CITIC to acquire Stemcor for overseas expansion
China’s CITIC Pacific Special Steel Group has announced to acquire 100% of London-based Stemcor Global Holdings, one of the world’s largest independent steel traders, through an indirect transaction completed by its wholly owned subsidiary, Kallanish notes.
The agreement was signed on 30 December following a meeting between the Guangzhou Airport Economic Zone Administrative Committee, Guangzhou Airport Industrial Investment Group, and senior executives of CITIC Pacific Special Steel.
Under the deal, Taifu Kechuang Special Steel (Shanghai), a wholly owned CITIC Pacific subsidiary, will acquire Prosperity Kingsfield Ltd at CNY 1.51 billion ($216 million) from Guangzhou Airport Industrial Investment Group, according to CITIC’s public release on Shenzhen Stock Exchange. Prosperity Kingsfield holds 100% of Stemcor Global Holdings.
The transaction will be settled entirely in cash, with 30% paid within five working days once the contract effective and the remaining 70% deposited into an escrow account at closing, to be released to the seller upon completion.
As of the announcement date, CITIC Pacific Special Steel’s main transactions with Prosperity Kingsfield and its subsidiaries in 2025 involved steel trading, totaling CNY 284.19m.
Once completed, the acquisition is expected to enhance CITIC Pacific Special Steel’s overseas market reach by leveraging Stemcor’s extensive global trading network and established local operations across Europe, the Americas, Asia-Pacific and the Middle East, the Chinese steelmaker says.
The company’s executives describe the transaction as a foundational step in building a fully integrated global operating model spanning resources, R&D, manufacturing, trading and downstream services. By integrating Stemcor’s mature trading and inventory management platform, CITIC Pacific aims to accelerate its overseas expansion while reducing reliance on traditional export channels, shifting from a product supplier to a global solutions provider in the steel industry.
According to Stemcor’s latest announcement, it sourced and delivered 2.8 million tonnes of steel and raw materials in 2024, bringing a total revenue of $1.8 billion with a gross profit of $78m in 2024.
EUROMETAL seeks inclusion of traders, distributors in trade measures
EUROMETAL has urged the European Commission to engage with member states to ensure that service centers, traders and steel distributors are included in discussions relating to trade measures, board member Julian Verden said July 17.
“EUROMETAL is fully behind the Commission’s endeavours to support the European steel industry, which we strongly believe is vital for Europe,” Verden, who is also managing director of Stemcor Europe, said during a telephone interview with Platts. “However it is not necessary that measures should go to the exclusion of imports.”
“I would suggest that the new measures that the EC is likely to put in place should be similar to the existing measures,” he said. “Some changes and reductions in volumes could be reasonable, but the EC should discuss them with us as we represent companies employing many workers and creating considerable taxes. We are happy to work to help propose optimal solutions so that the EC is not just hearing the steel producer side.”
EUROMETAL represents all operators of the steel intermediation chain.
When addressing Eurofer’s recent rumored requests for a 50% increase in safeguard duties and a reduction in quotas, Verden expressed strong reservations. He emphasized that doubling the existing 25% duty is unreasonable and would worsen the challenges faced by end customers. “We’re seeing real hardship,” he said, pointing out that the current duties are already burdensome for many in the industry. While he acknowledged that some adjustments to quotas might be warranted, he argued that a 50% reduction is unjustified, given that the market has only declined by about 15%.
The discussion also touched on the implications of the Trump administration’s tariffs, particularly regarding raw materials exports from Europe to the US. He hinted that if tariffs remain in place, they could lead to significant challenges for European traders selling to the US, particularly for pig iron and other semi-finished products, and higher costs for US steel companies, which probably lobby to lower the tariffs.
The US steel market has experienced significant volatility this year, which has largely benefited domestic raw steelmakers. The current tariff policy has supported finished steel product prices, although it has not significantly affected US producer costs.
Despite a decline in US Midwest hot-rolled coil prices from their mid-March highs, prices remain up 25% in the year to date, according to Platts pricing data.
According to the American Iron and Steel Institute, the Netherlands, the UK and Sweden are the top three exporters of scrap to the US.
Verden also raised concerns about the current challenging geopolitical climate, which is resulting in some shipping routes becoming more difficult to use, in particular after Houthi rebels attacked and sank two ships earlier in July, killing at least four seafarers after months of calm.
The Red Sea is a critical waterway for commodities shipping but traffic has dropped sharply since Houthi attacks off Yemen’s coast began in November 2023. Verden noted that while the freight market remains soft, insurance costs are increasing, pushing up operational costs for traders.
EUROMETAL 75th Anniversary: CBAM “nightmare” to soon become reality
This article is part of a series on steel distribution association EUROMETAL’s 75th Anniversary conference 2-3 July, discussing challenges and opportunities for the sector from its policy background; trade protection; the Carbon Border Adjustment Mechanism; green steel; and the evolving role of European steel distribution.
Doubtless the largest change on the horizon of the European steel industry, and for its distribution sector specifically, is the upcoming definitive phase of the Carbon Border Adjustment Mechanism (CBAM), mandating the payment of carbon duties on the embedded emissions content of imported material from January.
A majority of frustrations expressed at EUROMETAL’s 75th Anniversary concerned these incoming, and uncertain, liabilities under CBAM once it enters its definitive phase. To no one’s surprise, distributors were overwhelmingly negative, describing the instrument as – alongside more colourful language – a “nightmare by nature,” “insane,” “a fiasco” and, most illustratively: “a molotov cocktail for the entire supply chain.”
While many acknowledged the necessity of CBAM in ensuring European industry does not bear the weight of global decarbonisation alone – and welcomed last-minute, patchwork amendments such as the simplification package, plans to extend CBAM’s remit to downstream products, and possible rebates for European exporters – certain legislative or reference gaps were said to be hindering the industry’s preparations for January.
For producers, this concerns gaps in the instrument potentially incentivising carbon leakage, with Eurofer Director General Axel Eggert detailing that over 70% of the almost 30 mt – or EUR50-65bn – of European steel and steel-containing products are exported to countries without comparable climate policies.
“CBAM is at a critical point, it has the potential to save, or destroy, industry in Europe,” said Dr Henrik Adam, President of Eurofer. “But it is very easy to see how this nice cocktail could become a molotov cocktail by overconsidering technical arguments, not action.”
For distributors, a lack of clarity as to the financial burdens of CBAM, as well as arduous administrative obligations, risk overwhelming their activity and profitability.
“Decarbonisation has been taken as a mantra without proper consideration for pragmatism and competitiveness,”; said Antonio Marcegaglia, CEO of Marcegaglia. “It could now be too late.”
Foreign exporters such as Turkey largely see CBAM as an opportunity if they can predict and quickly align to EU regulatory requirements: with a high-weighting of electric-arc furnace production, and abundant solar supply; exporters in adjacent regions could see strong demand from European importers stocking green steel. However, even within Europe, incumbent producers with existing low-carbon productions have struggled to turn this advantage into green premiums, as seen in the long steel market.
Most notably, the European Commission is yet to release the benchmark Emission Trading System (ETS) values for 2026-2030, a core part of the formula dictating an importer’s exposure to European carbon costs. This leaves importing distributors in the dark as to the specific costs of importing under CBAM, with material from some origins already likely to fall liable to CBAM costs.
Speaking at the event, Managing Director of trading house STEMCOR, Julian Verden, estimated from his industry sources that the benchmark value for the blast furnace route – by which the majority of the world’s steel is produced – would be around 1.4t CO2e per tonne of steel. In attempting to pass relevant carbon costs downstream, however, Verden found that his customers were “completely unwilling” to commit to variable costs, instead insisting on a fixed price structure for purchasing that has already led STEMCOR to embed an estimated CBAM premium into recent trading – despite lacking an authoritative reference.
“The get-off-the-pot moment is quickly approaching,” said Verden, describing a rush in demand to import and customs clear international steel before CBAM duties become due in January. “This year is going to be a bit of a nightmare for us all, but I do believe we’ll make it through.”
STEMCOR estimates that, assuming a benchmark for blast-furnace route production of 1.4t CO2e/t and an EU Emissions Allowance (EUA) price of EUR76, imported steel of 2.1t of embedded CO2e would see additional costs of around EUR56/t from January – though in reality the spotlight on and greater demand for EUAs should see this increase, with McCloskey’s affiliated carbon team CAMIRO forecasting prices above EUR80 from January.
Verden quashed hopes – including his own – that CBAM could be further delayed to better map to the realities of the industry, stating that from his conversations with senior CBAM authorities the upcoming transition into the definitive stage was “basically inevitable.”
Verden’s own preference would be for a hybrid of the definitive and transitional periods, seeing the Commission publish benchmark values early alongside a flat CBAM duty for 2026 and moving to payment on verified emissions in 2027, potentially launching fully in partnership with the UK’s own version of CBAM.
Benjamin Steven Journalist, Steel
Julian Verden: Volatility and unpredictability have become the only constants in today’s commodity markets
Speaking at EUROMETAL’s 75th anniversary conference, Julian Verden, Managing Director Europe at Stemcor, shared his insights on the evolving dynamics of global steel trade, highlighting both the challenges and opportunities facing the sector.
“We’ve entered an era in global steel trade defined by price volatility, protectionism, and geopolitical tensions,” Verden stated. “The HRC price in the U.S. currently stands at $958/ton, up about $190 since the beginning of the year — a 22% increase year-over-year. While this points to a short-term recovery, we expect prices to stabilize at elevated levels over the longer term.”
Turning to Europe, Verden noted, “The HRC price in Europe is currently €576/ton, reflecting a 9% decline compared to the same period last year. CBAM implementation, demand recovery, and restocking are expected to push prices up in the long run, but weak short-term demand continues to weigh on the market.”
On China, Verden noted: “The HRC price in China is at $445/ton — down $15 from the start of the year and 14% lower year-over-year. China’s steel exports are rising; in the first five months, they exported 48.47 million tons of steel products. While this offers short-term relief for Chinese mills, it also places downward pressure on global prices. Without a recovery in domestic demand, China’s steel sector may face structural challenges.”
Verden also addressed protectionist measures: “U.S. President Trump’s decision to raise steel and aluminum tariffs to 50% is impacting markets. The UK is currently exempt, but ongoing negotiations with Mexico and Canada add uncertainty. Europe has requested exemptions from the 50% out-of-quota tariff. Meanwhile, India and Southeast Asian countries are also introducing anti-dumping measures against Chinese steel. Protectionism is forcing a new balance in global steel trade.”
Regarding geopolitical developments, Verden stated: “The Russia-Ukraine war and Iran-Israel tensions are driving up energy and freight costs. Brent crude prices have risen by 15% recently, and the Baltic Dry Index is up 17.6%. In this environment, uncertainty has become a permanent feature of the steel sector.”
On green transition efforts, Verden remarked: “CBAM is expected to add around €56 per ton in additional cost for imported steel. Europe’s low demand and shrinking margins have slowed down green steel projects. Some DRI-EAF projects have been halted. While there is green steel supply, buyer-side demand remains sluggish. However, with increased government spending and full CBAM implementation, we anticipate a rebound in both pricing and demand for green steel.”
Verden concluded his remarks by stating: “To adapt to the new era in the steel industry, we must be flexible, creative, and open to collaboration. Only then can we ensure sustainability and price stability.”
Green Steel: the building block of the future
Julian Verden, a member of the EUROMETAL Presidency Board and Managing Director of Stemcor Europe, participated in the 695th Lord Mayor’s Lecture yesterday, themed “Green Steel – The Building Block of the Future.”
In his presentation, Verden provided an overview of the steel industry, emphasizing its global importance and the challenges posed by carbon emissions. He explained the two main methods of steel production: the blast furnace, which is carbon-intensive, and the electric arc furnace (EAF), a more sustainable option that uses recycled steel scrap and cleaner energy sources.
Verden discussed the potential of green hydrogen as a fuel source in steel production, highlighting its capacity to reduce carbon emissions significantly. However, he acknowledged the challenges of scaling up hydrogen production and ensuring its availability for widespread industry use.
The discussion also addressed the role of government policies in advancing green steel initiatives. Verden emphasized the need for supportive policies and investments to facilitate the transition to low-carbon steel production.
Overall, the lecture offered valuable insights into the steel industry’s current landscape and the transformative potential of green steel in building a sustainable future:
Stemcor, Tokyo Steel launch ‘green’ steel brand
Tokyo Steel has launched a green steel brand – “enso” – in partnership with Stemcor to maintain and develop its business in Europe before the full implementation of the EU’s Carbon Border Adjustment Mechanism (CBAM), Kallanish understands.
Initially, this brand includes hot rolled coil and hot rolled plate, of which the embodied carbon emissions are approximately one third and one fifth respectively compared to “similar products from the market leading EU blast furnace producer”, the steelmaker says.
This competitor could refer to ArcelorMittal, which is constructing a new hybrid EAF in Spain to reduce CO2 emissions in Europe.
Tokyo Steel has been supplying low carbon emission HRC and HRP to European customers. This new brand shows the steelmaker’s ambition to “attain even lower levels of embodied carbon emissions” and to secure its market share as demand for lower-emission products is growing.
The steelmaker reduced the embodied carbon emissions through electric arc furnace production using scrap. In the next step, it plans an ultra-low-carbon-emission product made from 100% renewable energy, which is expected to be available later this year.
“Whilst we have had a stable export business supplying European customers who recognise the important advantages our production route brings; we decided it was important to launch the ‘enso’ brand to highlight our commitment to the circular economy and attaining even lower levels of embodied carbon emissions,” says Hisanori-Sakai, executive officer GM of international sales department at Tokyo Steel.
“Tokyo Steel will continue to work towards achieving the lowest possible levels of embodied carbon emissions with the application of proprietary technological advances and enhanced levels of renewable energy in the production process,” he adds.
A Stemcor spokesperson notes: “As society continues to build the infrastructure to achieve a greener future, steel remains the world’s most important engineering and construction material. As a result, we have been seeing a steady increase in demand from a number of European sectors for lower embodied carbon emissions steel products. Additionally, as we head closer to full implementation of the EU Carbon Border Adjustment Mechanism … companies are proactively looking to secure supply chains of these cleaner basic materials and Tokyo Steel’s ‘enso’ product range is therefore highly attractive.”
