Speaking during a panel session on the final day of the Spring SteelOrbis 2026 conference and the 94th IREPAS meeting, held in Amsterdam on April 26-28, Wilhelm Alf, director of Duferco and chairman of the traders' committee, shared the committee's assessment of current market conditions, highlighting weakening demand, regulatory pressures and rising geopolitical risks.
According to the committee, crude steel production in B China reached about 960 million tons in 2025, while data for the first quarter of 2026 indicates that production may continue to decline or, at best, remain stable with no clear signs of growth. In China, the sharpest decline was seen in the fittings segment, where production fell 12 percent, reflecting the ongoing slowdown in the construction sector. The only improvement in China was a rise in iron ore inventories of more than 10 percent, largely driven by strategic stockpile builds, highlighting the mismatch between commodity positioning and weak end-user demand.
This demand weakness is particularly evident in Europe, where the overall economic outlook remains poor. Government spending is increasingly being redirected towards defense and social support rather than infrastructure, especially in Germany, limiting the potential for a recovery in steel consumption. The committee also noted that existing production capacity in the EU continues to exceed demand, noting that even extended production stoppages by major producers have not had a noticeable impact on the market.
CBAM and safeguard measures increase pressure on trade
The implementation of the EU Carbon Border Mechanism (CBAM) remains a key challenge for traders. The Committee Chair stressed that in the current environment, traders are advised to use default emissions values when calculating CBAM costs to avoid risks, although this approach increases risks. Uncertainty around calculation methods and verification procedures continues to complicate transactions, making it necessary to involve manufacturers and clearly define contract terms.
In addition, recent changes to the EU's safeguard system have added additional pressure. Quotas have been cut by almost 50 percent, and out-of-quota duties could rise by up to 50 percent. Market participants criticized the lack of country-specific quota adjustments, even if suppliers had not supplied material for an extended period of time. As a result, some parts of the quota system remain effectively unusable, further reducing supply and negatively
