According to Andreas Schneider, a German consultant from Stahlmarkt Consult, the carbon Boundary Regulation Mechanism (CBAM) will have a particular impact on the prices and availability of rolled products.
Unlike most other products, the European rolled sheet market is a consumer of slabs as a semi-finished product used by many distributors in Italy and other countries. According to Schneider, CBAM duties will be levied on both sheet metal and slab imports, which means that there will be barriers in this value chain on both channels.
"The impact of CBAM on the cost of rolled products and slabs is even more unclear than for other product groups," he tells Kallanish. He adds that the amount of the duty may vary between 100-300 euros per ton (118-354 dollars per ton).
The EU's gradual abandonment of the Russian slab until 2028 or its potential ban from July this year under the new trade regime has already led to a shift towards Asian sources. But countries like China and Indonesia will easily face non-payments of 300 euros per ton or more, which will make them unattractive.
More recently, slabs from traditional Asian suppliers, excluding the cost of CBAM, were still being sold at about $520 per ton in cfr's southern European ports (see Callanish, January 30).
Among European refiners, NLMK's subsidiaries in Belgium and Denmark are most dependent on supplies of raw materials from Russia, and they will have to gradually switch to other sources. Despite the fact that European factories have excess capacity to produce slabs in rolls, they are generally thinner and cannot be easily used for rolling thick sheets.
It is reported that European integrated production plants are attracted by low prices for Russian and Brazilian slabs. Market sources suggest that they sometimes buy slabs by import rather than using their own production, and such transactions are sometimes heard on the market, but they remain unconfirmed.
According to Schneider, "it is one of the most carefully kept secrets that[European]factories buy slabs imported from abroad."
Author: Christian Kel Germany
Kallanish.com
