low point, it was noted that current stability is primarily attributed to raw materials costs. While steel mills are eager to increase prices, their efforts face obstacles due to the prevailing weak market sentiment.

The EU is now subsidising its steel industry as part of its decarbonisation efforts. This was considered unthinkable a decade ago but is now deemed a necessity. Opinions on CBAM vary, with some seeing it as a way to level the playing field and others viewing it as just another trade measure. In any case, it is expected to increase costs for European end users.

The panel emphasised that CBAM, whose effects will be felt tangibly from 2026, is now regarded as an indispensable instrument in the drive towards decarbonisation. This marks a significant shift in consumer behaviour, notably among customers, including automakers, who are now increasingly inquiring about low-emission steel products.

Scrap will become increasingly important as a “green” steelmaking feedstock, leading to potential shortages, pointed out Ian Roper of Kallanish Consulting Services.

Elina Virchenko UAE