I. Core Policy Dynamics: EU Carbon Tariff Officially Takes Effect, Accelerating the Restructuring of Global Trade Rules
January 19, 2026 China/EU: Since the EU Carbon Border Adjustment Mechanism (CBAM, carbon tariff) officially entered the charging period on January 1, the first-week effects have continued to ferment, placing significant cost and compliance pressures on Chinese steel enterprises exporting to the EU. According to calculations by the Green Innovation and Development Institute, under the EU's current default carbon emission rules, the CBAM cost for approximately 95% of China's steel exports to the EU will exceed 800 yuan/ton. Moreover, during the transition period from 2026 to 2028, the default value will increase by a 10% "surcharge" penalty annually, leading to an average annual cost increase of 22% for enterprises. Currently, the EU does not recognize China's Green Electricity Certificate (GEC) system, making it difficult for domestic steel mills' emission reduction efforts through green electricity usage to be acknowledged in carbon accounting. Coupled with the complex carbon footprint tracing process, some orders have experienced delivery delays. In addition, the EU plans to expand the scope of CBAM coverage to 180 types of steel-intensive components and end products by 2028, at which point the impact will extend from basic steel to downstream manufacturing industries.
January 19, 2026 Asian Region: S&P Global released a report stating that the Asian steel market will be under dual pressure from policy uncertainty and global overcapacity in the first quarter. In addition to the EU CBAM, policies such as China's steel export licensing management scheme, India's final determination of safeguard tariffs on non-alloy and alloy steel plates, and the EU's plan to reduce tariff exemption quotas and increase out-of-quota tariffs have led to a decline in market transaction activity. Steel goods originally destined for the EU are gradually being diverted to alternative markets such as Southeast Asia and the Middle East, resulting in significant adjustments in regional trade flows.
II. Market Trends: Asian Hot-Rolled Coil Prices Under Pressure, European and American Markets Show Divergent Ups and Downs
January 19, 2026 Global Comprehensive Report: The international steel market has shown significant regional differentiation at the start of the first quarter of 2026. Hot-rolled coil (HRC) prices in Asia continue to be under downward pressure, while European and American markets are trapped in a pattern of mixed ups and downs. Trade policy adjustments and imbalances between supply and demand have become the core factors driving price fluctuations.
In the Asian market, hot-rolled coil (HRC), as a core steel product, is facing dual pressure from intensified export competition and weak domestic demand, with downward price pressure persisting throughout the first quarter. According to the latest monitoring data from S&P Global, HRC quotes in major Asian markets have fallen by 3%-5% compared with the end of 2025, and the proportion of transactions involving low-price resources in some regions has increased significantly. Analysts point out that on the domestic demand side, the recovery rhythm of the manufacturing industry in major Asian economies has slowed down, and steel demand from downstream industries such as automobiles and machinery has been lower than expected, directly dragging down the steel digestion rate. On the export side, affected by multiple policies, after the official entry into force of the EU CBAM, a large number of Asian steel goods originally destined for the EU have been diverted to alternative markets such as Southeast Asia and the Middle East, leading to fierce export competition within the region. Among them, to digest domestic overcapacity, Indian steel mills have recently continued to increase HRC exports to the Southeast Asian market, with some order quotes 10-15 US dollars/ton lower than similar Chinese products, further intensifying price competition pressure in the Asian market.
In addition, the implementation of China's steel export licensing management policy has restricted the export of some low-value-added steel products, forcing enterprises to adjust their product structure, which has caused certain disturbances to the market supply rhythm in the short term.
European and American markets have shown obvious differentiation. The US steel market prices have continued to rise, while the EU market has seen mixed ups and downs. In the United States, as of January 9, the ex-factory price of HRC in Midwest steel mills was quoted at 1,040 US dollars/ton, an increase of 45 US dollars/ton from the previous week, with a single-week increase of 4.5%; the ex-factory price of cold-rolled coil also rose by 20 US dollars/ton to 1,190 US dollars/ton. The core driver of the price increase comes from the continuous intensification of trade protection policies. The Trump administration previously raised the import tariff on steel to 50%, effectively curbing the inflow of imported resources and gradually widening the domestic market supply gap.
Although there is still room for improvement in the capacity utilization rate of US domestic steel enterprises, the shortage of supply of some high-end steel products cannot be resolved in the short term. Coupled with the growth in non-residential construction steel demand driven by the expectation of manufacturing reshoring, it has jointly supported the upward trend of steel prices. Market feedback shows that US domestic steel enterprises have recently had a good order intake, and some enterprises have begun to raise quotes for subsequent orders.
The EU market has shown structural ups and downs. As of January 9, HRC and cold-rolled coil quotes were 730 US dollars/ton and 845 US dollars/ton respectively, both slightly down by 5 US dollars/ton from the previous week, a decrease of about 0.7%; while medium plate quotes rose against the trend by 15 US dollars/ton to 800 US dollars/ton, and rebar quotes fell by 5 US dollars/ton to 680 US dollars/ton. Industry insiders analyze that the divergent ups and downs of EU steel prices are mainly affected by multiple factors on both the supply and demand sides: on the one hand, after the entry into force of the carbon tariff, the export cost of high-emission steel products has increased, forcing some small and medium-sized steel mills to reduce production capacity, which has supported the prices of high-end products such as medium plates to a certain extent; on the other hand, the recovery of the European manufacturing industry is weak, steel demand from industries such as automobiles and home appliances is sluggish, and coupled with the inflow of low-price Asian resources through re-export trade, it has put pressure on the prices of general-purpose products such as HRC and cold-rolled coil. In addition, the EU's expected policy of reducing tariff exemption quotas and increasing out-of-quota tariffs has also kept market transaction activity at a low level, with strong wait-and-see sentiment among enterprises.
Overall, the regional differentiation pattern of the international steel market will continue in the short term. It is difficult to significantly alleviate the downward price pressure in the Asian market, while the European and American markets will be dominated by factors such as policy adjustments and the rhythm of demand recovery, with increased risks of price fluctuations. S&P Global predicts that in the second quarter, as the global supply chain gradually adapts to policy changes, the release of demand in some alternative markets may help ease the pressure on the Asian market, but the overall supply-demand imbalance still needs long-term attention.
III. Enterprise Dynamics: Intensive Landing of Cross-Border Cooperation and Capacity Upgrading
January 19, 2026 India: India's Inox Air Products has won a contract from Tata Steel's Meramandali Steel Rolling Mill to build two air separation units, which will ensure stable gas supply during the steel rolling production process and help improve production efficiency. In addition, Indian steel mills continue to increase their overseas market layout, trying to transfer domestic overcapacity through exports, and Southeast Asia has become the core target market for their HRC exports.
January 13-19, 2026 Europe: European steel enterprises have recently carried out frequent cooperation and merger and acquisition activities. On January 13, Germany's Saarstahl announced the acquisition of FN Steel, further strengthening its market position in the special steel sector; on January 12, Thyssenkrupp Materials Processing Europe signed a multi-year steel supply agreement with Sweden's Stegra, under which it will purchase steel from Stegra's plant in Boden; on January 7, ArcelorMittal signed a long-term nuclear power supply contract with France's Electricité de France (EDF) to provide stable power support for its steel mills in France and reduce the risk of energy cost fluctuations.
January 9, 2026 Finland: Finland's Outokumpu Steel and Norway's Norsk e-fuel have launched a cooperation to convert carbon by-products generated in the steel production process into sustainable aviation fuel (eSAF). It is expected to reduce carbon emissions by 200,000 tons annually, realize the resource utilization of carbon by-products in the steel industry, and provide a new path for low-carbon transformation.
IV. Other Important Dynamics
January 20, 2026 US/EU: After the Trump administration issued tariff threats, the European Parliament stated that it would suspend trade agreement negotiations between the EU and the United States. The EU is also considering taking 93 billion euros of countermeasures against the United States. If trade frictions escalate, it will further affect the global trade flow of steel and steel-containing products.
January 6, 2026 United States: United States Steel Corporation (US Steel) approved a 350 million US dollar blast furnace overhaul project, which will replace the lining of one blast furnace at its Gary plant in Indiana. The aim is to improve equipment operation efficiency, reduce energy consumption, and ensure stable production capacity output.
