LME WEEK: Steel imports slow down due to CBAM, "green" premiums fragmented

Steel import business in the EU is slowing down due to the introduction of a carbon control border mechanism acting as a trade barrier, with CBAM costs expected to range from 10 to 250 euros per tonne, said Gavin Steele, carbon specialist at the European Steel Trading House Duferco. 15.

"Our import volumes, which we import or plan to import in the next quarter of next year, decreased significantly compared to the same period last year, solely because Duferco is a risk-conservative company," Steele said.

At the Metals Sustainability conference at the Metals Forum during the week, LME Steel stated that CBAM would be more of a trade barrier than an environmental policy, judging by how it would be adopted.

"I'm not sure if this was done on purpose or because of the difficulties the EU is facing," he said.

The steel industry still needs the most important CBAM benchmarks, the CO2 concentration thresholds used to calculate the carbon boundary tax. Earlier in October, the European Commission announced that the publication of these data would be postponed.

Responding to a question from Platts about what the trading strategy looks like against the background of insufficient information about CBAM costs, Steele said that imports from the Far East will begin in 2026, before the final stage of procurement. CBAM launches on January 1st, now closed.

"It's difficult to keep working, retaining customers, supplying the materials we need, when we're not sure what price we can guarantee them," he said, adding that Duferco is currently considering the possibility of distributing CBAM costs between the manufacturer and the customer, as well as the terms of the contract that leave room. for negotiations, as soon as the costs become known. He also said that Duferco hedges the cost of carbon emissions as a form of risk mitigation.

Anna Gastmaier, a climate specialist at the Brazilian company miner Vale, said during the discussion that the EU CBAM has proven to be a driving force for other countries to implement emissions trading systems, and said it would be a "breakthrough." victory" for the European Commission.

"The national ETS system in China is expanding at the expense of sectors influenced by CBAM, or, for example, in Indonesia, Turkey. And you do see in the documentation published by various national authorities that they often explicitly refer to CBAM as one of the reasons why the scope of application remains the way it is," she said. "So it certainly drives up global carbon prices around the world."

Development of "green"