NEWS&CASES
Time：2026-01-26
Class：News
EU Carbon Tax Takes Effect: ArcelorMittal Raises European Steel Prices for April Delivery
Date: January 23, 2026
Lead Paragraph
On January 23, 2026, global steel giant ArcelorMittal announced a price increase for steel products to be delivered in Europe in April, with core products such as hot-rolled coil (HRC) rising by 30 euros per ton. The price hike is mainly driven by the official implementation of the EU Carbon Border Adjustment Mechanism (CBAM). Despite the weak end-demand for steel in Europe, the surge in import costs has significantly enhanced the pricing power of local steel mills. Meanwhile, high-carbon producing countries such as Indonesia have basically lost their competitiveness in steel exports to Europe due to excessively high carbon costs, and the global steel trade pattern is accelerating its restructuring towards low carbonization.
I. Price Adjustment Details: Core Steel Products See Synchronous Increases
ArcelorMittal clearly stated in the announcement that starting from April 2026, the price of hot-rolled coil (HRC) delivered in the European region will increase by 30 euros/ton, with the adjusted quotation at 700 euros/ton. Cold-rolled coil (CRC) and hot-dip galvanized coil (HDG) will also be raised simultaneously, with the adjusted quotations reaching 830 euros/ton and 820 euros/ton respectively.
This is the second time the company has raised steel prices in the European region since mid-December 2025, and more importantly, it is the first targeted price increase by European local steel mills after the EU CBAM officially took effect on January 1, 2026. The consecutive price hikes reflect the significant changes in the cost structure and supply-demand pattern of the European steel market under the carbon tax mechanism.
II. Core Driver: Full Implementation of EU CBAM Reshapes Pricing Logic
The full entry into force of the EU Carbon Border Adjustment Mechanism (CBAM) is the fundamental background for this price adjustment. According to CBAM rules, the EU imposes carbon tariffs on six major categories of imported products including steel, and enterprises are required to make up the difference between the EU Emissions Trading System (ETS) and the carbon price of the exporting country.
Currently, the EU carbon price remains at around 80 euros/ton. At the same time, the free carbon quota for the EU steel industry will drop to 97.5% in 2026, and will be gradually reduced year by year until it is completely abolished in 2034. The dual pressure of rising carbon prices and reducing free quotas has led to a sharp increase in the carbon compliance cost of imported steel, directly breaking the original supply-demand balance and pricing logic of the European steel market, and providing local steel mills with an opportunity to transfer costs and enhance pricing power.
III. Market Game: Spot Prices Lag Behind Targets, Convergence Expected
It is worth noting that despite the obvious price increase by ArcelorMittal, the terminal demand for steel in the European market has not recovered simultaneously. Data shows that the current spot transaction price of hot-rolled coil in the Nordic region remains between 630-640 euros/ton, which is still 60-70 euros/ton away from ArcelorMittal's target quotation of 700 euros/ton.
This price gap reflects the resistance of downstream buyers (such as construction and machinery enterprises) to price hikes not driven by demand. However, with the approaching renewal of the EU steel import safeguard measures in July 2026, the market's expectation of tighter import quotas is increasing. Industry insiders generally predict that as imported high-carbon steel resources are gradually squeezed out, the supply of local steel in Europe will become relatively tight, and the spot price will gradually converge to the target price set by steel mills.
IV. Carbon Cost Differentiation: Indonesia Hardest Hit, Order Shifts Accelerate
The implementation of CBAM has led to significant differences in carbon costs among global steel exporting countries, and Indonesia has become the most severely affected country. Specific data shows that Indonesia's steel production is dominated by the blast furnace route (accounting for more than 90%), and its energy structure is highly dependent on thermal power (with a dependence rate of nearly 100%), resulting in carbon emission intensity far exceeding the EU benchmark value.
The carbon cost of Indonesia's steel exports to Europe is as high as 604.9 euros/ton, which is much higher than China's 161.14 euros/ton. The excessively high carbon cost has made Indonesia basically lose its price competitiveness in the European steel market. At present, Indonesia's European steel export orders are accelerating to shift to countries with more mature low-carbon paths such as China and Turkey, which have certain advantages in carbon cost control and compliance capabilities.
V. Industry Outlook: Global Steel Enters the Era of "Carbon Cost Pricing"
Industry analysts believe that ArcelorMittal's price hike this time is not an isolated incident, but a symbolic signal that the global steel industry has officially entered the era of "carbon cost pricing". In the future, the pricing model of steel products will shift from the traditional dual-driver of "supply-demand + raw materials" to a three-driver model of "supply-demand + raw materials + carbon costs".
In the European market, a "low-carbon premium" will gradually form. Steel products produced by low-carbon processes such as electric arc furnace (EAF) and green power will gain stronger market competitiveness. For major global steel exporting countries such as China, it is necessary to accelerate the optimization of export product structure, improve the full-life-cycle carbon footprint tracing system, and increase investment in low-carbon technologies such as hydrogen-based shaft furnaces and electric arc furnaces, so as to effectively respond to the compliance and cost pressures brought by the global carbon tariff mechanism and maintain long-term export competitiveness.