CBAM Uncertainty Drives Northern Europe Coil Price Stabilization

CBAM Uncertainty Boosts Coil Price Stability in Northern Europe

Steel prices in Northern Europe remain under pressure. Weak demand continues to prevent a meaningful price recovery. However, the EU’s Carbon Border Adjustment Mechanism (CBAM) and tighter import safeguards are shifting market sentiment. Mills are maintaining summer shutdowns and cutting output. These supply-side limits and regulatory risks are now stabilizing prices.

Coil prices in Belgium, France, Germany, and the UK held steady this month. This came despite two ArcelorMittal price hikes totaling €50 per tonne. Sales have slowed sharply, and most mills paused production for two to three weeks. Some producers plan longer-term cuts to address low domestic demand. Delivery lead times now extend to October or November for some galvanized coil sizes, signaling tighter supply.

Importers face growing uncertainty from upcoming CBAM taxes set for January 1, 2026. Suppliers from Indonesia and South Korea now offer “free on truck” delivery to offset unknown CBAM costs. Some even offer to cover those costs directly. European banks are also introducing hedge products to manage CBAM risk. The UK’s stricter import quotas add more pressure. Large volumes of galvanized coil remain stuck at ports, delayed until October clearance.

Automotive Sector Weakness Limits Coil Price Growth

The European automotive sector continues to drag down steel demand. Chinese electric vehicles are gaining market share, despite EU tariffs.
Sales rose 91% year-on-year in H1 2025, reaching 347,135 units, according to Jato Dynamics. Eurofer expects a 2.6% drop in EU vehicle output this year. This follows a 9.7% decline in 2024.

UK car production is also falling. By June, output was down 7.3% year-to-date, the lowest since 1953. Steelmakers depend heavily on automotive contracts to protect margins. As contract talks with OEMs near, mills are hoping stabilized prices will help negotiations.
Still, Asian hot rolled coil is £50 per tonne cheaper than EU material. UK stockholders also report high cold rolled coil inventories. These factors limit the potential for significant price increases.

SuperMetalPrice Commentary:

CBAM is no longer a distant policy—it now drives real market decisions. Despite soft demand, especially from auto and construction sectors, policy risk is holding prices steady. This may offer EU mills a short-term chance to rebuild margins. But sustainable recovery will depend on fresh demand from infrastructure, energy, or industrial sectors. Without it, price stability could prove temporary.