Speaking at a panel session on the last day of the SteelOrbis 2026 Spring Conference and the 94th IREPAS Conference held in Amsterdam on April 26-28, Wilhelm Alff, director of Duferco and Chairman of the Traders' committee, shared the committee's assessment of current market conditions, highlighting weakening demand and regulatory pressure. and the growing geopolitical risks.
According to the committee, China's crude steel production reached approximately 960 million tons in 2025, while data for the first quarter of 2026 indicate that production could decline further or, at best, remain stable, with no obvious signs of growth. In China, the sharpest drop was observed in the rebar segment, with production declining by 12 percent, reflecting the ongoing decline in the construction sector. The only improvement in China was an increase in iron ore reserves of more than 10%, mainly due to the strategic build-up of reserves, which highlights the mismatch between the positioning of raw materials and weak end-user demand.
This decrease in demand is particularly noticeable in Europe, where the overall economic outlook remains unfavorable. Government spending is increasingly being redirected to defense and social support rather than infrastructure, especially in Germany, which limits the potential for a recovery in steel consumption. The Committee also noted that existing production facilities in the EU continue to exceed demand, noting that even prolonged production shutdowns by major manufacturers have had little impact on the market.
CBAM and protective measures increase pressure on trade
The key problem for traders remains the implementation of the Mechanism for Regulating Carbon Dioxide Emissions at the EU border (CBAM). The Chairman of the committee stressed that in the current circumstances, traders are advised to use default emission values when calculating CBAM costs in order to avoid risks, although this approach increases the risk of costs. Uncertainty related to settlement methods and verification procedures continues to complicate transactions, making it necessary to involve manufacturers and clearly define the terms of contracts.
In addition, recent changes in the EU guarantee system have increased the pressure. Quotas have been reduced by almost 50%, while duties exceeding the established quotas may rise to 50%. Market participants criticized the lack of quota adjustments for specific countries, even in cases where suppliers had not supplied materials for a long time. As a result, some elements of the quota system remain virtually unusable, further reducing supply.
