Importers warn that the default cost of CBAM is approaching 300 euros per ton.
Initial data on the latest CBAM benchmarks leaked last week suggests that the default values could become prohibitively high, leading to higher costs of up to 300 euros per ton ($350.62 per ton), several roll importers told Kallanish.
Despite the complexity of the calculation, sources claim that the actual cost parameters will be "acceptable" if they are confirmed. Importing hot-rolled coils from low-emission Asian plants is estimated to cost 30-60 euros per ton in CBAM fees.
Buyers note that all default values have been raised, including for countries that were previously considered undervalued, such as China and Thailand. "The revised document does not change the system, but complicates its calculation," says the source. The actual values remain low at 0.044 for hot rolled coils, while the standard values are 0.072 for scrap manufacturers and 1.37 for blast furnace operators.
Importers budget 60-70 euros per ton to continue purchases in Asia. A source at the plant warns that the process of declaring emissions can be extremely lengthy, while another buyer highlights the uncertainty caused by the lack of a confirmed list of accredited inspectors.
Asian rolled metal continues to arrive in Europe, but at a slower pace as earlier orders arrive at southern and northern ports. The Indian company HRC is expected to suffer the most serious losses due to its coal production, although costs vary depending on the enterprise. An Indian supplier offers HRC to Southern Europe at a price of about 510 euros per ton of cfr, and the estimated cost of CBAM will be 92-93 euros per ton.
The tonnage of Indian and Indonesian coils remains competitive, but customs clearance and quota restrictions remain the main obstacle to imports, according to the service center.
Meanwhile, roll prices in Europe continue to rise. HRC is sold at a price of 600-630 euros per ton from the factory, while prices for cold-rolled and hot-dip galvanized coils with delivery to Belgium, France and Italy are rising to 730-750 euros per ton. Prices in Poland remain lower and amount to about 720 euros per ton. It is reported that the German plant, which offers supplies for HDG and CRC at a price of 730-740 euros per ton, is having difficulty securing orders.
"I think the market will rebalance by the second quarter," the source said. "Traders will gain clarity on CBAM costs in the first quarter, and visibility will improve."
Author: Natalia Capra France
Kallanish.com