Italian hot rolled steel (HRC) prices may receive stronger support in 2026 as the EU's carbon emissions regulation mechanism (CBAM) enters a financial phase and protective quotas are tightened, increasing the cost and complexity of supplies to third countries. The default values according to CBAM emphasize the need for suppliers to verify their emissions data, and perceptions of compliance and reliability may change import flows in the coming year.
A slight recovery in real steel consumption may increase the pressure on growth, even though buyers remain cautious after a four-year decline.
The European Steel Association Eurofer predicts that real steel consumption in the EU will grow by 1.1% in 2026, following a decline of 4.2% in 2024 and an expected 2.1% this year, driven by weak demand for automotive products. This improvement coincides with stricter import regulations: CBAM fees will vary depending on the country of origin, and quota management will become critical as volumes decrease. The origin of imported materials is likely to become increasingly important for procurement decisions. Argus is currently publishing seven differences in the origin of HRC for its assessment of cif Italy by HRC.
Low prices for CBAM and short-haul transportation may lead to increased spreads on domestic offers, while more significant discounts will be required to remain competitive on higher CBAM volumes, which will be compounded by expectations of proportional protective duties as soon as the mechanism comes into force after the introduction of protective measures.
In addition to carbon intensity and quota considerations, the ability of suppliers to demonstrate proven compliance with CBAM requirements can be a crucial factor in procurement decisions. Businesses that are considered to lack reliable internal emission reporting processes may face reduced customer confidence, while businesses with transparent systems may receive a premium. In a market where regulatory risk is increasing, reliability and preparedness are becoming cost-enhancing factors that affect differences in product origin and potentially narrow the gap between suppliers who are considered compliant and domestic offerings.
Domestic Italian factories, on the contrary, may retain premiums compared to average prices for 2025, as imports lose some of their value. because of their cost advantage and because volumes are likely to be reduced.
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