Tag: 75th Anniversary

Increased market volatility and sharp global price swings are heightening uncertainty across the steel sector, according to Stemcor managing director Europe Julian Verden. However, European coil prices should recover during the second half of the year, supported by strong European trade protection measures.

There is “a massive amount of government interference,” Verden proclaimed at last week’s EUROMETAL 75th Anniversary conference in Luxembourg attended by Kallanish. “This is making the scope in which we have to work very, very difficult.”

Safeguard measures remain opaque, and the absence of real-time data continues to create uncertainty over when goods can be cleared through customs, he continued. The imminent confluence with Carbon Border Adjustment Mechanism (CBAM) regulations is only adding complexity. While these protective mechanisms are intended to shield Europe’s industries, they have instead imposed heavy financial burdens on businesses, undermining profitability and stifling investment.

Verden expects a sharp uptick in hedging activity across multiple segments, including iron ore, freight, steel, and carbon credits, as firms look to manage mounting volatility.

There is “enormous growth” of capacity in China, he added. Crude steel output in the country fell just 1.7% year to date through May, amounting to 431 million tonnes. Full-year production is forecast to edge just below 1 billion tonnes, a marginal 1% annual drop.

This is not enough to stop China’s increase in exports. Chinese steel exports are on pace to exceed 120 million tonnes in 2025, a volume Verden calls “far too much material spurting onto the market.” This flood is distorting global pricing and disrupting supply chains.

Year to date, over 40.47mt have already left Chinese ports. This export boom buys short-term relief for Chinese mills but creates global price pressure. Without a recovery in domestic demand, China faces a potential structural reckoning, Verden noted.

A global reallocation of steel production capacity is underway, with a major shift from the traditional leading producers such as China, the US, Europe, and Japan, towards India.

Despite persistent raw material constraints, India is positioned to double its capacity to 300mt in the coming years. India has produced over 67mt of steel year to date, marking a modest, 0.2% year-on-year increase. Meanwhile, first-quarter GDP growth reached 7.4% year-on-year, underscoring macroeconomic resilience. However, the ramp-up in domestic steel production may act as a drag on prices.

The US economy is outperforming many of its global competitors, but steel consumers, particularly major North American users and manufacturers, face significantly higher input costs. These buyers are paying 30-40% more for steel in the US market, a price differential that is unsustainable over the long term, Verden observed.

Unlike in Europe or the UK, where imports are diversified across numerous origins, US tariffs create a more insulated and constrained market.

“We do have a strong local steel industry [in Europe], but that has to be efficient, that has to be managed and invested in,” Verden commented. Trade barriers ultimately undermine long-term investment and are inflationary, raising input costs, pushing up producer prices, and contributing to elevated interest rates. Without coordinated policy alignment between the European steel industry and government stakeholders, the sector risks falling behind, Verden concluded.

Natalia Capra France

kallanish.com

 

The European coil market is showing no signs of recovery, remaining subdued with weak demand and limited pricing momentum on the domestic and import markets, sources told Kallanish on the sidelines of last week’s EUROMETAL 75th Anniversary conference held in Luxembourg.

While import prices appear to have reached a floor following a sharp decline, particularly low levels are still obtainable from Asian suppliers for large-volume orders of 50,000-tonne vessels. Nevertheless, buyers remain cautious, purchasing only when pricing is attractive.

Two mill sources in southern and northern Europe confirm the continued market weakness, noting that lead times remain short. No significant improvements are anticipated in the short term, while transactions are expected to be limited this month and focused on small tonnages.

Prices for downstream products, including tubes and sheet, particularly in Italy, are also on a declining trend. Market participants do not foresee any substantial improvement in coil or derivative sales in July ahead of the traditional August production stoppages.

In Spain, there is more optimism. A local steel processor reports solid results in June, with prices approximately €20/tonne ($23/t) higher than in Italy. Orders from the automotive sector are also holding up better than in the Italian market, suggesting a stronger demand environment.

In Italy, France, Spain, Belgium, Luxembourg and Germany, service centres are adopting a selective purchasing approach, sourcing both within and outside the EU.

Current Asia-origin hot rolled coil import transaction values range between €460-490/t cfr Italy, depending on origin and volume. Domestic base prices are reported in the range of €530-550/t delivered, with the low end seen in southern Europe.

Two German sources report bids dipping below €540/t base in their market. Many agree that European coil prices are likely to continue a slight downward trend until the end of the summer holiday period.

In Italy, Turkish-origin HRC offers are currently reported at €470/t cfr excluding duty, and between €485-490/t including duty. Indonesian-origin HRC is traded at €460-470/t cfr, while Indian-origin suppliers and other Asian countries are quoting slightly higher, at €500-510/t cfr.

Any new import orders from Asia are expected to be impacted by the upcoming Carbon Border Adjustment Mechanism (CBAM), adding further uncertainty to the import market.

An Italian service centre reports that companies are now incurring losses and facing challenges in securing insurance coverage, even for large customers.

The implementation of CBAM is expected to have a severe impact on service centre and re-roller margins as, from July onwards, importing at competitive prices will become increasingly difficult.

Additionally, the euro-dollar exchange rate remains unfavourable for buyers and is expected to deteriorate further, compounding pressure on margins.

According to Marcegaglia ceo Antonio Marcegaglia, flat steel prices are expected to reach their lowest point this summer before starting to recover in the fourth quarter. This will be driven by the European Commission’s safeguard measures review, existing quota systems, and CBAM.

Natalia Capra France

kallanish.com

Green steel premiums in Europe declined in recent deals, as willingness to pay for decarbonized material remained low amid broader market challenges, sources told Fastmarkets on Thursday July 3.

Overall, demand for steel produced with reduced carbon emissions content was said to have been muted across Europe this past week.

Therefore, sources said that steelmakers were more flexible in prices, especially when larger volumes were on the table.

Fastmarkets’ methodology defines European green flat steel as “steel produced with Scope 1, 2 & 3 emissions at a maximum of 0.8 tonne of CO2 per tonne of steel.”

European mills were offering premiums for such steel at a minimum of €200 ($235.33) per tonne, with some suppliers aiming for €250-300 per tonne. However, actual tradable values were lower.

“There are a lot of ‘useless’ inquiries — buyers come for test batches, looking to buy one coil or a very small amount. For those, mills give firm, high offers of €200 per tonne and up. For real buyers and large volumes, deals can be sealed at €100–130 per tonne,” a buyer source told Fastmarkets.

Transaction for sizeable tonnages were reported at €130 per tonne.

Bookings were heard done at €150-180 per tonne.

Buyers estimated tradable values for green flats at €100-170 per tonne.

Mill sources gave higher estimations of €150-200 per tonne.

Sources reported that buying interest for green flats was coming mainly from the automotive and white goods sectors.

As a result, Fastmarkets’ assessment for the green steel domestic, flat-rolled, differential to HRC index, exw Northern Europe was €130-180 per tonne on Thursday July 3, down by €20 per tonne from €150-200 per tonne seven days earlier.

Continued limited demand for green steel in Europe was explained by poor market fundamentals, sources said.

“We have other problems than green steel now — Trump tariffs, imports, shrinking consumption, high costs [of steelmaking],” a trading source in Europe told Fastmarkets.

CBAM developments
On Wednesday July 2, the European Commission launched a public consultation on the Carbon Border Adjustment Mechanism (CBAM), aiming to refine the framework and close potential loopholes.

The consultation is open until August 26 and focuses on several key areas:

1. Expanding the CBAM scope to downstream products — to cover a broader range of goods and mitigate the risk of carbon leakage further along the supply chain.
2. Addressing circumvention tactics — targeting strategies used to evade CBAM obligations, such as reclassifying products or shifting production to third countries.
3. Improving the treatment of imported electricity — assessing ways to better calculate emissions linked to imported electricity, particularly to more accurately reflect decarbonization efforts in exporting countries.

CBAM will formally enter into force on January 1, but its fiscal impact will only start in May 2027, Fastmarkets reported.

During the first year of CBAM implementation (2026), importers will be required to pay for just 2.5% of embedded emissions. This proportion will gradually increase, reaching 100% of emissions by 2034.

As a result, the costs associated with importing goods will rise significantly next year, and buyers are advised to begin preparing now.

Additional charges will apply to higher-emission imported steel, estimated at approximately €56 per tonne.

“Assuming this benchmark and imported steel with embedded CO2 emissions of 2.1 tonnes and a current EUA price of €76, CBAM is estimated to cost an additional €56 per tonne of steel,” Julian Verden, Managing Director Europe at Stemcor, said at the EUROMETAL 75th Anniversary event attended by Fastmarkets on Thursday.

Da Julius, Adam e Marcegaglia appello alla coesione nel dialogo con le istituzioni Ue

Eurometal, l’associazione europea che rappresenta i distributori, i trader e i centri servizi siderurgici, ha festeggiato questa settimana a Lussemburgo i suoi 75 anni. Per l’occasione, ha organizzato una conferenza incentrata sulle sfide della siderurgia europea e della sua filiera della distribuzione e lavorazione.

Alexander Julius, presidente di Eurometal, ha aperto i lavori sottolineando la necessità di parlare con una voce unica alle istituzioni europee. Un appello alla coesione raccolto anche da Henrik Adam, presidente di Eurofer (l’associazione dei produttori siderurgici europei), che ha avvertito che il rischio di deindustrializzazione in Europa è reale. «Abbiamo bisogno di mandare messaggi chiari e semplici come filiera – ha aggiunto Adam –. Il declino della siderurgia europea non deve essere inevitabile». Sulla stessa linea anche Antonio Marcegaglia, presidente e Ceo di Marcegaglia Steel, che dal palco ha ribadito l’importanza della collaborazione tra produttori, distributori e trasformatori.

Durante l’evento si è discusso molto di Cbam, il Meccanismo di adeguamento del carbonio alle frontiere che entrerà pienamente in vigore nel 2026. Secondo Julian Verden di Stemcor, le autorità fisseranno un benchmark per le emissioni nella produzione di acciaio a 1,4 tonnellate di COâ‚‚ per tonnellata di acciaio. Se questo sarà lo standard utilizzato, sarà probabile che il sovrapprezzo che dovrà affrontare chi importerà coils a caldo (HRC) da inizio 2026 si aggirerà intorno ai 50-60 euro la tonnellata (tenendo in considerazione una media di 2,1 tonnellate di COâ‚‚/tonnellata di acciaio). L’effetto sarà dunque inflattivo sul fronte dei prezzi europei.

Henrik Adam di Eurofer ha spiegato che il Cbam può rappresentare tanto una leva di supporto quanto una minaccia per l’industria siderurgica europea; per questo «bisogna trovare in fretta una soluzione» per togliere la possibilità di aggirare le regole, salvaguardare le esportazioni europee ed evitare l’effetto di delocalizzazione di settori utilizzatori dell’acciaio fuori dall’Europa.

Infine, si è parlato di decarbonizzazione della produzione siderurgica, un trend che nonostante qualche rallentamento continuerà ad essere centrale nelle strategie europee. Guido Kerkhoff, amministratore delegato di Klöckner, ha mostrato alcuni calcoli secondo cui l’utilizzo di acciaio verde può contribuire significativamente alla riduzione delle emissioni nei prodotti finiti, come auto, elettrodomestici e turbine eoliche, con un impatto marginale sul prezzo finale. Nel caso di un’automobile, l’utilizzo di acciaio decarbonizzato (anche se con un costo maggiorato del 50%) avrebbe un impatto sul prezzo finale di un veicolo inferiore all’1%. Per una lavatrice, l’incidenza sarebbe di circa il 3,6%. «L’acciaio è un prodotto conveniente rispetto ad altri metalli e può essere decarbonizzato – ha aggiunto Kerkhoff –. Nel 2030 ci aspettiamo che la domanda di acciaio decarbonizzato sarà superiore all’effettiva disponibilità sul mercato, dopodiché la disponibilità aumenterà sia dall’Europa che da altre fonti».

E. N.

siderweb.com

Safeguarding European steel industry, energy supply, decarbonization of the regino’s steel industry, implementation of the EU’s Carbon Border Adjustment Mechanism (CBAM), trade measures and the emerging green steel market were at the core of discussions during the event.

Energy supply – major stumbling block for decarbonization
Currently, approximately 55% of steel in Europe is produced using the blast furnace-basic oxygen furnace (BF-BOF) method, while about 45% is made through the electric-arc furnace (EAF) process. While the EU shifts toward cleaner technologies to achieve its goal of net-zero carbon emissions by 2050, the share of steel produced via the EAF route is expected to rise to around 57%.

Between 40 million and 50 million tonnes per year of new green steelmaking capacity – using electric-arc furnaces (EAFs) alone or EAFs and direct reduced iron (DRI) – is expected to come online in Europe in 2026-30, Fastmarkets’ research team estimates.

The energy-intensive nature of steel production leads to high electricity consumption. With the switch to EAFs, it would be expected that the sector’s electricity consumption would only increase.

Consequently, access to renewable energy at affordable prices has become a crucial factor in European steel industry decarbonization efforts.

The energy needed to feed new capacities is 165TWh, of which 90MWh will be needed for hydrogen production. This was estimated to require 2.1 million tpy via water electrolysis, Henrik Adam, executive chairman of Tata Steel Netherlands, said during his presentation at the event.

In Europe, electricity demand will double by 2030, reaching 165TWh compared with 75TWh in 2010-20, and will quadruple by 2050. Some 230TWh will be needed by 2050 just for hydrogen production, Adam said.

But European steel market participants suffer from higher structural costs compared with Asian and even US market participants.

Electricity prices in Europe remain significantly higher than in many other regions. Industrial rates often exceed €100 ($118) per MWh, while in places such as the US and China, costs typically range between €30 and €50 per MWh. This stark difference poses a major competitiveness challenge for energy-intensive industries such as steel manufacturing.

In such circumstances, decoupling energy-intensive ironmaking from steelmaking has become an omni-present discussion point.

Antonio Marcegaglia, chief executive officer of steelmaker Marcegaglia, told Fastmarkets that importing hot-briquetted iron (HBI) and DRI from origins such as the Middle East-North Africa region (MENA), where HBI/DRI production is more commercially viable, was one possible scenario in coming years.

“I think there are some interesting projects [in Europe] which are aiming to use cheap energy,” he said, “especially in the Nordic [states], such as Stegra and Hybrit – placed in the North [and] taking advantage of a nice mix of renewable [energy] availability. Or in France [benefitting from nuclear energy] to support some green hydrogen-based projects…

“There will be some DRI available for non-integrated [steelmakers] in Europe,” Marcegaglia added, “but I do believe that if we want to take [decarbonization] seriously] we will need to rely on other sources [of DRI/HBI], where gas is cheaper and allows competitive DRI/HBI production – particularly the MENA region.”

Green steel desirable but costly
Industry sources estimated that the volumes of green steel traded in Europe were less than 100,000 tonnes in 2024.

Buyers’ remain unwilling to pay a premium, and weak market conditions have paused or slowed some decarbonization projects.

Very few suppliers were able to offer “physically produced green steel, with emissions proved by Environmental Product Declarations [EDPs] below 1 tonne of CO2 per 1 tonne of steel [for Scope 1, 2, 3 emissions],” one distributor said.

“One can reach net-zero [emissions] with [carbon] offsets, but some buyers refuse to deal with such steel, claiming it has been ‘green-washed’,” a major distributor told Fastmarkets.

European mills were offering premiums for EAF-produced green steel with emissions for Scope 1, 2 and 3 carbon emissions below 0.8 tonnes per 1 tonne of steel at a minimum of €200 per tonne, but actual tradeable values were lower.

On the sidelines of the event, buyer sources estimated tradeable values for such steel at €100-150 per tonne.

“There are a lot of ‘useless’ inquiries – buyers come for test batches, looking to buy one coil, or a very small amount,” a second buyer source said on the event sidelines. “For such inquiries, mills give firm high offers of €200 per tonne and higher. For real buyers and big volumes, deals can be sealed at €100-130 per tonne.”

Fastmarkets’ weekly assessment of the green steel domestic, flat-rolled, differential to HRC index, exw Northern Europe, was €130-180 per tonne on July 3, down by €20 per tonne from €150-200 per tonne seven days earlier.

Steel production accounts for roughly 7% of global carbon emissions, according to the World Steel Association.

Nevertheless, its carbon footprint remains lower than that of some other materials. For example, producing one tonne of carbon fiber emits around 20 tonnes of CO2, while aluminium production generates 5-8 tonnes of CO2 per tonne.

Importantly, steel is fully recyclable and can be reused repeatedly within the material cycle.

Advancements in technology have also made it possible to produce more sustainable “green” steel, which can be adopted across various industries. According to Guido Kerkhoff, chief executive officer at Klöckner & Co SE, using green steel only marginally increases the cost of the final product.

Notably, for the automotive industry, the use of green steel products would only push the price of a car up by around 0.7%, and by around 3.6% for home appliances. For onshore and offshore wind towers, the costs would rise by 3.4% and by 5.5% respectively.

Safeguarding EU steel industry in the face of crisis
Steel capacity far exceeds demand globally. In 2024, it was estimated at more than 600 million tpy by the Organisation for Economic Co-operation & Development (OECD), while in 2025-27 it is likely to increase further when new plants come online.

According to the OECD, the nominal crude steelmaking capacity in Europe is well in excess of 200 million tpy, but actual output volumes have been lagging far behind that in recent years.

The EU’s crude steel production in 2024 reached 129.49 million tonnes, a 2.6% increase compared with 2023. But it was still one of the lowest historical levels.

And several market participants told Fastmarkets on the event sidelines that this tendency was likely to persist in the years to come.

“Steelmaking capacity massively [outweighs] actual production [in Europe and] is representative of what needs to be done [more generally] – shutting down redundant capacity,” a trading source told Fastmarkets.

Apparent steel consumption has also been falling sharply – by around 15 million tpy in the past 6-8 years – to just 127 million tonnes in 2024, Marcegaglia noted in his presentation.

At the same time, the European steel sector is grappling with surging production costs, and a flood of low-cost imports from Asia.

Imports’ share of domestic steel consumption in Europe remained quite high – it was estimated to be around 25-30% for hot-rolled coil (HRC) in 2024, sources told Fastmarkets.

The existing EU steel safeguarding measures have been in place since 2018, intended to protect EU steelmakers from a potential surge in imports. The current measures were set to run until June 30, 2026.

In the third quarter of 2025, the Commission is expected propose long-term measures based on tariff rate quotas, replacing the steel safeguards as of July 1, 2026, providing an equivalent level of protection against negative trade-related effects caused by global overcapacities.

Maret sources said that new measures would probably be product-based, not country-based.

Axel Eggert, director general of European steel industry association Eurofer, said that the new highly effective steel trade measures should be applied to all countries, regardless of market orientation or development status, and should cover all basic products.

In addition, Eurofer asked for an increase in the above-quota tariff rate for imports to 50% – it was 25% in the current steel safeguard measures.

Existing steel safeguard measures will run until June 30, 2026, and “there is no review of the current safeguards planned,” Eggert said.

In 2024, the EU imported 9.7 million tonnes of HRC, up from 9.24 million tonnes in 2023, according to Global Trade Tracker (GTT) statistics.

With traditional suppliers such as Egypt, Vietnam and Japan facing trade limitations in 2025, new suppliers such as Malaysia and Indonesia were seen to capture larger market shares.

Earlier this year, market sources noted that the sharp increase in HRC deliveries, notably from Indonesia, might result in either an anti-dumping probe or their inclusion in the “other countries” quota, with the latter appearing more likely.

For example, in January-April 2025, Indonesia supplied 213,152 tonnes of HRC to the EU, compared with just 64,213 tonnes during the same period in 2024. Total HRC deliveries from Indonesia to the EU were 250,908 tonnes in 2024.

But because no review is planned, this issue will probably remain unresolved in the near term.

CBAM – bureaucratic nightmare or necessity?
On July 2, The European Commission launched a public consultation on CBAM, seeking to refine it and address potential loopholes.

Key aspects of the consultation include:

1. Extending the scope of CBAM to downstream products, to cover more goods in order mitigate the risk of carbon leakage in later stages of the supply chain.
2. Addressing circumvention tactics and strategies used to avoid CBAM obligations, such as reclassifying goods or routing production through third countries.
3. Refining the treatment of imported electricity, to examine how to improve the calculation of emissions from imported electricity, particularly to better reflect actual decarbonization progress in exporting countries.

Effectively, CBAM will come into force on January 1, but the fiscal implications will only become effective in May 2027.

In the first year of CBAM, in 2026, importers will have to pay for only 2.5% of embedded emissions, but this rate will gradually increase to 100% of grey emissions by 2034. Therefore, the costs of handling imports will dramatically change next year, and buyers should start to prepare now.

Extras will have to be paid for imported steel with higher emissions, bringing additional costs of around €56 per tonne.

“Assuming this benchmark and imported steel with embedded CO2 emissions of 2.1 tonnes, and a current EUA price of €76, CBAM is estimated to cost an additional €56 per tonne of steel,” Julian Verden, managing director for Europe at steel services provider Stemcor, said.

Maret sources expected that CBAM implementation in 2026 will support a rebound in domestic steel prices in Europe.

European HRC prices have been under pressure recently due to poor demand, recently hitting new lows.

Fastmarkets’ calculation of the daily steel HRC index, domestic, exw Northern Europe, was €550.00 per tonne on July 4, down from €565.63 per tonne on June 27.

This was the lowest values of the index since October 28, 2024, according to Fastmarkets’ database.

“Recent trade data and pricing indicate that the market expects a recovery in the second half of 2025 due to numerous factors, with CBAM seen as especially inflationary,” Verden said.

Eurofer and other market participants have lobbied the European Commission to consider new protectionist measures and an acceleration of the CBAM program to support the market. But it remains to be seen how governmental bodies will react to such requests.

A communication issued by the Commission on July 2 read: “The Commission intends to make a dedicated proposal using the revenues generated by CBAM which will be extended to support production at risk of carbon leakage. This would allow the affected producers to be compensated proportionally to the phasing out of the free allowances subject to deliverables on long term decarbonisation…

“This solution aims to ensure equal treatment for CBAM goods,” it added, “whether produced and sold in the EU, exported from the EU to third countries or imported into the EU to maintain [World Trade Organization] compatibility.”