European and UK steel markets will face challenges in 2026: demand is weak, prices are being tested
In the UK and EU markets, where price pressures from CBAM are steadily increasing, the expected reduction in supplies by 2026, along with a reduction in imports, points to faster price growth in the medium term. However, the current order flow remains cautious.
While interest in "green" steel in the European steel sector is seen as a strategic focus for the coming years in the face of increasing pressure, buyer interest remains low in the current market environment. Companies believe that the transition to a green economy will accelerate only when free emissions quotas are reduced, and most buyers are reluctant to incur additional costs in today's weak demand. It should be noted that only project users with special budgets may prefer to pay a surcharge, while a reasonable range of allowances for green HRC is 50-80 euros per ton.
Imports in the UK market are expected to decrease significantly due to CBAM and new protectionist measures coming into force in 2026. With additional tariffs of 30-130 pounds per ton, a 50% reduction in quotas and an increase in import penalties in excess of quotas, the EU and the UK could recover 18-20 million tons of lost business. It is expected that in the short term, prices may rise to 80 pounds per ton, and by 2026 they may exceed 200 pounds per ton.
The growing uncertainty around CBAM, the reorientation of buyers to European sources, the reduction of supplies from Asia and the cautious behavior of importers indicate a serious reduction in supplies by 2026. Manufacturers will continue to raise prices in the short term, but growing purchases in the domestic market may quickly lead to a narrowing of the market. Service centers prefer to have large inventories and warn that prices can be adjusted quickly in response to changes in the market.
Regarding prices, suppliers in European countries have recently made limited attempts to raise prices, but buyers are still very resistant to these efforts. Weak demand creates conditions in which prices are simply put to the test.
In Germany, prices are 615 euros per ton of hot-rolled roll (HRC), 710 euros per ton of cold-rolled roll (CRC), 710-715 euros per ton of galvanized rolled products, 685 euros per ton of rolled products, 600 euros per ton of rebar price and 585-600 euros per ton of wire rod. Despite small attempts by manufacturers to raise prices, buyers did not back down, which indicates that there is no upward pressure on the market.
A similar pattern is observed in Italy: HRC - 605 euros