CBAM Impact on NW EU HRC Imports: Traders Offer Discounts

Traders Discount NW EU HRC Amid CBAM Uncertainty

European hot-rolled coil (HRC) traders are offering imported material at discounts to the North EU HRC index. This reflects expectations that the carbon border adjustment mechanism (CBAM) may not apply default values for all shipments. Indian HRC was offered at €470/t, below April’s CME contract price of €665/t, implying traders anticipate lower carbon costs. Meanwhile, Indonesian HRC offers also suggested traders expect to avoid default CBAM fees.

Domestic mills in NW Europe may retain a premium over imports as CBAM raises entry costs. Buyers at recent Eurometal conferences indicated that certain domestic mills could effectively set the marginal price. As a result, importers and traders increasingly price deliveries on delivered duty paid (DDP) terms to mitigate duty and CBAM risk.

Rising DDP Offers and Trading Volumes Signal Market Shifts

DDP HRC offers have increased to €600–620/t, up from €570/t a few weeks ago. This surge follows leaked CBAM guidance and expected price increases in early 2026. A 15,000t deal traded at €684/t for Q4 2026 on CME Group’s North EU HRC contract, demonstrating high demand. Trading volumes have spiked, with 36,700t exchanged in three days compared to 41,000t in the prior week. These moves highlight the market adapting to CBAM complexities and pricing pressures.

SuperMetalPrice Commentary:

CBAM continues to reshape NW EU steel markets, incentivizing DDP trading and emphasizing domestic premium retention. Traders’ discounting strategies reveal confidence in avoiding default carbon fees, yet they signal growing operational complexity. Steel buyers must closely monitor CBAM updates, as compliance costs and DDP pricing will increasingly influence margins and import competitiveness.