Contract prices for rolled steel products in Italy are expected to continue to rise due to higher slab purchase costs associated with the Carbon Boundary Regulation Mechanism (CBAM), according to Callanish.
After the Christmas holidays, market activity is gradually recovering, and manufacturers assess sales and price levels as satisfactory. The deadlines for completing orders have now been extended to the end of February, while import offers currently have no impact on the domestic market.
Factory sources say that the possibility of further price increases is being considered this month due to uncertainty about the costs of slabs related to CBAM, which are still difficult to quantify. Asian suppliers are currently unable to announce actual emission values because the European Union has not yet published a list of accredited inspectors. As a result, all suppliers declare default values, leaving the factories to assess the effective load on CBAM themselves.
"We are working blindly," says one of the sources at the plant. "At the moment, we treat all suppliers as default manufacturers and adjust prices in the hope that their increase will cover the total cost of slabs, including CBAM. Only next year will we find out if we did a good job."
There is a growing interest in the Brazilian slab, the cost of which is expected to be relatively low and will amount to about 20-30 euros per ton (23.37-35.06 US dollars per ton). However, Brazil's slab production capacity is limited. The Tubaran plant, part of the ArcelorMittal Group, is expected to supply slabs internally.
Moreover, sources warn that slab manufacturers who incur lower costs for CBAM are likely to raise prices significantly. This will put European sheet metal distributors in a difficult position, as they will put up with increased costs without having confidence about subsequent consumption and whether consumers will accept this increase.
"The supply of slabs from Brazil will be insignificant or will not be carried out at all," says another source, adding that if suppliers do not confirm the actual cost, the responsibility for the cost of CBAM will fall entirely on the buyer. Based on the latest EU documentation, the cost of the Chinese CBAM slab is estimated at about 160 euros per ton, while the cost of the Indian material may be about 300 euros per ton or slightly less. The cost of an Indonesian CBAM will be completely prohibitive.
Currently, the quotations of Italian factories are 700 euros per ton of S235 sheet, with premiums
