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Indonesia( EUR 572 – 904 / t). This cost differential should incentivise producers in these countries to record and declare CBAM actual emissions and increase their use of stainless steel scrap to reduce their carbon footprint. Switching to scrapbased sources will reduce CBAM cost significantly. For ferritic stainless grades( CR 430), our analysis reveals an even larger gap between modelled emissions( EUR 91- 100 / t) and default values( EUR 311 / t and above). Despite ferritic grades having little or no nickel content, CBAM default values do not differentiate between austenitic and ferritic grades. This creates an additional incentive for ferritic stainless steel importers to declare CBAM actual emissions.
Short-term gain but long-term pain The definitive phase of CBAM has imposed additional financial and administrative costs on importers. With complications in declaring and verifying CO 2 emissions, importers have been forced to rely on default values. European buyers initially responded by shifting from imports to domestic supply, which increased lead times and improved capacity utilisation at European mills. This shift supported higher prices as domestic mills capitalised on declining import volumes. However, weak European demand capped price increases at EUR 40 – 50 / t monthly. We forecast continued upward price movement, supported by tightening supply until prices reach equilibrium, with CBAM-bearing imports once emission verification becomes available. Our analysis suggests that once actual CO 2 emissions can be reported, Asian stainless exports to Europe on a DDP basis will trade at a EUR 100 – 110 / t discount to European domestic prices( EXW), returning to historical levels. CBAM’ s long-term impact on the
European stainless market is likely to be negative unless the regulation extends further downstream. While rising prices will benefit domestic mills and distributors in the short term, they will inevitably shrink the addressable market as end-users reconsider their manufacturing locations. The home appliances sector has already experienced significant competitive pressure from imported products, particularly from Turkey and China.
Would you like to contribute to the next CBAM Conversation? Contact the editor at j. mcintyre @ kci-world. com to get involved.
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