Italy and France to back overhaul of CBAM to boost EU competitiveness
Italy and France underscored the need for the European Commission to reassess the EU’s Carbon Border Adjustment Mechanism (CBAM) to bolster the competitiveness of European industries amid the ongoing challenges of decarbonization.
Italy’s Minister of Enterprises and Made in Italy, Adolfo Urso, met with France’s Minister of Industry and Energy, Marc Ferracci, on Feb. 11, where they both called for the inclusion of CBAM as a key agenda item at the forthcoming EU Competitiveness Council meeting on March 6.
“We cannot allow strategic European sectors, such as steel and chemicals, which are essential for our industrial autonomy and for the economic stability of the continent, to be penalized by a system that does not take into account the real conditions of global competitiveness,” said Urso in a statement.
This comes as there has been a growing call among policymakers, politicians, and industry leaders to simplify the EU’s carbon border tax as the Commission tries to balance industrial growth with environmental goals.
“The geopolitical context requires Europe not to depend on external actors for essential materials and technologies. It is therefore crucial to correct the CBAM so that it is a truly effective tool, capable of protecting European industrial production and at the same time encouraging a sustainable transition in practice, not just in principle,” added Urso.
Streamlining CBAM
On Feb. 6, EU Commissioner for Climate, Net-Zero, and Clean Growth, Wopke Hoekstra, admitted that his team is considering excluding around 80% of EU companies from the Carbon Border Adjustment Mechanism to reduce their administrative and bureaucratic workload.
Hoekstra stated that almost 97% of all emissions covered by CBAM are produced by only 20% of companies, highlighting the need for some flexibility in implementing this carbon border levy.
CBAM is a carbon tax on emission-intensive commodities exported to the EU, currently covering the cement, iron and steel, aluminum, fertilizer, electricity, and hydrogen sectors. The levy is designed to reflect the difference between EU carbon prices and carbon costs in exporting countries.
With the definitive phase of the EU’s CBAM set to kick in on Jan. 1, 2026, importers of carbon-intensive goods will face levies based on the emissions associated with their imports.
Under the transitional phase of CBAM, which started on Oct. 31, 2023, traders must only report on emissions embedded in their imports without paying any financial adjustment. However, this mechanism will be phased in from 2026 to 2034, in line with the phasing out of free allowances in the EU ETS.
The decline in industrial and manufacturing output contributed to a reduction in the European carbon price last year. However, prices have rebounded significantly in early 2025. The suspension of Russian gas transit through Ukraine has led to higher coal power generation, pushing up demand for carbon permits.
EU Allowances averaged Eur66/mtCO2e ($68.13/mtCO2e) in 2024, down more than 20% year over year, S&P Global Commodity Insights data showed.
Platts, part of Commodity Insights, assessed EUAs for December 2025 delivery at Eur82.41/mtCO2e on Feb. 11.
Acciaierie d’Italia to increase Taranto production this year
Acciaierie d’Italia (ADI)’s commissioners aim to produce 3.5 million tonnes of steel in 2025, with output progressively increasing following the reopening of BF no.2, Kallanish learns from market sources close to the company.
They have requested Italy’s labour minister extend the temporary layoffs for an additional 12 months, commencing in March, affecting a total of 3,420 workers, with 2,955 of those at the Taranto steelworks.
The document submitted to the labour ministry, the unions and the enterprises and made in Italy ministry (MIMT) says that Taranto produced 2mt in 2024.
Currently, Taranto is functioning with blast furnaces no.1 and 4, achieving a production rate of 8,000 t/day. This indicates a slower production rate, as Taranto has the capability to produce approximately 20,000 t/day at full capacity.
The document claims that present production levels are insufficient to ensure a sound cost-profit ratio.
The deadline for reviewing the binding offers for ADI is set for 14 February.
Only three proposals have expressed interest in acquiring ADI’s assets as a whole. These were American investment fund Bedrock Industries Management, Jindal Steel International, and a consortium comprising Baku Steel Company CJSC and Azerbaijan Investment Company OJSC.
ADI’s facilities in northern Italy were the subject of seven proposals. These include a consortium established by CAR Segnaletica Stradale Srl, Monge, Trans Isole Srl, and Eusider SpA, alongside another consortium that includes Eusider, Marcegaglia, Profilmec, and I.M.C.
A third consortium, comprising Marcegaglia, Sideralba, and Vitali, has reportedly submitted a bid for the tube re-rolling plant situated in Salerno. These suitors are not interested in the Taranto steelworks (see Kallanish passim).
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Italian re-rollers enact price increases on high costs
Italian re-rollers are contemplating a price increase and a reduction in tube discounts, sources tell Kallanish.
One re-roller is enacting a price increase of €50/tonne ($52/t) effective immediately, resulting in a reduction of discount levels to 46 points. The company aims to achieve a discount level of approximately 43-44 points within the first ten days of February.
The increases are deemed critical for margin recovery, amid an unsustainable gap between current prices and costs. Costs for re-rollers continue to increase. Donald Trump’s return is expected to result in the implementation of global safeguards and antidumping measures.
“We expect that the majority of Eurofer requests will receive approval from the European Commission, and an increase in protectionist measures is likely to complicate coils import. Re-rollers with a pricing structure based on global HRC purchases will face significant challenges due to the forthcoming regionalisation of the market and increased coil costs,” a tube maker says.
Another agrees that the safeguard review is highly anticipated, and the unfavourable euro-dollar exchange rate will make it more expensive to import coils. Demand for welded tubes is on an upward trajectory; however, the cost of hot-rolled coil in Europe is projected to approach €610/t base delivered in the near term.
Currently, the tube discount levels in Italy are holding steady month-on-month at 48-49 points. With a 48% discount, a workhorse grade such as the 40x40x3 is priced at approximately €670/t ex-works, resulting in negative margins for some.
To effectively manage costs and secure some profit margins, this grade should be positioned at a price point of €800/t, a target most companies are likely to pursue in February. Should this level remain unattained, various sources indicate that tube capacity reductions could be required before the end of this quarter.
At present, European HRC prices have risen in contracts to an average range of €575-580/t base ex-works. The current market demand appears to be flat; however, there are expectations that buyers may resume purchasing activities in the coming days, primarily due to a lack of viable alternatives from the import market.
A mill source started offering HRC at €620/t delivered in Italy, with expectations to reach this level in the coming days.
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Assofermet asks EU not to extend safeguard measures
Italian steel trade association Assofermet is advocating for the European Commission to archive the existing safeguard measures and refrain from extending them beyond 31 December 2025.
This is to avoid any overlap with the Carbon Border Adjustment Mechanism (CBAM), which could result in further cost increases for the EU steel processing sector.
In a statement obtained by Kallanish, the association indicates that any modifications to the safeguard system should ensure that the current level of import liberalisation remains intact.
The EC should eliminate the country-specific quotas and replace them with a singular global share for each product category. To optimise the utilisation of quotas, Assofermet also recommends the implementation of a more flexible management system that permits the redistribution of unused quotas between nations at the conclusion of each quarter.
The prospect for extending or intensifying safeguard measures on imports fails to address the structural issues present in the European steel market. The ongoing lack in demand from end-user sectors cannot be resolved by additional import restrictions, the statement argues and adds that it is essential to encourage demand growth through broad economic policies, rather than relying solely on trade defence measures.
The EU steel processing sector has suffered as a result of the present safeguard in place since July 2018. The sector is facing significant challenges due to rising costs, restrictions on duty-free steel imports, and the influx of low-cost finished products from non-EU countries.
Any further safeguard revisions would introduce additional uncertainties into the entire system and supply chain.
In accordance with current EU legislation and World Trade Organisation regulations, Assofermet proposes that the safeguard legislative framework be restored to its original purpose and encourages the EC to prioritise structural solutions that boost demand and competitiveness within the European steel industry.
Last year the EC initiated an investigation to determine whether EU safeguard measures on steel imports need amending to reflect recent market developments, following a request by 13 Member States.
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Slow start to 2025 adds more uncertainty: Assofermet
January has reflected the market slackness that existed before the year-end production halts, Italian trade association Assofermet says in a market note seen by Kallanish.
In Asia, despite the weakness of the Chinese steel market, few production stoppages have happened, while India ended November with a 5.8% on-year production increase. These elevated production levels in Asia represent a significant area of concern for the global steel sector.
In response to higher production costs, European steelmakers have announced price hikes on finished longs and flats, even in the face of subdued demand, particularly from the white goods and automotive sectors. The recent coil increases are supported by the diminished interest in importing material from third countries, attributed to restrictive safeguards, anti-dumping, and anti-subsidy measures.
Market participants are closely monitoring the initial actions of the newly elected US president, Donald Trump, who has repeatedly indicated intentions to enhance customs barriers as a means of safeguarding the domestic market.
“The ghost of US tariffs promised by the next occupant of the White House significantly undermines the prospects for this first quarter… Furthermore, there is great interest in the future of Acciaierie d’Italia for which the appointed Commissioners have received purchase proposals from foreign groups and national consortiums in recent days,” the note states.
In 2024 flat products experienced the most substantial declines in volume, whereas long products observed a more pronounced decrease in average pricing. Uncertainty continues to loom over Europe, especially concerning the outlook for significant economies such as France and Germany, Assofermet concludes.
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Italian plate market stagnates
Italian heavy plate prices are currently stagnating, due to weak demand and a sluggish beginning to the year, sources tell Kallanish.
Transactions are occurring for smaller volumes, while larger clients have yet to resume their buying activities. Both the mill and distributors agree that activity is lacklustre in January.
A mill source suggests that when evaluating 2024, there was a notable slowdown in the second half. However, the results for the full year remain satisfactory as the company has not incurred any losses.
Currently, contracts for the Italian domestic market show a level of stability when compared to the end of the previous month. S275 grade transactions are currently taking place within the range of €630-640/t ex-works, with S355 trading at a premium of €20/t above that range.
Mills are attempting to uphold the price point of €650/t ex-works for S275.Booking prices for Asian-origin slab are approximately $530-540/t cfr.
The primary challenge for domestic plate producers remains the availability of Asian material at competitive prices. Monthly imports of plates from Asia into Europe have remained stable at approximately 180,000t/month last year.
A mill source indicates that domestic demand is being met by Asian producers who have established an efficient distribution network in Europe, facilitating the sale of vessels containing both small and large orders of material.
Asian producers have effectively shifted the quotas they lost on coils to plates, subsequently boosting their plate exports to Europe at competitive pricing, according to the source.
“We are unable to compete with their low pricing structure. Our processing costs are at a minimum three times greater than those of Asian steelmakers” he states and anticipates that developments will occur this year, as the European Union is expected to announce a safeguard review by the conclusion of the first quarter.
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Joint venture between Marcegaglia Steel and Manni Group is now operational
Marcegaglia Steel and Manni Group have officially finalized their joint venture, creating a new entity focused on insulated and sectional door panels.
Following European Commission approval, the venture is now the second-largest panel producer in Europe, with operations in over 70 countries, projected revenue of €500 million, and nearly 700 employees.
The agreement involves Marcegaglia contributing Italian and Polish production facilities to Isopan Spa, with both companies holding a 50% stake. Operating under the ISOPAN and MARCEGAGLIA RWD brands, the joint venture includes 16 production lines across Italy, Spain, Romania, Poland, and Mexico.
The partnership aims to drive innovation, sustainability, and decarbonization in construction, leveraging their combined expertise and global reach. Leaders from both companies emphasized the collaboration’s potential to deliver advanced, efficient, and sustainable building solutions, cementing their roles as key players in the international construction market.
Source: marcegaglia.com
Italian rebar prices tick up further despite quiet
Some Italian rebar producers are initiating discussions regarding a potential price increase of approximately €20/tonne ($20.6) for deliveries in January, effective next week, Kallanish hears.
Mills previously raised values in December, just before temporarily shutting down their operations for the year-end holiday break. Since then, January asking prices have been at €340/t base ex-works. This compares with €320/t base ex-works earlier in December, which was also achieved in transactions.
Current transaction volume is limited, as buyers are exhibiting a cautious approach, opting to observe market conditions before making commitments. Two buyers, however, say they need to purchase this week.
A few contracts are reported to have been concluded at the base ex-works price of €330/t. A number of buyers are sceptical about the feasibility of an additional €20/t increase, as the €360/t threshold appears unsustainable given the current weak utilisation and pricing dynamics downstream.
Current transactions are priced at €590/t ex-works, including size extras averaging at approximately €260/t. Domestic mesh contracts are also increasing to €430/t, excluding transportation costs – size extras are an additional €300/t, according to sources.
Subdued sales activity continues this week. A rebar seller anticipates the price range of €330-340/t will consolidate next week before contract values progressively rise to a base of €360/t ex-works.
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Italian rebar makers push up prices
Several Italian rebar producers are halting sales and seeking a €20/tonne ($20.8) increase for deliveries scheduled in January. Mills have already increased values this month and will continue to deliver material until the end of this week, Kallanish notes.
Current quotes from producers are positioned at €320/t base ex-works, applicable for orders delivered by the end of this month. For contracts executed in January, asking prices are set at €340-350/t base ex-works. This indicates a significant rise from the November asking price of €300/t base ex-works.
Current transactions, for December delivery, are positioned within the €300-320/t base ex-works range. A number of rebar mills are going to cease operations by the end of this week, with some having already suspended their facilities. Activity will resume on 7 January.
Current transactions are priced within the €560-580/t ex-works range, including size extras averaging approximately at €260/t. Domestic mesh contracts are at €410-420/t, excluding transportation costs – size extras are an additional €300/t, according to sources.
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EU re-rollers increase prices on costlier HRC
Multiple Italian re-rollers, along with tube manufacturers in various European nations, are enacting price increases of €50/tonne ($52), industry sources tell Kallanis
The increase is effective immediately and is considered essential for margin recovery, given the unsustainable nature of current prices versus costs. Production costs for re-rollers are on the rise, influenced by escalating prices of hot rolled coil in Europe, coupled with additional import restrictions stemming from the EU’s safeguard measure review initiated this week.
Protectionist measures are affecting major coil processors and tubemakers, who procure substantial coil tonnages each year from third countries to meet their extensive processing requirements.
A significant number of re-rollers in Europe are expected to carry out extended production halts to align supply with demand during the holiday period.
Multiple sources confirm to Kallanish that production will cease for approximately three to four weeks. Given the present low inventory levels, the production halts are likely to result in diminished product availability, with shortages expected for specific grades.
The market is quiet after buyers finalised their purchases for December. January contract values, however, are expected to rise in accordance with the price hikes.
European HRC prices have increased in contracts to an average of €560-570/t base delivered, while derivative prices in Italy have shown stability, with tube discounts flattening on-month at 47-48 points.
ArcelorMittal is increasing coil prices by €20/t in Europe for delivery in the new year. Lead times at the steelmaker’s plants in Europe are now extended to February and March. For the few February allocations left of HRC, new asking prices are at €630/t base delivered. Prices for hot-dipped galvanised coil are also being pushed up, to €750/t base delivered.
The European Commission’s investigation will determine whether the EU safeguard measure on steel imports needs amending to reflect recent market developments, following a request by 13 Member States. The investigation will be concluded by 31 March 2025. Any resulting decision may become applicable as of the start of a new quarter – 1 April 2025 – including with a new TRQ volume.
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