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After a short fall in base metal prices yesterday afternoon, the market has already recovered. The reasons for this are speculative so far and, depending on the analysts’ opinion, are due to inflation fears, possible new Chinese production restrictions or oil.

In Europe, there are hot negotiations about the future of the green transformation. One question that is constantly answered indirectly, but which no one dares to say out loud: Is European steel still competitive at all?

Stainless Espresso: European steel no longer competitive?
Stainless Espresso: European steel no longer competitive?

The drop in base metal prices has already passed again

After a short drop in Base Metals yesterday afternoon, it has already calmed down again today. The trading ratio on the SHFE on Tuesday was twice as high in demand as the available supply.

Steel and stainless steel still unimpressed

Asian HRC futures and spot prices continue to trend strongly higher. SHFE HC futures are currently up 3.69% and have rallied nearly 1.5% in the spot market.

Stainless steel futures continue to show an upward trend, although here the swings are not as pronounced as in simple hot-rolled coils, and go up by about 0.4%. In the spot market, the values show hardly any changes.

Source: shfe.com.cn, lme.com, dce.com.cn

EU: Tax billions given away, but complaining at a high level

The EU Carbon Border Adjustment Mechanism, or The European Carbon Border Tax, continues to take shape. As Financial Review reports with reference to the Financial Times, the EU plans to raise up to $13 billion with CBAM.

CBAM for protection

CBAM is primarily intended to protect European steel producers and other “dirty” industries in Europe from even “dirtier” foreign imports. Initially, steel, cement and fertilizers in particular are to be protected on the road to green transformation.

Above all, European steel producers are lobbying for a rapid introduction of the Carbon Border Adjustment Mechanism.

Free ETS certificates and protection by CBAM

As the German FAZ currently reports, it has now been agreed that steel producers will not only be protected by an EU carbon border levy, but will also continue to receive free emission certificates.

This makes a mockery of the entire certificate trading system and the sense behind it, and has so far prevented a green transformation among steel manufacturers. After all, if you get everything for free, you have no need to adapt. Because nothing has happened voluntarily so far.

The German Economics Minister would prefer to pay for the entire green transformation of domestic steel producers at tax cost.

Thorsten Gerber, CEO of the Gerber Group, says: “Mr Altmaier, please just take vacation till you are replaced after the election. The damage is less then.”

EU steel makers receive billions in taxpayers’ money

In addition, the European steel makers are being generously given billions more in taxpayers’ money, as has been widely reported in the media in recent weeks and months. It’s all about green steel production projects, which have been sprouting up like mushrooms since subsidies became available. There is simply no other way for steel manufacturers to achieve the green transformation…

European steel no longer competitive on the world market

According to the FAZ, European steel is no longer competitive without CBAM and free emission certificates. In the end, then, the question remains: If European steel producers can no longer compete on the world market and are only kept alive by artificial measures, how useful can such a business model – borne at the expense of the taxpayer – be for the future of Europe?

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