Italian heavy plate contract prices are expected to continue rising, driven by higher slab procurement costs linked to the Carbon Border Adjustment Mechanism (CBAM), Kallanish learns.
Market activity is gradually resuming after the Christmas break, with mills describing both sales performance and price levels as satisfactory. Lead times are now extending into late February, while import offers are not currently disrupting the domestic market.
Mill sources say further price increases are being considered this month due to uncertainty over CBAM-related slab costs, which remain difficult to quantify. Asian suppliers are currently unable to declare actual emissions values, as the European Union has yet to publish the list of accredited verifiers. As a result, all suppliers are declaring default values, leaving mills to estimate the effective CBAM burden.
“We are working blindly,” one mill source says. “For now, we are treating all suppliers as default-value producers and adjusting prices in the hope that increases will cover total slab costs, including CBAM. We will only know next year whether we worked well or not.”
Interest is emerging in Brazilian slab, whose CBAM costs are expected to be relatively low, at around €20-30/tonne ($23.37-35.06/t). However, Brazil has limited slab production capacity. The Tubarão plant, part of the ArcelorMittal group, will be expected to ship its slab supply internally.
Moreover, sources warn that slab producers incurring lower CBAM costs are likely to raise prices significantly. This will leave European plate re-rollers in a difficult position as they pass on cost increases without certainty over downstream consumption and whether customers will absorb those increases.
“There will be little or no slab allocation from Brazil,” another source says, adding that if suppliers do not certify actual values, responsibility for CBAM cost falls entirely on the buyer. Based on the latest EU documentation, CBAM costs for Chinese slab are estimated at around €160/t, while Indian material could face charges of around €300/t or slightly less. Indonesian CBAM costs will be entirely prohibitive.
Italian mills are currently quoting and achieving €700/t for S235 plate, with premiums of €30-35/t for S355 and about €10-15/t for S275. Their idea is to push S235 to the level of €750/t base ex-works this month and reach February with quotes starting with an 8.
Imported slab into Italy is currently assessed at about $500/t cfr, market participants note.
