Steel mills and stockbrokers in Northern Europe fear that demand will not support the increase in the cost of coils until the end of 2025, since CBAM is the only price incentive for the market.
Despite the recent interest rate cuts in the EU and the UK, despite the positive mood regarding the German government's plans to invest in infrastructure and defense, sentiment remained negative this month.
The prices of MEPs in Belgium, France, Germany and the UK did not change compared to the previous month. And this is despite two price increases on the ArcelorMittal price list totaling 50 euros per ton.
Sales have stalled, and most factories have suspended maintenance for two to three weeks during the summer holidays. Some of Europe's largest steel companies are cutting production in the long term.
Lower production at domestic factories and higher supply prices may have mitigated the downturn, which saw prices in the Northern part of the EU reach their lowest levels this year. Buyers in France said prices bottomed out in mid-July and then rose moderately. They add that the delivery time of galvanized coils of certain sizes to EU plants has increased until October or November, which may help to stabilize prices for this product.
Importers' uncertainty is increasing
Uncertainty about the cost of the new CBAM taxes, which will take effect on January 1, and the future of EU import protections that are holding back the import market. All interviewed MEPs in the EU expect these factors to become the main source of upward price pressure in the coming months.
German importers report that suppliers in Indonesia and South Korea are starting to offer delivery terms "free on trucks" or to cover as yet unknown costs from CBAM taxes. In addition, some European banks are currently offering CBAM insurance measures.
The UK government's tightening of protective import quotas has led, in particular, to an increase in duties on galvanized coils. Large volumes of galvanized coil are currently in UK docks awaiting customs clearance in October.
Shipments of hot-rolled coils of Asian origin to the UK cost about 50 pounds per ton cheaper than similar goods in the EU. In addition, British shareholders have large reserves of cold-rolled steel.
The automotive sector is experiencing a downturn
Demand from highly profitable projects supports sales in some warehouses in Belgium and the UK.
