Market sources indicate that uncertainties surrounding CBAM are having a direct impact on buyer behaviour, particularly slowing decision-making processes among companies planning to build inventories or enter into long-term supply agreements.
Scrap availability in Europe is reported to be below normal levels due to expectations surrounding CBAM’s implementation in 2026, providing limited upward support to scrap and flat steel prices. However, continued caution on the end-user side has prevented prices from establishing a clear upward trend.
CBAM Uncertainty Continues to Pressure Pricing and Contract Structures
According to market participants, CBAM continues to create pressure on pricing and contract negotiations. While goods will enter the EU in 2026, carbon payments are scheduled for 2027, making it difficult for importers to accurately project costs at this stage. In addition, the lack of verified, plant-level emissions data has pushed default values to the forefront of cost calculations, while fluctuations in EU ETS carbon prices have increased the risk associated with fixed-price steel contracts.
In this environment, a significant share of buyers has opted to postpone purchasing decisions until January. Although the EU CBAM Committee approved revised default and benchmark carbon intensity values on 9 December, sources say the impact on market activity has been limited. The continuation of the phased penalty mechanism—set at 10% in 2026, 20% in 2027 and 30% from 2028 onward—has reinforced the market’s cautious stance.
European Prices Remain Close to Stable Levels
As of December, flat steel prices across Europe are generally moving within a narrow range. In Germany, HRC prices are reported at €610–620 per tonne EXW, CRC at €710–720 per tonne EXW and hot-dip galvanized (HDG) at €710–735 per tonne EXW. In Italy, HRC prices are seen at €595–600 per tonne EXW, while CRC and HDG prices are reported in the €710–720 per tonne EXW range.
Market sources note that CRC prices in particular have found relative support due to tighter domestic availability and production schedules that are largely filled ahead of the year-end period. Nevertheless, high inventory levels and CBAM-related cost uncertainty continue to discourage buyers from committing to large-volume purchases, keeping price increases limited.
Import Offers Remain Competitive, but Transactions Are Limited
On the import side, prices continue to appear competitive compared with domestic European levels. Market sources report that offers for Turkish-origin hot-rolled coil to Italy are being quoted at $585–595 per tonne CFR, excluding anti-dumping duties.
Chinese-linked offers have also drawn attention, with Sumec reportedly offering hot-rolled coil to Northern Europe at $460 per tonne CFR, cold-rolled coil at $535 per tonne CFR and wire rod at $455 per tonne CFR, with shipment planned for 10 February. However, market participants stress that such low-priced import offers are being approached cautiously by buyers until CBAM-related costs become clearer, resulting in limited transaction volumes.
Market Outlook: Transaction Volumes Under Pressure
Overall, as CBAM’s definitive phase approaches, the European steel market is experiencing a slowdown in transaction volumes rather than sharp directional price movements. While many buyers prefer to wait until January and February, when cost structures are expected to become clearer, producers are focusing on maintaining supply discipline and defending current price levels.
In the short term, the European steel market is expected to continue displaying a cautious, low-volume profile, with prices fluctuating within a narrow range and only limited upside or downside movements.
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