Steel Service Centers concerned about the impact of CBAM

Last Thursday, EUROMETAL’s “SSC Arbeitskreis” (Steel Service Center Working Group) brought together industry leaders from Germany, Austria, Netherlands, and Belgium. The somber mood reflected concerns over the impact of the Carbon Border Adjustment Mechanism (CBAM) on the future of European steel processing.

Over two dozen steel executives grappled with the current economic climate – both German and global – alongside pressing issues like decarbonization, energy efficiency, workforce security, and distribution challenges. However, decarbonization, particularly CBAM, dominated the discussions.

Customers Seek Workarounds, Threatening Service Centers

Suppliers from Asia are looking for workaround solutions and are threatening European metalforming industry and service centres and ultimately also the European steel mills.

Participants at the conference reported on the fears of the forming and steel processing industry (laser and welded components) regarding the future of European steel supply chains.

Scared by the impact of CBAM, some large customers (1st tiers) are looking for external alternatives outside European borders and opting to import ready-to-use steel products, in order to circumvent the regulation.

This trend deeply worries Service Centers, especially considering the current period of moderate activity. Already facing significant investments in decarbonization and cost optimization, CBAM throws another wrench into an already challenging situation.

The Need for Collaboration

Despite the gloomy outlook, the working group highlighted the importance of ongoing dialogue and collaboration within the industry. The active participation throughout the event underscored the need for such forums to navigate the current complexities and develop solutions.

The future of European steel processing hinges on the industry’s ability to adapt to the demands of CBAM while remaining competitive. Collaboration and innovation will likely be key to weathering this storm.

Looking Ahead

The positive spirit of collaboration continued beyond the discussions. The intention to repeat the event in spring 2025 has already been announced, with the German city of Bönen as the probable location. This commitment to ongoing dialogue bodes well for the industry’s ability to navigate the challenges ahead.