EU 2035 Car Emissions Target Faces Growing Political Divide

EU, ETS

EU 2035 car emissions target remains firmly backed by France, Spain and Sweden, while Poland is pushing for greater flexibility on vehicle rules and a slower rollout of the bloc’s emissions trading system for road transport and buildings.

EU 2035 car emissions target requires new passenger cars to reach 0g/km of CO2 from 2035. France says it has assembled enough support to block attempts to extend conventional internal combustion engine sales beyond that date.

EU 2035 car emissions target is becoming increasingly linked with industrial competitiveness. Policymakers are debating whether biofuels, e-fuels and low-carbon steel should help manufacturers meet emissions obligations without weakening overall climate targets.

The discussion also exposes widening divisions over ETS 2, electricity costs and how quickly Europe can electrify transport while preserving automotive manufacturing.

Car Rules Bring Steel, Fuels and Manufacturing Into the Debate

France, Sweden and Spain argue that weakening the 2035 target would undermine investment certainty for electric vehicles and associated supply chains.

Sweden has warned that slowing electrification could make European automakers more vulnerable against global EV competitors. Spain has also expressed concern that excessive flexibility would dilute the original target.

The European Commission has proposed allowing carbon-neutral biofuels and e-fuels to count toward up to 3% of vehicle CO2 targets.

More importantly for the metals sector, low-carbon steel credits could contribute up to 7% of manufacturers’ CO2 reduction requirements for cars and vans.

This creates a direct connection between automotive regulation and green steel demand. Carmakers using lower-emissions steel could gain additional compliance value beyond conventional material performance.

For European steel producers investing in electric arc furnaces, hydrogen-based ironmaking and lower-carbon power, such credits could create a stronger demand signal from automotive customers.

However, broader flexibility also creates policy risk. If compliance pathways become too generous, demand for battery electric vehicles could grow more slowly than expected.

That would affect not only automakers but also lithium, nickel, graphite, copper and battery manufacturing investment across Europe.

ETS 2 Reform Highlights Europe’s Cost and Competitiveness Problem

Poland is separately calling for another delay to ETS 2, which is already scheduled to begin in 2028 after being postponed from 2027.

The system will extend carbon pricing to road transport and heating fuels, potentially increasing costs for households and businesses using fossil fuels.

Warsaw is also seeking to transform the existing emissions trading system market stability reserve into a stronger price control mechanism.

The reserve currently absorbs excess allowances from the market, but Poland wants greater ability to prevent sharp carbon price increases.

Germany is taking a different approach, arguing that changes to the annual reduction rate for existing ETS allowances should only begin from 2036.

These positions show that Europe increasingly faces two competing priorities: maintaining credible decarbonisation targets while preventing carbon costs from damaging industrial competitiveness and consumer affordability.

The debate also extends beyond Europe. Turkey has proposed a global target for electricity to reach 35% of final energy consumption by 2035, reflecting the growing role of electrification in international climate policy.

For metals markets, faster electrification would support long-term demand for copper, aluminium, electrical steel and battery materials. But the pace will depend increasingly on whether Europe can manage power, carbon and manufacturing costs simultaneously.

The Metalnomist Commentary

Europe’s climate debate is shifting from whether to decarbonise toward how to distribute the industrial cost. The inclusion of low-carbon steel credits shows that automotive policy is increasingly becoming metals policy as well.

EU Ferro-Titanium Imports Rise as Russian Supply Disappears

ferro titanium

EU ferro-titanium imports climbed to their highest level in more than a year during the first quarter, supported by strong demand from steel mills and cored-wire producers. The market is also adjusting to the disappearance of direct Russian supply.

EU ferro-titanium imports reached 8,431t in January-March, up 19% from a year earlier and 13% from the previous quarter. Estonia, Poland, Latvia and the UK accounted for a combined 5,119t, or 61% of the total.

EU ferro-titanium imports are increasingly being supplied from within Europe and alternative external sources. India led non-EU suppliers with 426t, double the year-earlier level.

The market shift is significant because Russian ferro-titanium had previously supplied 2,000-3,000 t each quarter before sanctions disrupted those flows.

Russian Supply Shift Tightens European Ferro-Titanium Market

Direct Russian ferro-titanium imports into Europe effectively stopped during the first quarter following sanctions imposed on Russian ferro-alloys in late 2024.

Russian material has instead increasingly moved toward Asia. China imported a record 3,855t of Russian ferro-titanium in the first quarter, up sharply from 816t a year earlier.

This shift is changing the competitive structure of the European market. Local producers and alternative suppliers are gaining market share as buyers replace previously available Russian units.

Titanium scrap availability is also becoming more important. EU imports of Russian titanium scrap fell to only 37t during the quarter, compared with much larger flows last year.

Lower scrap availability can raise feedstock costs for ferro-titanium producers because titanium scrap remains a key raw material for standard-grade alloy production.

The combination of stronger demand and constrained scrap supply has therefore increased upward pressure on European ferro-titanium prices.

Prices Recover as Mills Compete for Available Supply

European standard-grade ferro-titanium prices averaged $4.70-4.97/kg Ti during the first quarter, below year-earlier levels but rising steadily through the period.

Prices opened the quarter at around $4.30-4.60/kg Ti and finished at $4.85-5.30/kg Ti.

The initial rally was supported by uncertainty surrounding Austrian trader LL-Resources, followed by stronger demand from steel mills under long-term contracts and spot enquiries.

Tighter titanium scrap availability added further support by increasing production costs.

Demand from cored-wire producers has also contributed to tighter physical availability as buyers compete for prompt material.

For European consumers, the market is becoming increasingly dependent on domestic production and diversified non-Russian supply.

This could create opportunities for producers in India and other regions able to provide stable ferro-titanium volumes with reliable origin and feedstock traceability.

The Metalnomist Commentary

Europe’s ferro-titanium market is being structurally reshaped by sanctions and tighter scrap availability. The advantage is shifting toward producers that can secure non-Russian titanium feedstock and provide reliable long-term supply to European steelmakers.

EU Ferro-Silicon Prices Slide as Safeguard Quotas Remain Open

Ferro-Silicon

EU ferro-silicon prices have weakened since safeguard quotas renewed in May, as abundant low-priced inventory in European warehouses reduces the need for fresh imports. Prices have fallen by 3.6% since the third safeguard period began on 18 May.

EU ferro-silicon prices were last assessed at €1,240-1,280/t delivered northwest Europe, remaining rangebound for three weeks as spot trading stayed subdued.

EU ferro-silicon prices are being held down by material imported before safeguards were introduced in November 2025. Traders continue to hold significant volumes in storage while waiting for tighter quota availability to support higher prices.

The market could tighten later in the year, but weak steel demand and the seasonal July-August slowdown are expected to limit immediate upward momentum.

Warehouse Stocks Delay the Impact of EU Safeguards

The EU safeguard system has not yet generated the price response seen in some other ferro-alloys because major ferro-silicon import quotas remain available.

Smaller allocations for countries including Brazil and the broader "other countries" category have filled, but larger quotas for Norway and Iceland remain open.

This gives buyers access to imported ferro-silicon without immediately facing punitive out-of-quota costs.

At the same time, low-cost inventory imported before the safeguard regime remains available inside Europe. These stocks reduce urgency among steelmakers and traders to secure new material.

Some suppliers have responded by withdrawing offers rather than selling at current levels. They expect prices to strengthen once quotas fill and warehouse stocks decline.

The risk for buyers is that this adjustment could happen quickly. Once quotas are exhausted, the minimum import price for ferro-silicon is set at €2,408/t.

That level is almost twice current spot prices and significantly above the €1,392/t minimum import price applied to silico-manganese.

Importers therefore face substantial downside risk if they bring in material outside quota without a corresponding increase in European market prices.

This could encourage buyers to secure lower-cost ferro-silicon before quota utilisation increases further.

Silicon Metal Emerges as a Competitive Substitute

Silicon metal is becoming a more attractive alternative for some ferro-silicon consumers seeking to avoid potential safeguard-driven price increases.

Both products can provide elemental silicon in metallurgical applications, although substitution depends on process requirements and chemistry.

Lower-cost silicon metal imports from Angola and China have increased the economic incentive to consider alternative feedstock.

This creates an unintended competitive challenge for European ferro-silicon producers. Silicon metal was examined during the safeguard investigation but was ultimately excluded from the measures.

Historically, silicon metal traded at a substantial premium to ferro-silicon. That premium has narrowed since 2022, making substitution more economically realistic.

If ferro-silicon quotas eventually fill and import costs rise sharply, the relative attractiveness of silicon metal could increase further.

The safeguard mechanism could therefore support European ferro-silicon prices while simultaneously encouraging some consumers to reduce ferro-silicon usage.

Weak steel demand remains the larger constraint. Without stronger consumption, higher import protection may improve producer pricing power but cannot guarantee higher physical sales volumes.

The Metalnomist Commentary

Europe’s ferro-silicon safeguards have not tightened the market yet because old inventory and unused quotas remain substantial. The bigger risk for producers is that a sharp safeguard-driven price increase could accelerate substitution toward silicon metal instead of simply lifting ferro-silicon margins.

EU CBAM Expansion Targets Downstream Products and Pre-Consumer Metal Scrap

EU, carbon

EU CBAM expansion has moved another step forward after member states agreed a common position covering more downstream products, pre-consumer metal scrap and stronger anti-circumvention measures.

EU CBAM expansion would push the carbon border mechanism deeper into industrial supply chains. Household appliances, industrial equipment, gas turbines and motors are among the downstream products that member states want brought into the system.

EU CBAM expansion is particularly important for metals because the mechanism already covers carbon-intensive imports including iron, steel and aluminium. Extending it downstream could increasingly influence where manufacturers source metal and how exporters document embedded emissions.

Pre-consumer scrap would also come within the proposed framework, broadening CBAM's relevance to recycled metal flows and potentially changing the economics of scrap-based production and trade.

Downstream Coverage Extends Carbon Costs Beyond Primary Metals

CBAM was initially designed around highly carbon-intensive materials such as steel, aluminium, cement, fertilizers, electricity and hydrogen.

The proposed expansion addresses a structural weakness in that model. If primary steel or aluminium imports face carbon costs while finished products containing those metals remain outside CBAM, overseas manufacturers can retain a competitive advantage over EU producers.

Including appliances, turbines, motors and other fabricated products would reduce that gap by extending carbon accounting further along the manufacturing chain.

The European Commission would also conduct annual reviews to assess whether additional downstream products should enter the mechanism.

This creates a dynamic compliance environment for exporters. Companies selling manufactured goods into Europe may increasingly need to understand not only tariff classifications but also the carbon intensity of the metals embedded in their products.

The inclusion of pre-consumer metal scrap adds another layer. Scrap generated during manufacturing could become more relevant to CBAM calculations as regulators attempt to prevent companies from using material classifications to circumvent carbon obligations.

For steel and aluminium producers, lower-carbon production routes could therefore gain additional competitive value. Electric arc furnace steel, recycled aluminium and primary metal produced with lower-emission power may become more attractive to downstream customers serving the EU market.

Suspension Mechanism Creates Debate Over Industrial Cost Pressure

EU states also support a mechanism that could temporarily suspend CBAM for specific sectors during serious and unforeseen market disruptions.

Under the proposed trigger, prices would need to remain more than 50% above their average level over the previous 10 years for at least six months.

The threshold is intended to prevent routine market volatility from weakening the mechanism while still providing an emergency option when CBAM combines with external shocks to create extreme costs.

Agriculture has become one of the most contentious areas because fertilizer prices directly affect farm production costs. European farming groups estimate CBAM could add around €820mn to agricultural costs in 2026 and argue that the proposed suspension threshold is too high.

Some members of the European Parliament have taken the opposite position and want the suspension article removed entirely. Others argue that revenue generated through fertilizer CBAM should instead be used to support farmers.

This disagreement means the current Council position is not the final framework. Member states and parliament still need to negotiate a common legal text.

For industrial companies, however, the direction is becoming clearer. CBAM is evolving beyond an upstream carbon measure into a broader trade and industrial policy covering increasingly complex manufacturing chains.

The Metalnomist Commentary

CBAM is moving from raw materials into the products manufactured from them, making embedded carbon a wider industrial competitiveness issue. The inclusion of scrap is especially important because Europe is beginning to regulate not only how metals are produced, but how recycled material moves through the value chain.

EU CBAM Changes Target Downstream Products and Anti-Circumvention Rules

EU finance ministers, CBAM

EU CBAM changes are moving toward a broader framework covering more downstream products while introducing stronger anti-circumvention measures. EU finance ministers are seeking a common position before negotiations with the European Parliament.

EU CBAM changes would expand the mechanism beyond its original focus on carbon-intensive basic materials. This could bring more manufactured products containing steel and aluminium into the system and increase compliance requirements across international supply chains.

EU CBAM changes also address one of the mechanism’s most controversial questions: whether the European Commission should be able to temporarily suspend CBAM for selected goods when extraordinary market conditions emerge.

Member states have pushed for tighter limits on that power. The latest compromise would establish specific conditions before any temporary suspension could be considered.

Downstream Expansion Tightens Carbon Leakage Protection

Extending CBAM deeper into downstream products is intended to reduce the risk that manufacturers simply relocate carbon-intensive production outside the EU and export finished goods back into the bloc.

This issue becomes more important as carbon costs increase for European steel and aluminium producers. If primary materials face carbon charges but imported manufactured products do not, downstream European manufacturers can face a competitive disadvantage.

Broader product coverage would therefore extend carbon accounting further into industrial supply chains. Exporters could increasingly need to demonstrate not only product origin but also the emissions embedded in metal-intensive manufactured goods.

Anti-circumvention measures are equally important. Companies could otherwise modify product classifications, processing routes or trade structures to reduce CBAM exposure.

For steel and aluminium markets, this means carbon compliance is gradually becoming part of ordinary procurement. Product classification, material origin and embedded emissions will increasingly influence access to the European market.

The changes could also strengthen demand for lower-carbon metals. Producers using recycled aluminium, scrap-based steel or lower-emission primary production may gain a stronger competitive position as carbon costs move downstream.

Suspension Rules Expose Cost Versus Competitiveness Tension

The proposed suspension mechanism has created disagreement among member states because broad exemptions could weaken CBAM’s effectiveness.

The latest compromise would narrow the conditions under which the European Commission could temporarily remove products from the mechanism.

One proposed trigger would require non-CBAM-related import prices to rise by more than 50% compared with the average price of the same goods during the previous 10 years. The increase would also need to persist for at least six months.

This approach attempts to reserve suspension for exceptional market disruptions rather than normal price volatility.

The debate has become particularly relevant for sectors where carbon costs could combine with external supply shocks to create sharp price increases. Fertilizers are one example, with policymakers already considering measures to protect users from excessive cost pressure.

The larger industrial question remains unresolved. CBAM is designed to protect European decarbonisation and prevent carbon leakage, but excessively high input costs can also damage the competitiveness of EU manufacturers.

Finance ministers are therefore trying to create an emergency valve without weakening the broader carbon border system.

The Metalnomist Commentary

CBAM is evolving from a carbon levy on basic materials into a wider industrial trade regime. The decisive issue will be whether Europe can prevent circumvention without creating carbon costs so high that downstream manufacturing itself moves outside the bloc.

EU CBAM Extension Could Cover 200 More Steel and Aluminium Products

CBAM

EU CBAM extension plans could widen the carbon border adjustment mechanism to around 200 additional downstream products that use significant volumes of steel and aluminium. The proposal goes beyond the European Commission’s earlier plan covering 180 product codes.

EU CBAM extension reflects growing concern that carbon leakage could shift from raw materials into manufactured goods. If downstream products remain outside the mechanism, overseas producers using higher-carbon steel or aluminium could gain a cost advantage over European manufacturers.

EU CBAM extension would therefore move the system deeper into industrial supply chains. The impact could reach fabricated steel products, aluminium-intensive components and other manufactured goods that compete directly with EU-made products.

The Council presidency also wants the list of covered customs codes to remain flexible, allowing future additions or adjustments as trade patterns and circumvention risks evolve.

Downstream Expansion Targets Carbon Leakage Beyond Raw Materials

CBAM initially focused mainly on carbon-intensive upstream materials, including iron and steel, aluminium, cement, fertilizers, electricity and hydrogen.

The next phase targets a structural weakness in that model. European manufacturers can face higher carbon costs when using domestically produced steel or aluminium, while competing imported finished products may avoid equivalent charges.

Extending CBAM downstream aims to close that gap. It would place more imported products under carbon-cost rules based on the emissions embedded in their metal content and production.

For European steel and aluminium producers, the change could strengthen demand for regional low-carbon material. Downstream manufacturers may have less incentive to substitute EU metal-intensive products with cheaper imports produced under weaker carbon constraints.

But the administrative burden could rise. Importers and overseas manufacturers will need more detailed emissions data, product classifications and supply-chain documentation.

The Council presidency is therefore trying to balance wider emissions coverage with manageable reporting requirements. Three medical-use customs codes have been proposed for removal from the expanded list, reflecting concerns over unnecessary complexity in sensitive sectors.

Aluminium and Steel Supply Chains Face Wider Compliance Pressure

The expansion could have important consequences for global metals trade. Exporters of fabricated steel and aluminium products into Europe may increasingly need to demonstrate embedded emissions and product origin.

This could influence sourcing decisions far beyond primary metal. Extrusions, fabricated components, steel structures and other downstream goods may face stronger pressure to use lower-carbon feedstock.

For aluminium producers, access to renewable electricity and recycled metal could become more valuable. For steelmakers, electric arc furnace production, scrap use and lower-carbon iron inputs could improve competitiveness.

The proposal also strengthens the role of customs classification. A continuously adjustable list of CN codes would allow the EU to respond as companies change product routes or trade patterns to avoid carbon costs.

That flexibility could make CBAM more effective, but it also increases regulatory uncertainty for exporters. Companies selling into Europe will need to track not only carbon prices but also changing product coverage.

The Council has broadly supported extending CBAM to more downstream products, although some member states have argued for a narrower approach. The final scope will therefore depend on negotiations between EU institutions.

The Metalnomist Commentary

CBAM is evolving from a raw-material carbon mechanism into a wider industrial trade tool. For steel and aluminium suppliers, competitiveness will increasingly depend on proving low-carbon production across the entire downstream value chain.

Airbus Safran Aubert & Duval Deal Deepens Control of Aerospace Speciality Metals

Aubert & Duval

Airbus Safran Aubert & Duval ownership is set to consolidate further after the two European aerospace groups agreed to acquire Tikehau Capital’s stake in the French speciality metals producer.

Airbus Safran Aubert & Duval control is strategically important because the company manufactures bars, forgings, ingots and other products from speciality steels, nickel-based superalloys and titanium. These materials are critical for aircraft engines, structural components and defence applications.

Airbus Safran Aubert & Duval ownership will be split more directly between the two industrial buyers after Tikehau’s stake is divided equally between them. The transaction remains subject to regulatory approvals.

The deal strengthens vertical control over a strategic European aerospace materials supplier at a time when aircraft manufacturers continue to face bottlenecks in forgings, superalloys and titanium components.

Aerospace Groups Secure Critical Forging and Alloy Capacity

Aubert & Duval occupies an important position between raw metal production and finished aerospace components. Its products include speciality alloy ingots, bars and forgings used in demanding high-temperature and high-strength applications.

This makes the company strategically relevant to both Airbus and Safran. Airbus needs qualified titanium, steel and superalloy products across aircraft structures and systems, while Safran depends heavily on high-performance metals for jet engine components.

Forging capacity is particularly important. Aerospace forgings require specialised equipment, long qualification cycles and tight process control, making it difficult to replace suppliers quickly when capacity tightens.

Superalloys also remain essential for hot-section engine components because they retain mechanical strength and corrosion resistance at extreme temperatures.

Titanium serves a different but equally important role. Its strength-to-weight ratio and corrosion resistance make it valuable in aircraft structures, landing gear, engine systems and other high-performance applications.

By increasing direct ownership, Airbus and Safran gain stronger influence over investment, capacity planning and production priorities at a supplier embedded deep inside their supply chains.

European Supply Security Drives Vertical Integration

Airbus, Safran and Tikehau originally acquired Aubert & Duval from Eramet in April 2023. The latest transaction moves the company even closer to its two largest strategic industrial stakeholders.

The French government also retains a special share to protect national strategic interests. That structure highlights the importance of Aubert & Duval not only to commercial aviation but also to defence and sovereign industrial capability.

The transaction reflects a wider aerospace trend toward securing critical suppliers rather than relying entirely on open-market procurement. Aircraft backlogs remain high, while qualified metals capacity has struggled to expand quickly enough in several segments.

Direct ownership can help protect investment in furnaces, forging presses, heat treatment and downstream processing. It can also improve coordination between material availability and aircraft or engine production schedules.

For Europe, this matters because aerospace supply security increasingly depends on retaining domestic capability in specialty alloys and high-value metal processing.

The transaction therefore goes beyond a financial restructuring. It strengthens Airbus and Safran’s control over one of Europe’s most strategically important producers of titanium, speciality steels and superalloys.

The Metalnomist Commentary

Airbus and Safran are treating speciality metals capacity as strategic infrastructure rather than a conventional supplier relationship. In aerospace, control over qualified titanium, superalloy and forging capacity is becoming as important as aircraft assembly itself.

EU Ferro-Titanium Imports Hit Highest Level Since 2024 as Russian Supply Dries Up

Ferro Titanium

EU ferro-titanium imports rose to their highest level in more than a year in the first quarter, supported by robust demand from steel mills and cored-wire producers. The increase also reflected a market shift as Russian receipts effectively disappeared and European suppliers captured more share.

EU ferro-titanium imports reached 8,431t in January-March, up 19% from a year earlier and 13% from the previous quarter. The total was the highest since the fourth quarter of 2024, when Russian material was still moving into the bloc in significant volumes.

EU ferro-titanium imports were concentrated in Estonia, Poland, Latvia and the UK. These destinations took a combined 5,119t, equal to 61% of the first-quarter total, up from 51% a year earlier.

The figures show how sanctions, scrap availability and steel-sector buying are reshaping the European ferro-titanium market. Demand has improved, but the supply base has changed sharply.

Sanctions Redirect Russian Ferro-Titanium Toward Asia

Russian ferro-titanium flows into Europe have effectively stopped since sanctions were imposed on Russian ferro-alloys in December 2024. That removed a major historical source of supply from the European market.

Before sanctions, the EU was still receiving 2,000-3,000 t/quarter of Russian ferro-titanium. Those flows helped lift imports to 11,661t in the fourth quarter of 2024.

Now, Russian material has shifted toward Asia. China has become the dominant buyer of Russian ferro-titanium, with imports from Russia rising to a record 3,855t in the first quarter, up from 816t a year earlier.

This shift matters because Europe still needs titanium units for steel and cored-wire production. Ferro-titanium is used to add titanium to steel, where it supports deoxidation, grain refinement and stabilisation in selected grades.

Market participants have said some Russian material may still be reaching Europe through third countries in circumvention of sanctions. That claim highlights the continuing importance of origin control, documentation and compliance in ferro-alloy trade.

Non-EU imports, excluding the UK, reached 1,388t in the first quarter, up from 1,179t a year earlier. India was the leading non-EU supplier, shipping 426t, double the year-earlier level but down 38% from the previous quarter.

Scrap Tightness Supports Ferro-Titanium Price Recovery

Titanium scrap availability became another pressure point. EU imports of unsanctioned titanium scrap from Russia fell sharply to just 37t in the first quarter, all into Germany.

This is a major change for the Baltic route. Estonia imported no Russian titanium scrap in the quarter, compared with an average of 601 t/quarter last year.

Lower scrap availability matters because titanium scrap is a key feedstock for ferro-titanium production. Tighter scrap supply can raise production costs and reduce prompt availability for alloy producers.

European standard-grade ferro-titanium prices averaged $4.70-4.97/kg Ti dp/df Rotterdam in the first quarter, down from $5.68-6.02/kg Ti a year earlier. However, the market strengthened through the quarter.

Prices opened at $4.30-4.60/kg Ti and closed at $4.85-5.30/kg Ti. The rally was initially triggered by the insolvency of Austrian trader LL-Resources, although its ferro-titanium subsidiary LLR-Ecotech said operations were unaffected.

The price rise then gained support from stronger mill demand under long-term contracts, prompt buying and quarterly spot enquiries. Tighter titanium scrap availability also added cost pressure.

The rally continued into the second quarter, suggesting that buyers remain sensitive to reduced Russian availability and constrained scrap flows.

For Europe, the key issue is not only volume. The region must secure compliant titanium units for steelmaking while avoiding sanctioned material and managing higher feedstock costs.

The first-quarter data therefore point to a more regionalised ferro-titanium market. Europe is relying more on domestic and approved suppliers, while Russian material is increasingly absorbed in Asia.

EU, Fe-Ti Import

The Metalnomist Commentary

Europe’s ferro-titanium market is becoming a compliance-driven supply chain. The real advantage will go to producers that can secure clean titanium scrap, prove origin and deliver reliable alloy supply into steel and cored-wire demand.

EU Silico-Manganese Prices Unlikely to Rally Despite Filled Quotas

Silico-Manganese

EU silico-manganese prices are unlikely to rise sharply despite the rapid exhaustion of tariff-free import quotas for Indian material and supply from other developing countries. Weak end-user demand, existing stock coverage and summer maintenance at steel mills are limiting the price impact.

EU silico-manganese prices did move higher after the third safeguard quota period opened on 18 May. Importers tried to pass duty costs through to consumers, lifting prices by €30/t on 21 May.

EU silico-manganese prices still face resistance from buyers. Many large steel consumers already secured annual contracts or imported material before the safeguards took effect, leaving limited spot demand in the market.

The result is a tighter import structure without a strong demand shock. Quota exhaustion is raising costs for importers, but it has not yet created the kind of physical shortage needed to force a major price rally.

Filled TRQs Raise Import Costs but Demand Remains Covered

Importers submitted 41,993t of Indian silico-manganese for clearance on the first day of the new quota period. That exceeded the available Indian quota of 31,959t by 10,034t.

Only 76% of the submitted Indian material was allocated inside the quota. The rest had to clear as out-of-quota material, exposing importers to higher costs under the EU safeguard mechanism.

The safeguard system combines country-specific tariff-rate quotas with a variable duty on excess imports. The duty is calculated against a price threshold, effectively creating a minimum import price.

For silico-manganese, that minimum import price is €1,392/t. This is well above the recent European delivered market assessment of €1,080-1,130/t.

That gap creates immediate pressure on traders holding out-of-quota material. One trader said the duty impact on part of his cargo would raise his average import cost by about €120/t across the full shipment.

Some suppliers have increased offers by around €50/t and are holding material while they assess market direction. But buyers are not accepting higher prices quickly because cheaper unsold units remain available in smaller volumes.

The timing also weakens the price case. European mills typically reduce activity during the summer maintenance period, lowering near-term consumption of manganese alloys.

Safeguards Shift Trade Flows While CBAM Alters Alloy Choices

The EU introduced safeguards on silico-manganese, ferro-manganese, ferro-silicon and silico-magnesium in November to protect European alloy producers from lower-cost third-country imports.

Silico-manganese has attracted more import activity than some other alloys. The quota for “other countries” was exhausted in both the second and third periods, while the current 18,956t quota was filled by 21 May.

Norway’s quota has also been closely watched. Its second-period quota was exhausted in April, but the third-period quota still had a large remaining balance as of 22 May.

Zambian material also remains available within quota. This gives importers some alternative supply routes, even as India and other-country quotas fill quickly.

Ferro-silicon and ferro-manganese quotas have not been filled. This shows that the safeguard impact is uneven across the ferro-alloy market.

CBAM is also changing trading behaviour. Silico-manganese is not subject to the Carbon Border Adjustment Mechanism, while high-carbon ferro-manganese carries additional administrative and compliance burdens.

That has made some traders more comfortable importing silico-manganese than ferro-manganese. Even when prices are close, lower bureaucracy can make silico-manganese more attractive from a trading perspective.

Ferro-manganese prices are receiving some support from CBAM-related caution, but liquidity and demand appear stronger in silico-manganese. This could keep trade flows focused on silico-manganese until buyers’ inventories fall.

The main market impact may therefore arrive in autumn. By then, end-user stocks could be lower, summer maintenance will have passed and importers may face tighter replacement costs under the safeguard regime.

The Metalnomist Commentary

The EU safeguard system is already raising import costs, but weak steel demand is preventing a sharp silico-manganese rally. The real test will come after summer, when mills return and buyers need to replace stocks under a more expensive import structure.

EU 2026 Growth Forecast Cut as Energy Shock Hits Industrial Outlook

EU energy

EU 2026 growth forecast has been cut to 1.1% as the European Commission warned that the US-Iran war has created a new energy shock, lifted inflation risk and weakened economic sentiment across the bloc.

EU 2026 growth forecast was lowered by 0.3 percentage points from the previous projection of 1.4%. The downgrade reflects the sharp rise in energy costs since late February and the renewed pressure on households, manufacturers and public finances.

EU 2026 growth forecast matters for metals and industrial supply chains because higher gas and oil prices directly affect production costs, margins and demand visibility. Energy-intensive sectors such as aluminium, steel, chemicals, fertilizers and glass remain especially exposed.

The Commission expects EU growth to recover to 1.4% in 2027, while eurozone growth is forecast at 1.2%. But the near-term outlook remains fragile as the energy shock continues to reshape inflation and investment decisions.

Higher Gas and Oil Prices Weigh on European Competitiveness

Energy prices have risen sharply since the outbreak of the conflict. The Commission said gas prices increased by 50% and crude oil prices by 65% between 27 February and the 29 April cut-off date.

The outlook assumes average TTF gas futures prices will be 47% higher in 2026 and 32% higher in 2027 than in the previous forecast. That creates a heavier cost base for European industry.

For manufacturers, the impact is immediate. Higher gas, power and fuel costs reduce competitiveness against producers in regions with cheaper energy.

This is especially important for metals. European smelters, refiners and rolling mills already face pressure from imports, carbon costs and weak demand. Another energy shock could delay restocking and weaken investment appetite.

Inflation is also expected to rise. EU headline inflation is forecast to increase to 3.1% in 2026 from 2.5% in 2025, before easing to 2.4% in 2027.

That inflation path limits policy flexibility. Governments may need to support vulnerable consumers and industries, but public finances are already under pressure.

The EU general government deficit is expected to widen to 3.6% of GDP by 2027, up from 3.1% in 2025. This reduces the room for broad stimulus and increases the importance of targeted support.

Growth Gap Widens Across the EU

The energy shock is affecting member states unevenly. Ireland is forecast to contract by 1.2%, while major economies such as Italy, Germany and France are expected to grow only modestly.

Germany’s growth is forecast at 0.6%, France at 0.8%, Italy at 0.5% and the Netherlands at 1%. These figures point to weak momentum across several core industrial economies.

Southern and eastern Europe show stronger projections. Spain is forecast to grow by 2.4%, Lithuania by 3%, Poland by 3.5% and Malta by 3.7%.

The gap matters because Europe’s industrial recovery will not be uniform. Regions with stronger growth may support construction, infrastructure and manufacturing demand, while slower economies could weigh on metals consumption.

The Commission also warned of a downside scenario in which EU-wide growth falls to just 0.7% this year. That risk depends partly on how quickly oil and gas supply from the Mideast Gulf can normalise.

EU economy commissioner Valdis Dombrovskis said Europe should respond by further reducing reliance on imported fossil fuels and keeping fiscal support temporary and targeted.

That message reinforces the strategic link between energy security and industrial competitiveness. Europe has reduced the energy intensity of economic output by about 44% since 1995, but the latest shock shows that import dependence still carries major economic risk.

The Metalnomist Commentary

Europe’s growth downgrade is an industrial warning, not just a macroeconomic revision. The bloc cannot protect metals, manufacturing and clean-energy supply chains without faster domestic energy deployment and lower exposure to imported fossil fuels.

European Ferro-Molybdenum Prices Hit Three-Year High on Concentrate Squeeze

Ferro-Molybdenum

European ferro-molybdenum prices have climbed to a three-year high as tight molybdenum concentrate supply, stronger Chinese steel demand and logistical constraints push the market higher. The rally has lifted prices sharply since the start of the year.

European ferro-molybdenum prices were last assessed at $70.90-71.50/kg in-warehouse Rotterdam on 19 May, up by about 25% from the start of the year. Molybdenum oxide prices also rose to $30.50-30.80/lb duty unpaid Rotterdam, up by 28% over the same period.

European ferro-molybdenum prices are being driven mainly by raw material tightness rather than a broad recovery in European steel demand. Molybdenum concentrate availability has tightened structurally, limiting oxide and ferro-molybdenum production flexibility.

The key problem is that molybdenum is mostly produced as a by-product of copper mining. That means supply cannot quickly respond to higher prices, leaving the market exposed when concentrate availability tightens or downstream demand rises.

Concentrate Tightness Drives the Molybdenum Chain Higher

Molybdenum concentrate is the starting point for the supply chain. It is converted into molybdenum oxide, which then feeds ferro-molybdenum production for alloy steel and stainless steel applications.

Concentrate prices in China have risen by about 29% since January, peaking at 5,235 yuan/mtu on 13 May. That cost increase has moved through the value chain and supported higher oxide and ferro-molybdenum prices.

Chinese steel demand has intensified the squeeze. Mills purchased around 30,000t of ferro-molybdenum in March-April, up 10% from a year earlier.

This buying absorbed much of China’s available spot concentrate and oxide supply. As a result, less material has been available for export to other consuming regions.

Market participants initially expected demand to slow after pre-holiday buying ahead of the 1-5 May Labour Day holiday. Instead, sustained steel mill demand kept buyers active and tightened availability further.

The Centerra Gold Langeloth outage in the US also supported the rally. An explosion near the facility’s acid unit on 29 January led to a suspension of operations, removing an important source of molybdenum oxide and ferro-molybdenum from the prompt market.

The facility’s direct global supply share is limited. However, its outage tightened nearby availability and strengthened bullish sentiment, allowing traders and producers to raise offers more aggressively.

Supply Constraints Outweigh European Demand Recovery

The current rally is largely supply-led. European steel demand has not recovered strongly enough to explain the scale of the price increase on its own.

Logistical constraints have made the situation worse. Financing, freight and inventory bottlenecks have reduced spot availability among trading firms.

Some sellers have also withheld material in expectation of further price gains. At the same time, buyers have resisted higher offers, reducing spot liquidity and creating sharper price movements.

Truckload enquiries have remained limited in recent weeks. This suggests that physical tightness and cautious seller behaviour are driving prices more than a surge in end-user consumption.

For alloy producers and steelmakers, the rally raises cost pressure. Ferro-molybdenum is used to improve strength, corrosion resistance and high-temperature performance in steels used across energy, chemicals, engineering, defence and industrial equipment.

The market’s vulnerability reflects molybdenum’s by-product nature. Even if prices rise sharply, copper mines cannot quickly increase molybdenum output just to meet alloy demand.

That makes the molybdenum chain highly sensitive to disruptions. Concentrate shortages, converter outages, Chinese buying and trading bottlenecks can all create price moves that exceed the underlying change in steel consumption.

The Metalnomist Commentary

The molybdenum rally shows how by-product metals can move violently when small supply disruptions meet concentrated demand. European buyers are not facing a simple steel-demand story; they are facing a raw material chain where concentrate availability now controls ferro-alloy pricing.

Nippon Kosice Mill Move Builds Direct European Steel Hub

U.S Steel, Kosice Mill

Nippon Kosice mill ownership is moving into a new phase as Nippon Steel begins the transition to take direct control of US Steel’s Slovakia-based Kosice operation. The move positions the plant as a key European operating hub inside Nippon’s global steel network.

Nippon Kosice mill control matters because the facility is one of Central Europe’s major integrated steel assets. It has crude steel capacity of 4.5mn t/yr and produced 3.2mn t in the 2025 fiscal year.

Nippon Kosice mill operations include three blast furnaces and downstream lines for hot rolling, cold rolling, annealing, tinplate, galvanizing and non-oriented electrical steel. That product range gives the site relevance across automotive, electrical, energy, packaging and construction supply chains.

The mill has been wholly owned by US Steel since 2000. US Steel became a subsidiary of Nippon in 2025, and the latest move will put Nippon in direct control of Kosice’s operations.

Direct Control Strengthens Technology, Sales and Procurement

Nippon’s direct ownership strategy is aimed at improving Kosice’s competitiveness through closer coordination on technology, sales and procurement. This is more than a corporate restructuring.

Integrated steel mills increasingly need stronger technical support to serve higher-grade markets. Customers in automotive, electrical equipment, construction and energy are demanding better surface quality, tighter tolerances, stronger coating performance and more advanced steel grades.

Kosice already has a broad industrial customer base across Europe. Direct integration with Nippon could help the mill improve product development and align more closely with global customers that require high-value steel.

Procurement is also important. European steelmakers face pressure from raw material costs, energy prices, carbon rules and import competition. A stronger link to Nippon’s global network could improve sourcing discipline and operating efficiency.

The plant’s non-oriented electrical steel capability is especially strategic. NOES is used in electric motors, generators and other equipment tied to electrification. As electric vehicles, industrial motors and grid equipment expand, electrical steel quality becomes increasingly important.

Tinplate and galvanizing lines also give Kosice exposure to packaging, automotive and construction demand. These downstream assets allow the mill to capture more value than a basic slab or hot-rolled coil producer.

Central and Eastern Europe Offer High-Grade Steel Growth

Nippon expects steel demand in Central and Eastern Europe to keep growing. That regional view is central to the Kosice strategy.

Manufacturing relocation into the region could support demand for higher-grade steel. Automotive suppliers, electrical equipment producers, energy companies and construction manufacturers all need reliable local steel supply.

Kosice is well placed geographically to serve those markets. Slovakia sits near important automotive and industrial clusters, giving the mill a logistics advantage for regional customers.

The move also gives Nippon a stronger European production base at a time when the steel industry is becoming more regional. Customers increasingly value supply security, shorter delivery routes and stable technical support.

For European steel supply chains, direct Nippon control could bring more disciplined investment and product strategy. The challenge will be upgrading competitiveness while managing Europe’s high energy costs and decarbonisation pressure.

Nippon’s high-value manufacturing technology could help Kosice move further into specialised grades. That would be important if regional demand shifts from commodity steel toward automotive sheet, electrical steel, coated products and precision cold-rolled materials.

The broader industrial meaning is clear. Nippon is not treating Kosice as a passive inherited asset from US Steel. It is positioning the mill as a strategic European platform.

The Metalnomist Commentary

Nippon’s Kosice move shows that global steelmakers are concentrating control around regional hubs with high-grade potential. The key test will be whether Nippon can turn Kosice from a legacy integrated mill into a more competitive supplier for Europe’s automotive, electrical and energy transition markets.

Outokumpu Stainless Steel Deliveries Rise as EU CBAM Supports Local Demand

Outokumpu

Outokumpu stainless steel deliveries rose sharply from the previous quarter after the EU’s carbon border adjustment mechanism began applying to imports at the start of the year. The Finnish stainless steel producer shipped 465,000t in January-March, up 27% from the previous quarter.

Outokumpu stainless steel deliveries were still down 1% from a year earlier, showing that the recovery remains uneven. But the quarterly increase suggests CBAM is starting to shift some demand toward local European production.

Outokumpu stainless steel deliveries are expected to rise by up to 10% in the second quarter. The company is benefiting from European buyers reassessing imports as carbon-related costs begin to affect non-EU supply.

The result highlights the industrial importance of scrap-based stainless steel production. CBAM could improve the competitiveness of lower-carbon European producers if importers face higher carbon costs.

CBAM Gives European Stainless Producers a Demand Tailwind

CBAM imposes a carbon levy on imports from outside the EU. This changes the cost comparison between imported stainless steel and local European material.

For Outokumpu, the mechanism supports demand for European scrap-based stainless production. Scrap-based production generally carries a lower carbon footprint than more emissions-intensive routes.

European stainless shipments reached 324,000t in the first quarter, up 2% from a year earlier. This suggests regional demand held up better than some other markets.

Shipments to the Americas fell by 5% to 148,000t. However, the Americas business still delivered much stronger earnings because of higher average selling prices.

The commercial message is clear. Volume growth is beginning to appear in Europe, but pricing power remains stronger in the Americas.

Ferro-Chrome Volumes Rise but European Margins Weaken

Outokumpu’s ferro-chrome shipments rose by 15.8% year on year to 110,000t. Strong demand in Europe and the US supported the increase.

Ferro-chrome remains essential for stainless steel production because chromium provides corrosion resistance. Higher ferro-chrome shipments therefore show stronger activity across stainless and alloy supply chains.

Group adjusted Ebitda rose by 33% on the year to €65mn. The improvement was driven mainly by the Americas business, where Ebitda climbed to €52mn from €11mn.

But the earnings mix was uneven. Ferro-chrome Ebitda fell by nearly 30% to €30mn, while the European stainless segment posted negative Ebitda of €13mn, down from positive €5mn a year earlier.

Outokumpu attributed weaker European profitability to lower average selling prices and lower fixed-cost absorption. This shows that CBAM may support volumes before it fully restores margins.

The first-quarter result therefore sends a mixed signal. European demand is improving, but pricing and cost absorption still need to recover for the regional stainless business to regain strength.

The Metalnomist Commentary

Outokumpu’s quarter shows that CBAM is beginning to change stainless steel trade behaviour. But the policy’s real test is whether it can improve European producer margins, not only redirect demand toward local supply.

 

NAS Stainless Mill Expansion Strengthens Acerinox’s US Growth Strategy

Acerinox

NAS stainless mill expansion has started operations, giving Acerinox a stronger production base in the US stainless steel market. The Spanish stainless steel and high-performance alloys producer said the expansion at North American Stainless in Kentucky began at the start of 2026.

NAS stainless mill expansion will add 308,000 short tons per year of capacity. This lifts the mill’s annual run rate to 1.85mn short tons from its previous 1.54mn st/yr base.

NAS stainless mill expansion had been delayed from the end of 2025 because of crane repair and revamp work at the site. The start-up now gives Acerinox more exposure to a US market it sees as more stable and attractive than Europe.

The project reinforces Acerinox’s investment preference. The company said US finished stainless base prices have been more stable than European prices, which remain affected by severe swings and the historic lows reached in mid-2023.

US Stainless Market Shows Signs of Recovery

US apparent finished stainless demand fell by 11% year on year in the first quarter. However, demand improved by 5% from the previous quarter, supporting Acerinox’s view that US orders have recently strengthened.

US stainless inventories are now 7% below the historical average and appear stabilised. Deliveries have also grown in recent months, suggesting that the market may be moving beyond the weakest part of the cycle.

North American Stainless operated at an 80% utilisation rate in the quarter, excluding the new expansion. That implies quarterly stainless production of around 308,000st.

The expansion gives Acerinox more leverage if US demand continues to recover. Higher capacity at NAS can support customers in appliances, construction, automotive, energy, industrial equipment and infrastructure applications.

The US market also offers a more attractive pricing environment for Acerinox. Compared with Europe, where stainless producers have faced deeper price volatility, the US provides a clearer platform for investment and margin stability.

Aerospace and Gas Turbines Support High-Performance Alloy Outlook

Acerinox’s high-performance alloys division faced weaker demand from oil and gas and chemical processing customers. Geopolitical uncertainty has slowed investment in those sectors, reducing near-term demand for specialty alloys.

However, the company expects stronger aerospace demand to support Haynes International, a key part of its high-performance alloys business. Aerospace remains an important market for nickel-based and specialty alloys used in engines, structures and high-temperature components.

Industrial gas turbines are another potential growth driver. Demand from AI data centres could support turbine investment as power infrastructure becomes a bottleneck for digital expansion.

This matters because AI data centres require reliable electricity, backup generation and grid reinforcement. That can increase demand for high-temperature alloys used in turbine blades, combustion systems and other demanding energy equipment.

Acerinox’s strategy now has two clear pillars. It is expanding stainless capacity in the US through NAS while positioning high-performance alloys around aerospace and energy infrastructure growth.

The Metalnomist Commentary

Acerinox is using the US market as its growth anchor because stainless pricing and demand visibility remain stronger than in Europe. The NAS expansion also shows how specialty metals producers are aligning investment with aerospace, data-centre power demand and more resilient regional markets.

Aperam Stainless Steel Earnings Rise as European Demand Recovers

Aperam

Aperam stainless steel earnings improved in the first quarter as seasonal demand recovered in Europe and average selling prices strengthened. The Luxembourg-based stainless producer reported adjusted Ebitda of €90mn in January-March, up from €67mn in the previous quarter and €86mn a year earlier.

Aperam stainless steel earnings were supported by higher shipments, better utilisation and a more favourable pricing environment. Group shipments rose to 617,000t from 554,000t in the fourth quarter and 575,000t a year earlier.

Aperam stainless steel earnings also benefited from the company’s diversified business model. Stainless and electrical steel, services, alloys, recycling and downstream activities all contributed to a stronger start to the year.

The company described the result as its best first quarter in three years. It expects second-quarter adjusted Ebitda to be significantly higher if metal and product prices remain near current levels.

Stainless and Electrical Steel Recover From Late-2025 Weakness

Aperam’s stainless and electrical steel division showed the clearest improvement. Adjusted Ebitda rose to €35mn from €11mn in the fourth quarter and €28mn a year earlier.

Segment shipments increased by 3.6% from the previous quarter to 430,000t. European demand improved seasonally, although Brazilian shipments were lower.

Average steel selling prices rose by 10.3% from the fourth quarter to €2,200/t. Prices remained below the €2,417/t recorded a year earlier, but the quarterly increase helped restore margins.

The improvement suggests European stainless markets are recovering from a difficult end to 2025. Low capacity utilisation, import pressure and subdued consumption had weighed on producer earnings.

Higher utilisation helped the division in the first quarter. Positive valuation effects also supported earnings, showing how pricing momentum can lift stainless producers when inventories and product values move favourably.

Aperam’s outlook also reflects a stronger European trade policy backdrop. Trade defence regulation could give domestic producers more protection against import pressure, especially if demand continues to recover.

Downstream Services, Alloys and Recycling Strengthen the Value Chain

Aperam’s services and solutions segment also improved. Adjusted Ebitda rose to €20mn from €7mn in the fourth quarter and €13mn a year earlier.

Shipments increased to 191,000t from 159,000t in the previous quarter. Average selling prices rose by 3.7% to €2,733/t, reflecting better downstream demand.

The alloys and specialties division generated adjusted Ebitda of €27mn. This was higher than €22mn in the fourth quarter, although slightly below the €29mn reported a year earlier.

Shipments in alloys and specialties were stable at 16,000t. Average selling prices declined by 3.1% to €15,846/t, but seasonal demand helped offset higher maintenance costs.

Aperam strengthened this higher-value position after the quarter by acquiring Magnetec Group. The acquisition adds nanocrystalline soft magnetic components and expands the company’s reach into electrical engineering and electronics markets.

The recycling and renewables segment showed higher activity but lower earnings. Shipments rose by 23% to 357,000t, while sales increased to €431mn.

Adjusted Ebitda in recycling and renewables fell to €23mn from €32mn. The fourth quarter had benefited from unusually strong year-end valuation effects, making the comparison difficult.

The recycling business remains strategically important. Aperam’s scrap integration gives it some protection against volatility in nickel, ferro-alloys and stainless scrap prices.

This matters because stainless steel production depends heavily on raw material cost control. Integrated scrap flows can improve flexibility when alloying metals and scrap markets become volatile.

Aperam’s first-quarter result therefore points to more than a cyclical recovery. It shows that stainless producers with downstream services, alloy exposure and recycling integration can defend earnings better when European demand improves.

The Metalnomist Commentary

Aperam’s first quarter shows that European stainless steel is recovering, but not evenly. The strongest signal is the value-chain effect: producers with scrap integration, downstream services and specialty alloy exposure are better placed than those relying only on commodity stainless volumes.

Refined Zinc Deficit Forecast Signals Tight Balance Despite Mine Supply Growth

ILZSG

Refined zinc deficit conditions are expected in 2026 as global demand slightly outpaces refined metal supply, according to the International Lead and Zinc Study Group. The group forecasts a refined zinc deficit of 19,000t this year.

The refined zinc deficit reflects a market where demand growth remains modest but supply growth is also limited. Global refined zinc demand is expected to rise by 1.3% to 14mn t, while refined zinc output is forecast to increase by 1.4% to 13.99mn t.

The refined zinc deficit is not large, but it highlights a fragile balance in a metal tied closely to galvanised steel, infrastructure, automotive production, construction and industrial manufacturing. Even small shifts in mine output, smelter operations or steel demand could move the market back into surplus or deeper deficit.

China, Europe and India Support Zinc Demand

China remains the world’s largest zinc consumer and will continue to anchor demand growth. ILZSG expects Chinese refined zinc demand to rise by 1.8% in 2026, following 1.9% growth in 2025.

European demand is forecast to rise by 1.1% this year, slowing from 3.5% growth last year. US demand growth is also expected to moderate to 1.4%, after expanding by 7% in 2025.

India and South Korea are expected to post higher refined zinc demand. Their growth reflects continued industrial activity, infrastructure needs and manufacturing consumption.

The Middle East outlook is weaker. Iran’s zinc usage is expected to decline sharply because of major infrastructure damage, especially in the steel sector, caused by the war. Demand in Saudi Arabia and the UAE is also expected to fall because of refined metal import disruption and economic instability.

This regional split matters for zinc producers and traders. Growth in Asia may support consumption, but slower demand in Europe and the US, combined with disruption in the Middle East, limits the strength of the global demand recovery.

Mine Supply Rises Slowly as Smelters Face Concentrate and Energy Constraints

Global zinc mine production is forecast to rise by only 0.3% to 12.55mn t in 2026. This follows a stronger 2025, when mine production rose by 4.8%, or 5.9% excluding China.

This year’s mine growth will be supported by higher output in the Democratic Republic of Congo, Portugal and China. New capacity in China, including the Huoshaoyun mine, is expected to contribute to supply.

However, declines in Peru, Sweden and the US will partly offset these gains. Lower output is expected at Antamina, Garpenberg and Red Dog, three important zinc-producing operations.

Refined zinc output is expected to rise by 1.4% to 13.99mn t. Chinese refined production is forecast to grow by 3% as new capacity starts up, following a 6.7% increase last year.

European refined output is also expected to rise, supported by Boliden’s Odda smelter expansion in Norway and the planned restart of Russia’s Verkhny Ufaley smelter. However, higher energy costs and limited concentrate availability continue to pressure several European producers.

Outside Europe and China, refined zinc production is expected to increase in South Korea but decline in Iran and Canada. This shows that refined zinc supply remains exposed to regional energy costs, concentrate access and operational disruption.

The lead market presents a different picture. ILZSG expects refined lead supply to exceed demand by 109,000t in 2026, with output rising by 1.3% to 13.83mn t and demand increasing by 1.1% to 13.72mn t.

The Metalnomist Commentary

The refined zinc deficit forecast points to a market that is balanced on a narrow edge, not structurally short. Zinc’s outlook will depend on whether Chinese smelter growth and new mine capacity can offset weaker regional demand and concentrate constraints.

India Manganese Alloy Prices Fall as Supply Glut Meets Weak Demand

Manganese alloy

India manganese alloy prices declined as muted demand, excess supply and cautious buying weighed on the bulk alloys market. Ferro-manganese and silico-manganese both moved lower, while ferro-chrome and ferro-silicon prices remained broadly stable.

India manganese alloy prices are under pressure from a widening mismatch between production and consumption. Weak stainless steel demand, limited export bookings and inventory overhangs have reduced market momentum.

India manganese alloy prices are also being affected by liquidity pressure among producers. Some suppliers lowered offers toward the end of the month to generate cash flow, adding further downside pressure.

The broader market remains uneven. Ferro-chrome is supported by long-term export commitments, while ferro-silicon is supported by limited availability. Manganese alloys, however, face weaker domestic and overseas demand.

Ferro-Manganese and Silico-Manganese Weaken on Inventory Pressure

Ferro-manganese prices fell as domestic demand remained insufficient to absorb available supply. The 70% ferro-manganese price declined to Rs83,000-85,000/t ex-works, while 75% material fell to Rs90,000-92,000/t.

Higher manganese ore costs continue to provide some support. This is why ferro-manganese prices are expected to remain above silico-manganese, despite weak buying and limited spot activity.

However, the domestic market is still struggling with excess supply. Producers are competing for limited orders, and some have cut prices to maintain liquidity.

Silico-manganese prices also moved lower. Indian 60% silico-manganese fell to Rs82,500-83,500/t ex-works, with market activity described as extremely limited.

Price recovery will be difficult until inventories are absorbed. Buyers remain cautious and are delaying purchases because they expect further corrections.

Export prices also weakened. The 60% silico-manganese export price fell to $890-900/t fob east coast, while 65% material declined to $960-980/t fob.

Overseas buying slowed as higher offer levels discouraged bookings. Middle East enquiries halted because of geopolitical tensions, while European demand weakened under quota restrictions.

CBAM certification is adding another pressure point. European buyers are increasingly demanding carbon documentation for high-carbon manganese alloys, raising compliance costs and complicating Indian export sales.

Ferro-Chrome and Ferro-Silicon Hold Steady Despite Weak Sentiment

Ferro-chrome prices remained stable even as downstream demand stayed subdued. High-carbon 60% ferro-chrome held at Rs117,000-119,000/t ex-works.

Domestic producers continued fulfilling long-term export commitments. This helped keep the market steady despite weaker bids in OMC’s chrome ore auction.

The fall in auction bids reflected softer consumer demand. However, ferro-chrome did not face the same immediate inventory and liquidity pressure seen in manganese alloys.

Ferro-silicon prices also held steady. The 70% ferro-silicon price remained at Rs108,000-110,000/t ex-works, supported by limited availability and firm demand.

The difference between ferro-silicon and manganese alloys shows how supply balance is driving price direction. Ferro-silicon has tighter availability, while manganese alloys face surplus material and weaker offtake.

For Indian bulk alloys, export conditions remain critical. Domestic demand alone may not be enough to absorb production if overseas buying stays weak.

The European market will also become more difficult for high-carbon alloys. CBAM compliance, quota restrictions and weak steel consumption could keep Indian exporters under pressure.

The Metalnomist Commentary

India’s manganese alloy market is not facing a raw material problem alone; it is facing a demand absorption problem. Until excess inventories clear and export demand improves, ore cost support will only slow the decline rather than reverse it.