EU Stainless Steel Scrap Market Eyes Recovery Amid CBAM Shift
Stainless steel scrap prices across the EU may rebound by late 2025 as CBAM (Carbon Border Adjustment Mechanism) reshapes import economics. Grade 304 stainless steel scrap prices dropped 7.4% in the first half of 2025 and 22.6% year-on-year in June. These figures highlight a multi-year low, triggered by weak demand, trade friction, and cheap alternative inputs.
However, the carbon emissions taxes set to take effect in 2026 are already altering market behavior. The European Commission plans to tax emissions on imported semi-finished stainless products like slab and billet from January 2026, under CBAM. These charges, though deferred until 2027, aim to reduce unfair competition from low-cost, high-emission imports—especially from Asia and Indonesia. This shift makes stainless steel scrap more attractive due to its exemption from CBAM.
Meanwhile, Europe’s mills face high energy prices and narrow margins. This has driven increased imports of stainless steel slab, particularly from Indonesia and the UK. ISSB reports show a 43.6% year-on-year rise in stainless slab imports into the EU in early 2025. Italy has become a major entry point for Indonesian slab, with imports reaching nearly 20,000 tonnes in February alone.
CBAM’s Potential to Reshape EU Scrap Pricing Strategy
CBAM could become the decisive factor driving renewed demand for EU-sourced stainless steel scrap. Since scrap lies outside the scope of CBAM, EU producers may prioritize it to avoid added emissions costs. As a result, recycling could gain a cost advantage over importing semi-finished materials. This would support a structural price recovery.
The success of this shift hinges on how effectively CBAM taxes counteract the appeal of imported slab. If emissions tariffs narrow the price gap, EU mills may reduce their reliance on rerolling foreign slabs. Instead, they might reinvest in scrap-based electric arc furnace (EAF) production. Such a strategy aligns with Europe’s decarbonization goals and supply chain resilience.
Furthermore, the European Commission is exploring energy subsidies and potential limits on scrap exports. These measures, included in the Steel and Metals Action Plan, aim to ensure domestic scrap availability and cost competitiveness. The rollout of the new “melted and poured” regulation may further strengthen market preference for locally processed steel.
SuperMetalPrice Commentary:
CBAM is poised to become a defining force in Europe’s stainless steel value chain. While prices are currently weak, structural policy shifts may rebalance the market. Scrap’s exemption from carbon tariffs offers a unique advantage in the face of rising emissions accountability. However, the true price recovery will depend on consistent demand from EU producers and credible enforcement of CBAM rules. As global trade dynamics shift, stainless scrap could become a linchpin in Europe’s green steel strategy.
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