Uncertainty Looms Over Russian Ferro-Titanium Market Amid EU Sanctions

Ferro-Titanium (Fe-Ti)

The European ferro-titanium (FeTi) market is facing a period of uncertainty as the EU sanctions on Russian ferro-alloys are set to be fully enforced. Market participants are divided over whether the sanctions will have a lasting impact on Russian FeTi supplies or if the overhang of Russian units in Europe, coupled with low demand from steel mills, will continue to create downward pressure on prices in 2025. A key point of concern is the potential for circumvention, with fears that Russian material may be rerouted or rebranded through non-EU countries.

Legal Framework and Market Response to Sanctions

Under the sanctions, ferro-titanium imports from Russia that were contracted before 19 December 2023 and presented to customs before 20 December 2024 may still enter free circulation within the EU. However, despite the clear framework outlined in Council Regulation 833/2014, uncertainty continues to surround how the market will react once these conditions change.

"Everyone is waiting for 20 December, it seems nobody understands what will happen," commented a European producer. There is significant ambiguity as to how the market will balance the loss of Russian material, particularly in light of high inventories of Russian ferro-titanium already present in warehouses in the Netherlands, Estonia, Latvia, and Germany. Imports in 2024 have already been lower than in previous years, but it remains unclear where the remaining stock will end up, especially as many buyers continue to avoid Russian FeTi.

Trade Dynamics and Impact on the Market

Despite sanctions, imports of Russian ferro-titanium to the EU remained significant in 2024, particularly in Estonia, Germany, and the Netherlands. In fact, Estonian imports in October 2024 reached a 10-year high of 591 tonnes, signaling that sanctions have not entirely stopped the flow of Russian material into the EU. Westbrook Resources, a UK producer, has called for increased vigilance among buyers to ensure they are not inadvertently purchasing smuggled or rerouted material, highlighting the difficulty of tracking the origin of ferro-titanium in the current market environment.

As of 20 December 2024, no fresh Russian ferro-alloys will be allowed into the EU, leading to a projected loss of 766 tonnes per month based on 2023 averages. While EU and UK producers may be able to cover this shortfall with unused capacity, the reduction in available supply is likely to increase demand for raw materials, driving up prices for scrap and raising production costs for ferro-titanium. However, overall demand from steel mills and cored wire manufacturers has been weak, due to an economic downturn and lower steel prices. This will likely temper any significant price increases, though temporary spikes may occur if first-quarter tenders prompt urgent purchases.

Circumvention Risks: Material Rerouting and Relabelling

Despite the official ban on Russian ferro-titanium imports, there are ongoing concerns about circumvention. The EU regulation explicitly prohibits releasing goods if there are grounds to suspect circumvention, but market sources argue that loopholes remain. Materials may be rerouted, relabelled, or blended through countries such as Turkey, India, China, or Kazakhstan, creating a potential grey market for Russian FeTi in Europe. Chinese imports of Russian ferro-titanium have already been on the rise, suggesting that circumvention may already be in play, though Europe has not yet seen significant volumes of these rerouted materials.

Logistics challenges, including the extra costs of rerouting and repackaging, may limit the feasibility of circumvention unless steel prices in Europe increase. Additionally, there are reports that Russian producers may shift to exporting titanium scrap, a material not covered under the EU sanctions. This could provide an alternative route for Russian producers to bypass restrictions, further complicating the market dynamics.

Conclusion

As the sanctions on Russian ferro-titanium fully come into force in December 2024, European market participants remain in a state of uncertainty, unsure of how the market will respond to the loss of Russian material and the potential for circumvention. While EU producers may absorb some of the shortfall with existing capacity, broader market conditions, including weak demand from steelmakers and rising production costs, could create a complex and volatile pricing environment.

China and EU Resume Electric Vehicle Talks Amid Growing US Tariff Pressures

US tariff, China

Negotiations on Price Commitments Could Ease Trade Friction in the EV Market

China and the European Union (EU) have decided to resume negotiations regarding a price commitment mechanism for battery electric vehicles (BEVs). This decision follows the EU's implementation of countervailing duties on Chinese BEV imports in 2024. The goal of these talks is to replace the tariffs imposed on Chinese electric vehicles (EVs), addressing ongoing trade tensions between China and the EU.

EU's Countervailing Duties and the Push for a Price Commitment Mechanism

In October 2024, the European Commission finalized its ruling on countervailing duties on BEVs imported from China, which came into effect at the end of October. These duties ranged from 17% to 35.3%, impacting major Chinese automakers like BYD, SAIC, and Geely. The aim was to counter what the EU viewed as unfair pricing practices by Chinese EV manufacturers. However, these tariffs have faced opposition from both China and European companies seeking to expand their market share in the fast-growing electric vehicle sector.

Despite early talks on a price commitment mechanism in November 2024, the discussions stalled without significant progress. However, on April 10, 2025, China’s Ministry of Commerce announced that both sides had agreed to resume negotiations on the price commitments and to discuss broader issues of investment cooperation in the automotive industry.

US Tariffs Intensify the Pressure on China and the EU

The resumption of talks between China and the EU comes amidst escalating trade tensions with the United States. As of April 11, 2025, the US imposed a 145% tariff rate on imports from China, adding additional pressure on Chinese manufacturers, particularly in the electric vehicle and battery sectors. US President Donald Trump's tariffs, which were initially implemented in 2024, compounded by those under the Biden administration, have made it nearly impossible for Chinese EVs and lithium-ion batteries to enter the US market.

In an effort to counterbalance the US's growing tariff measures, China has been seeking closer economic ties with the EU. Chinese Premier Li Qiang held discussions with EU President Ursula von der Leyen on April 8, 2025, addressing the need for structural solutions to re-balance bilateral trade relations. The talks have emphasized the urgency of enhancing market access for European businesses in China and forging a collaborative approach to the challenges posed by US tariffs.

Potential Impact on the Electric Vehicle Market

If China and the EU reach an agreement on the price commitment mechanism, it could significantly alter the landscape for Chinese EVs in Europe. Prior to the implementation of the countervailing duties, the EU accounted for about 28% of China’s new energy vehicle (NEV) exports, which includes both BEVs and hybrid plug-in vehicles. However, the tariffs have drastically reduced Chinese EV exports to Europe.

The continuation of trade protectionist measures from both the US and the EU is putting immense pressure on China’s EV and battery markets, particularly as it struggles to enter key international markets. The future of Chinese electric vehicle exports largely hinges on these negotiations, and any breakthrough could bring Chinese-made EVs back into the competitive EU market.

Imports of Russian FeTi Redirect from EU to Asia

Russian ferro-titanium is increasingly being directed toward Asia as EU importers — whether steel mills or intermediaries — have tightened their purchasing strategies in compliance with EU sanctions against Russian ferro-alloys.

EU sanctions against Russian ferro-alloys came into force last December but permitted contracts that pre-dated sanctions to be fulfilled until December 20th this year. After this date, all purchases, imports, or transfers, directly or indirectly, of Russian ferro-alloys will be prohibited. While EU imports are dwindling but have not yet ceased, Asian importers are capitalizing on the surplus of Russian ferro-titanium that is no longer flowing to Europe.

EU imports in January and February were broadly consistent with the fourth quarter of last year, although the number of importing nations narrowed. Imports in March dipped, rebounded in April, and in May, reached their lowest level since September 2022 at 576t.

Non-EU imports increased by a third to 235t in the first quarter and then spiked to 492t in May alone, primarily driven by higher flows to China, alongside regular importers Turkey and South Korea. China imported 100t in April, 260t in May, and 100t in June from Russia. China is no stranger to importing Russian ferro-titanium, having received several thousand tonnes in 2018-21, but it imported only incremental volumes in 2022 and none last year.

China's re-emergence as an importer from Russia both highlights and offsets, as far as Russian sellers are concerned, the EU's gradual withdrawal from the Russian market. This demonstrates a fundamental shift in flows, yet Russia's overall exports are unaffected and even reached a nine-month high in May.

Market participants are unsure why China is importing these volumes from Russia, considering its own ample production capacity and domestic cost structures. Some have posited that these imports are being re-exported, but the cost of doing so to Europe is not profitable.

Chinese ferro-titanium exports in the second quarter hit their highest level in two years at 811t, coinciding with the spike in intake from Russia, underpinning speculation about re-exports of Russian ferro-titanium. Top recipients from China included Vietnam, South Korea, Indonesia, Turkey, and the UAE.

Turkish imports from Russia have been sporadic this year, with some market participants linked to banks refusing to clear payments on Russian material transiting through Turkey.

Supply Gap in EU Market Offset by Low Demand

European producers have sufficient capacity to fill any void of Russian units, Metalnomist understands, but they will require more raw materials in the form of sponge or scrap. Scrap availability is still tight in Europe, due to either lower generation or merchants holding on to inventories, and lower machining rates in July and August may compound this issue.

Stretched raw material access and lower imports from Russia initially drove bullish attitudes among producers that prices in the EU market would increase as steel mills would be able to purchase only from certain non-Russian sources.

But these expectations have been undermined in the past month by several third-quarter tenders that have demonstrated persistent availability at lower prices from sellers keen to secure sales in a weak demand environment.

The market, therefore, is caught between supply fundamentals pointing to higher prices, due to tightness in raw materials and a pending loss of Russian supplies, and demand being insufficient to provide impetus for stronger prices.

EU and UK Extend Steel Safeguard Measures to 2026

In a significant policy update, the European Commission has extended its steel safeguard measures for an additional two years, setting the new expiration date to June 2026. This decision, announced on June 25, 2024, follows an in-depth investigation prompted by 14 EU member states, which highlighted the necessity of these measures to prevent significant damage to the EU steel industry​.

The investigation identified several critical factors contributing to the ongoing import pressures on the EU market. These include persistently high global steel production capacity, increased exports from China to third countries (notably in Asia), and a rise in trade defense and restrictive measures by other countries. Additionally, there has been a significant decline in steel demand within the EU, further straining the market​.

First introduced in July 2018 in response to the US's Section 232 tariffs on steel, the EU’s safeguard measures involve Tariff-Rate Quotas (TRQs). These quotas allow certain volumes of steel imports at lower duty rates, with a 25% duty imposed on imports exceeding these quotas. The latest extension includes technical adjustments to better align the measures with current market conditions, effective from July 1, 2024.

Similarly, the UK government has extended its steel safeguard measures until June 30, 2026. This decision, approved by the UK Secretary of State for Business and Trade on June 26, 2024, came after a recommendation from the Trade Remedies Authority (TRA). The UK steel industry, facing similar global pressures and market imbalances, has welcomed this extension as vital for its protection.

Industry experts have underscored the importance of these measures in maintaining the stability of the steel market within the EU and the UK. They argue that the measures help counteract the effects of global overcapacity and redirected trade flows, providing a necessary buffer for domestic producers​​.

In conclusion, both the EU and the UK are taking significant steps to safeguard their steel industries from ongoing global market pressures, ensuring stability and protection for the foreseeable future.

EU Ferro-Titanium Imports from Russia Decline in Q2, Surge in June Amid Sanctions

In a complex geopolitical landscape marked by sanctions and shifting trade patterns, the European Union's(EU) imports of ferro-titanium from Russia witnessed notable fluctuations in the second quarter of 2024. According to recent trade data, while overall imports during April-June fell to their lowest quarterly levels since the fourth quarter of 2022, June alone saw a significant increase, reaching a nine-month high. This paradox highlights the uneven impact of EU sanctions targeting Russian ferro-alloys at the year's midpoint.

During the second quarter, the EU imported 3,321 metric tons of Russian ferro-titanium, representing a 33% increase from the first quarter's 2,497 metric tons. However, this figure still marked an 11% year-on-year decline. Within the EU, member states accounted for 2,192 metric tons, while non-EU countries absorbed the remaining 1,129 metric tons— the highest share held by non-EU states since Q2 2022.

A significant trend observed in 2024 has been the redirection of Russian ferro-titanium exports towards non-EU states, particularly China and Turkey, amid increasing sanctions. Despite this, the Netherlands broke the pattern in June by importing 473 metric tons, the highest intake by any EU country this year, slightly surpassing Estonia's January intake of 468 metric tons.

Under Article 3i of the 12th EU sanctions package, the purchase, import, or transfer—directly or indirectly—of Russian ferro-titanium is prohibited, with allowances for pre-existing contracts. However, market insiders suggest that Russian ferro-titanium may still be entering the EU through specific channels.

Market analysts had anticipated a steady decline in EU imports throughout 2024 as contracts predating the sanctions expired. However, the surge in Dutch imports in June contrasts sharply with a notable decrease in Estonia's imports, which reached their lowest level this year. For the entire quarter, Estonia imported 910 metric tons, a decline compared to both prior periods.

In parallel, Estonia's re-exports of ferro-titanium in Q2 fell to 654 metric tons, with Latvia receiving 597 metric tons and the United States 57 metric tons. Interestingly, Latvia reported zero imports directly from Russia.

China's imports of Russian ferro-titanium surged to 460 metric tons in Q2, up from zero in both the previous quarter and the same period last year. Turkey also increased its imports to 483 metric tons during this period. The potential for any of this material to eventually enter the EU remains uncertain as the market adapts to the evolving sanctions regime.

Russian ferro-titanium prices in Europe averaged $5.80-6.23 per kilogram of titanium in Q2, up from $5.33-5.81 per kilogram in Q1. The price increase reflects rising production costs and, to some extent, follows Western market trends. As of August 15, prices were last assessed at $5.60-6.30 per kilogram, as Russian suppliers lowered their offers to clear stock ahead of more stringent sanctions set to take full effect by the end of the year.

EU and UK Move Toward Linking Carbon Markets

EU and UK

The EU and UK have formally agreed to work toward linking their carbon emissions trading systems (ETS), a move expected to benefit both industries and climate policy alignment. The announcement, made during a summit in London, emphasized that a EU and UK carbon markets link would support fair trade and reduce carbon leakage between jurisdictions. According to the joint statement, such a link would also exempt both regions from their respective carbon border adjustment mechanisms (CBAM), providing a more level playing field for domestic industries while maintaining environmental ambition.

ETS Link Could Unlock Significant Economic Gains

The linking of the EU and UK carbon markets could generate significant cost savings. UK Prime Minister Keir Starmer claimed British businesses could save £800 million in EU carbon taxes, while a recent industry-commissioned study projected up to €1.2 billion in savings from lower hedging costs due to improved market liquidity. While there is no timeline for implementation, market participants note that linking the Swiss ETS to the EU’s system took nearly a decade. Still, the potential economic efficiency and regulatory clarity have made the EU and UK carbon markets discussion a top priority for energy-intensive sectors across Europe.

Shared Climate Goals, Independent Ambitions

The agreement stressed that neither side should be constrained from pursuing more ambitious climate goals. The UK’s ETS remains guided by the legally binding Climate Change Act and its Paris Agreement commitments. The UK targets a 68% GHG reduction by 2030 and 81% by 2035, compared to 1990 levels. The EU aims for a 55% net reduction by 2030 and is still shaping its 2035 benchmark. Despite regulatory differences, both jurisdictions reaffirmed their commitment to net-zero emissions by 2050. The agreement also includes cooperation on hydrogen, CCS, biomethane, and a potential UK entry into the EU’s internal power market—further aligning EU and UK carbon markets within a broader clean energy framework.

The Metalnomist Commentary

The potential linkage of EU and UK carbon markets signals a return to pragmatic climate diplomacy. While structural alignment will take time, the economic and environmental incentives suggest both sides are committed to meaningful integration—setting a precedent for future carbon market collaborations globally.

EU BEV Industry Faces Challenges Without Strong CO2 Targets and Tariffs

The European Union's battery electric vehicle (BEV) market is at risk of losing ground to Chinese-owned brands unless the EU enforces its planned CO2 emission reduction targets along with newly proposed tariffs on Chinese-made electric vehicles (EVs). According to Transport & Environment (T&E), a leading environmental lobby group, these measures are essential to maintaining the competitive edge of European carmakers. The European Commission announced today that it will proceed with provisional tariffs on Chinese-manufactured EVs, signaling a critical step in addressing market imbalances.

CO2 Targets Key to Curbing Chinese BEV Imports

T&E's analysis shows a significant increase in the market share of Chinese-owned BEV brands, projecting that imports will constitute over 12% of the EU market this year, up from 8% last year. In contrast, non-Chinese brands are expected to see a slight rise to 13%. Without the enforcement of CO2 reduction targets, T&E forecasts that Chinese brands could capture nearly 15% of the market by next year, a trend that could weaken local BEV producers unless incentives are aligned to encourage a shift towards carbon-neutral vehicles.

The EU has established CO2 targets that require all automakers to achieve net zero emissions across their fleets by 2035, with interim milestones starting next year. However, recent debates and scrutiny have created uncertainty, prompting resistance from industry players. Aurelien De Meaux, CEO of Electra, a Paris-based charging start-up, emphasized the need for policy stability, stating, "The path to 2035, including specific CO2 milestones, was established in 2014 and 2019. We rely on this stability to make informed and effective investments."

Tariffs Alone May Not Protect Western BEV Producers

While the European Commission's provisional tariffs aim to level the playing field, a report by the Rhodium Group suggests that tariffs alone might not suffice. Chinese brands continue to enjoy profit margins that can absorb the costs of EU tariffs, whereas Western brands like Tesla and BMW, which manufacture in China, could see diminished profitability if tariffs are enforced. This dynamic has led to concerns that the tariffs may inadvertently harm European carmakers with overseas production facilities.

Additionally, China's response to these tariffs has included the potential for retaliatory measures on other goods, and its automakers are considering expanding production capacity overseas. Since 2022, 11 Chinese-owned EV plants have been planned in Europe, but only three have advanced past initial planning, primarily due to tariff uncertainties.

The situation is further complicated by instability in the battery production sector. According to T&E, 59% of the planned battery production capacity in Europe is "less likely" to proceed by 2030, adding to the challenges faced by the EU's BEV industry. Maintaining a clear and consistent regulatory approach will be crucial to incentivizing local production and reducing dependency on imports, ensuring the long-term sustainability of Europe's BEV market.

EU Ferro-Titanium Prices Decline Amid Weak Demand and Russian Imports

Russian Ferro-Titanium

Ferro-titanium prices in the European and UK markets have faced a significant decline of 6.5% in the second half of 2024, driven by several key factors. The most notable reasons for this decrease include an ongoing influx of Russian ferro-titanium imports, weakening demand from steel mills, and a substantial drop in the cost of titanium scrap.

As of recent assessments, Russian ferro-titanium prices are sitting at $5.20–5.60 per kilogram of titanium delivered to Europe (import duty unpaid), representing a widening discount compared to European and UK market prices. Sellers in Europe, holding large inventories, are eager to offload their stock before the end of the year, while Russian producers are scrambling to secure contracts before sanctions take full effect on December 20, 2024.

Russian Imports and Weak Demand Pressure Prices

Historically, ferro-titanium prices see an uptick in the first quarter, driven by steel mills restocking and seasonal disruptions in scrap deliveries around late December and early January. This year, however, the expected price rally failed to materialize. Although European Union (EU) sanctions initially prompted some price increases due to mills tightening procurement terms, the continued influx of Russian imports has kept prices under pressure. While Russian ferro-titanium volumes to the EU have fluctuated, the EU has remained the largest importer of Russian material.

From January to August 2024, the EU imported 6,115 tons of Russian ferro-titanium, down from 8,018 tons in the same period of the previous year. However, in July and August, imports rose by 21% and 9%, respectively. Estonia and the Netherlands accounted for 70% of these imports, with Germany and Latvia sharing the remainder. Despite a drop in overall imports, the EU continues to face competition from other regions, particularly China, which has seen a rise in Russian ferro-titanium exports.

The lack of spot demand across multiple non-ferrous markets, including those adjacent to steel and aluminum industries, has been a contributing factor. The sluggish performance of Europe's automotive and construction sectors further dampened demand. Steel association Eurofer recently downgraded its 2024 steel consumption forecast to a 1.8% contraction, signaling weak prospects for the steel market in Europe. The closure of Volkswagen plants in Germany and ongoing industrial slowdowns have heightened concerns over Europe's economic outlook.

Titanium Scrap Costs and Market Outlook

The downturn in ferro-titanium prices has been exacerbated by a sharp drop in titanium scrap prices. In early October 2024, titanium turnings prices plummeted, prompting ferro-titanium prices to follow suit. As scrap dealers began releasing more material into the market, the availability of titanium scrap increased, driving down prices further. Currently, the spread between 90/6/4 titanium turnings and ferro-titanium in Europe is around $3 per kilogram, up from a year-to-date average of $2.81 per kilogram. In the U.S., titanium scrap prices have also fallen, with mixed turnings now priced at $0.90–1.00 per pound.

Scrap processors, sitting on high inventories of aerospace-grade turnings and solids, may push out more ferro-titanium grade material to free up space and generate cash flow before the year ends. This move could further intensify the downward pressure on ferro-titanium prices, as scrap processors attempt to liquidate their stocks.

Market Forecast and Challenges Ahead

Despite expectations of a price rebound, both short-term and medium-term forecasts for the ferro-titanium market remain uncertain. Eurofer has projected a 3.8% recovery in steel consumption by 2025, while the World Steel Association expects a 1.2% growth in the global steel market in 2025. However, these increases are unlikely to signal a full recovery, as they come after two years of contraction in the sector. As Europe grapples with economic challenges, the demand for ferro-titanium remains subdued, and prices are expected to stay under pressure in the coming months.

PCC BakkiSilicon Shutdown Highlights Crisis in European Silicon Market

PCC BakkiSilicon

Chinese and Brazilian Imports Drive Icelandic Plant Closure

PCC BakkiSilicon has announced a temporary shutdown of its Husavik silicon operations, citing worsening market conditions and ongoing trade challenges. The company plans to halt production from mid-July, with no set timeline for resumption. The focus keyphrase, “European silicon market,” underscores the broader industry disruption.

Price Pressures and Trade Disparities Force Layoffs

The first paragraph of PCC’s Q1 earnings report had hinted at a possible shutdown if market pressures continued. Now confirmed, the company attributes this decision to low-cost silicon imports from China and Brazil, which continue to undercut European production costs. Due to Iceland’s EFTA membership and lack of aligned tariffs with the EU, it remains vulnerable to duty-free imports, particularly from Asia. PCC warned that without regulatory action, the European silicon market may face long-term collapse.

EU Investigation Could Determine Silicon Industry’s Future

European stakeholders are awaiting the results of an EU safeguard investigation into silicon imports. PCC emphasized that without intervention, EU producers may face irreversible shutdowns. The shutdown at Husavik will result in 80 job losses, with only one furnace having been operational during Q1—leading to a 40% sales drop and an EBITDA loss of €9.5 million. PCC intends to implement improvement initiatives to prepare for a rapid restart when the European silicon market stabilizes.

The Metalnomist Commentary

The shutdown of PCC BakkiSilicon highlights the vulnerability of Europe’s silicon industry amid global trade imbalances. As China and Brazil flood the market with underpriced material, European producers face an existential crisis unless tariff harmonization and safeguard measures are urgently addressed.

EU Launches Review of Steel Import Safeguard Tariffs: Changes Expected from April 2025

The European Commission(EC)

The European Commission(EC) has officially launched a review of its steel import safeguard tariff-rate quotas, with proposed changes to take effect from 1 April 2025. This review, which follows a request by 13 EU member states on 29 November 2024, aims to address the evolving dynamics of steel imports into the EU. The focus will be on adjusting quotas, particularly in light of a contraction in EU demand and a rise in Chinese steel exports, which have led to shifts in trade flows.

Key Changes Under Review for Steel Safeguard Tariffs

The EC's review will examine several key aspects of the current steel import safeguard measures. Among the possible changes is the introduction of a new quota volume. EU steel producers have expressed concerns that current duty-free quota volumes no longer align with the demand in the EU, with some regions experiencing gaps due to shrinking consumption. Additionally, an increase in Chinese steel exports has led to an influx of steel from other countries into the EU market, further complicating the allocation of quotas.

The EC will reassess how these quotas are managed and allocated. Producers and users have been invited to provide feedback via a questionnaire, which must be submitted by 10 January 2025. Some of the other factors under evaluation include the exclusion of certain developing countries from the safeguard measures based on their 2024 imports, as well as potential updates to the level of liberalization within the quotas.

The steel safeguard measures, which were first introduced provisionally in 2018, became definitive in 2019. Initially set for a three-year period, they were extended for another year until June 2024 and then further extended until June 2026. Recent updates to these measures have had a noticeable impact on trade, particularly with the cap on hot-rolled coils (HRC) and wire rod quotas from ‘other countries’ being limited to 15% per origin. This has resulted in a significant reduction in import opportunities, especially for smaller markets.

The Impact of the Quota Review on Steel Imports

The current steel import safeguard measures have significantly impacted trade flows within the EU. In previous years, quotas would exhaust quickly after being reset each quarter, but the 15% cap on 'other countries' volumes has left a larger portion of the quotas underused. While there were expectations that some countries, like South Korea, could increase exports to the EU in April 2025 when residual quota volumes become available, the upcoming review could alter this outlook.

With EU imports largely unaffected by these changes so far due to a rush to buy final volumes before the duties apply, the redistribution of quotas will be a key focus of the review. The EC aims to ensure that the safeguard measures strike a balance between protecting EU producers and allowing for sufficient import access to meet demand. These changes, when finalized, could have significant implications for steel producers and importers alike, influencing trade relationships and steel prices in the EU market.

China's Lithium Tech Export Curbs Threaten EU Battery Industry

China's Lithium Battery

Key Technology Export Controls Put European Battery Industry on Edge

China's proposed restrictions on exporting key lithium processing technologies are sending shockwaves through the European Union's (EU) burgeoning battery industry. The proposed curbs target crucial equipment used in lithium extraction and battery material production, including lithium-iron-phosphate (LFP) battery production equipment, cathode preparation technology, and direct-lithium-extraction (DLE) technology, particularly from spodumene and brines. A consultation period is open until February 1st, after which a final decision will be made.

Europe's Reliance on Chinese Technology Raises Concerns About Supply Chain Security

Industry experts warn the impact could be significant, especially for junior European lithium producers heavily reliant on Chinese technology. Companies like Northvolt, which recently announced job cuts and scaled back ambitions, highlight the vulnerability of the EU's current strategy. The restrictions could hinder the development of a robust, independent European battery supply chain.

Companies with In-House Technology See Opportunity Amidst Crisis

However, some companies are better positioned to weather the storm. Vulcan Energy Resources, an Australian company with operations in Europe, claims to have developed in-house absorption-type DLE technology, securing its supply chain and potentially offering solutions to other European players. Vulcan Energy Resources' executive chair, Francis Wedin, emphasized the strategic advantage of their technology, particularly given Goldman Sachs's preference for brine-based lithium extraction due to lower production costs.

European Lithium Market Faces Uncertainty and Calls for Action

Other voices in the European lithium market paint a more concerning picture. Viridian Lithium's chief commercial officer, Luc Pez, warned of potentially "extremely disruptive" consequences for the nascent ex-China battery supply chain. Pez criticized the lack of preparedness in Europe and the US, urging for accelerated reshoring of the battery supply chain and addressing regulatory inconsistencies within the EU. He highlighted the urgent need for Europe to establish concrete plans and achieve its targets in the face of increasing competition from China in the electric vehicle market.

The Future of European Electric Vehicle Market Hangs in the Balance

China's proposed export restrictions underscore the geopolitical complexities of the lithium market and the challenges facing Europe's ambitions in the electric vehicle sector. The move could significantly impact the development of the European electric vehicle market, as the EU aims to reduce its reliance on China for battery supply.

EU Steel Industry Faces Key Policy Shifts: A Call for Concrete Measures

EU Steel

The mood among European policy makers regarding the steel industry has notably shifted, with increasing support for the sector’s future. According to Axel Eggert, director-general of Eurofer, the European steel industry association, policymakers are beginning to recognize the importance of addressing the growing challenges in global steel production. However, while this shift in mood is encouraging, Eggert emphasized that these positive words must be followed by tangible actions.

Rising Political Support for EU Steel Industry

Eggert pointed out that there is more political backing for the European steel sector, especially as lawmakers become increasingly aware of the massive overcapacity in global steel production, particularly CO2-intensive steel. The Organization for Economic Cooperation and Development (OECD) predicts that global steel capacity will grow by 157 million tons over the next three years, which will likely negate the decarbonization efforts of the EU steel industry.

In response, the European Parliament has called for a European steel action plan, which has been embraced by European Commission President Ursula von der Leyen. However, Eggert stressed that while these statements are promising, they must be followed by concrete measures to ensure the long-term sustainability of the industry.

Green Steel and Public Procurement as Key Measures

One of the critical measures that Eggert advocates for is the implementation of public procurement for green steel. With the EU's ambitious decarbonization targets — a 55% reduction in CO2 emissions by 2030 and carbon neutrality by 2050 — Eggert emphasized that EU governments should lead by example. This means prioritizing green steel in public sector construction, vehicles, and other products, which would support European producers committed to decarbonizing their operations.

Global Overcapacity and Trade Distortions Impacting EU Steel

The steel industry crisis is largely driven by global overcapacity and low demand in Europe, exacerbated by high energy costs. Compounding this issue is the low-priced steel being exported by countries like China, Japan, and India, which depresses global markets. China’s exports, in particular, have been an issue for EU steel producers, as the country benefits from state subsidies, leading to significant trade distortions.

Eggert discussed how the EU has implemented anti-dumping measures on stainless steel from Indonesia, but Indonesia has circumvented these by exporting processed steel to third-party countries like Taiwan, Vietnam, and Turkey, which then re-export the products back to the EU. This tactic, along with the support from Chinese investments in Indonesia’s steel industry, has made Indonesia’s steel sector one of the largest globally.

EU Trade-Defense Measures: Need for Improvement

Eurofer has called for enhanced EU trade-defense measures to tackle issues such as dumping and excessive capacity from third countries. Eggert emphasized the need for improved steel safeguards and more effective enforcement of existing trade defense instruments. Currently, anti-dumping duties on Chinese steel are too low, undermining the efficacy of EU trade policies.

Carbon Border Adjustment Mechanism (CBAM) Concerns

The EU’s carbon border adjustment mechanism (CBAM) has been another point of contention. Third countries are already looking to export steel from their lowest CO2-emitting plants to avoid paying CBAM costs. Eggert advocated for including indirect CO2 emissions (Scope 2 emissions) in the CBAM, particularly for stainless steel, which is a major contributor to indirect emissions.

Scrap Export Concerns and India's Decarbonization Challenge

Finally, Eggert addressed concerns from India regarding the potential for a European export ban on scrap metal. While the EU does not currently have a scrap export ban, Eggert pointed out that India itself has export restrictions on scrap and needs to focus more on decarbonizing its domestic steel sector. He also warned that if India delays its decarbonization efforts until 2070, the EU will face a significant disadvantage in the global steel market.

India's Manganese Alloy Imports Surge, Prompting EU Trade Protection Measures

Manganese Alloy

Rising Indian Imports Disrupt European Manganese Market

India's manganese alloy exports to Europe have surged, reshaping market dynamics and triggering a safeguard investigation by the European Commission. In January-November 2020, India accounted for only 3% of EU ferro-manganese imports, but by 2024, this share skyrocketed to 28%, totaling 104,376 metric tons.

The silico-manganese market also saw a dramatic shift. India’s share of EU silico-manganese imports grew from 10% in 2020 to 29% in 2024, reaching 164,722 metric tons. Other countries, including Georgia and Zambia, also expanded their presence, filling gaps left by Ukraine’s production collapse due to conflict with Russia.

European Producers Struggle to Compete

European manganese alloy producers have faced declining exports amid India's rising market share. France, Slovakia, and Spain saw major drops in silico-manganese exports between 2020 and 2024. France’s exports fell 64%, while Slovakia and Spain recorded declines of 35% and 11%, respectively.

Similarly, EU ferro-manganese exports have weakened. France's shipments fell 28%, while Slovakia’s exports dropped 47%. These declines stem not only from rising Indian competition but also from weaker demand in the EU stainless steel industry.

EU Commission Launches Safeguard Investigation

To protect European manganese and silicon-alloy producers, the European Commission initiated a safeguard investigation on December 19, 2024. Possible outcomes include higher customs duties or import quotas.

European buyers have increased their purchases of Indian manganese alloys in anticipation of potential restrictions, driving Indian manganese alloy prices higher in January. Meanwhile, Norwegian producers, who supply 40% of ferro-manganese and 35% of silico-manganese to Europe, are expected to receive exemptions from trade measures.

Germany Pushes EU to Impose Aluminium Scrap Export Tariffs

Aluminum Scrap

Rising US demand sparks supply concerns and threatens Europe’s circular economy framework

Aluminium Deutschland Warns of Scrap Outflow Risk

Germany's aluminium industry group, Aluminium Deutschland, has urged the EU to impose aluminium scrap export tariffs. This demand follows the United States’ decision to implement a 25% tariff on primary aluminium imports, while keeping aluminium scrap exempt from the tariff.

As a result, US buyers are likely to switch from importing primary aluminium to sourcing cheaper scrap — particularly from Europe. This shift could lead to a serious shortage of scrap for European recyclers, who rely on stable domestic supply for their operations.

US-EU Price Gap Accelerates Market Arbitrage

The arbitrage between US and EU aluminium prices has widened sharply in recent months. According to market data, the premium gap surged from $110/t in November to nearly $700/t in early May 2025. This creates a strong incentive for exporters to redirect scrap to the US market, further tightening EU supply.

Aluminium Deutschland emphasized that this trend could undermine Europe’s recycling industry. President Rob van Gils called for “swift and decisive action” to avoid dismantling years of progress in circular economy infrastructure.

Europe Faces Growing Scrap Scarcity

Europe's aluminium scrap supply is already strained. Sluggish industrial activity has lowered fresh scrap generation, while Asian demand remains strong, forcing EU recyclers to compete globally. If the EU does not act, companies could face escalating shortages, threatening decarbonisation goals and raw materials security.

The Metalnomist Commentary

Germany’s call for aluminium scrap export tariffs reflects a growing geopolitical competition over raw materials. As secondary aluminium becomes a substitute for tariffed primary metal, the EU risks losing strategic feedstock to global arbitrage. Scrap policy will increasingly define the success or failure of Europe’s industrial climate goals.

 

China Escalates Countermeasures in Response to EU Electric Vehicle Tariffs

China has intensified its response to the European Union's new countervailing duties on battery electric vehicles (BEVs) originating from China, highlighting growing trade tensions between two major economic blocs.

Beijing is now weighing an increase in tariffs on large-displacement fuel vehicles imported from Europe, a significant move given the EU’s status as a leading exporter of high-displacement cars to China. According to China’s Ministry of Commerce, approximately 88,000 such vehicles with engine displacements over 2.5 liters were imported from Europe in the first seven months of this year alone.

Duties Target Major Chinese EV Producers

This escalation follows the EU's recent decision, enacted on October 4, to approve five-year tariffs on BEV imports from China, impacting the market for Chinese automakers. BYD, China’s largest new energy vehicle producer, will face a tariff rate of 17%, consistent with the EU's initial August proposal. Geely, another major player, saw its duty set at 18.8%, slightly down from an earlier proposed 19.3%. State-owned SAIC will face a significantly higher tariff of 35.3%, slightly reduced from an initial 36.6%. Notably, US-based Tesla, which manufactures in China for export, will contend with a 7.8% duty, down from a previously proposed 9%.

The Ministry of Commerce has indicated that it will continue to negotiate with EU counterparts but asserts it is prepared to take "firm" actions to protect Chinese commercial interests. BYD’s rapid expansion in the European market, selling over 23,000 BEVs between January and August—a doubling of last year’s figures—demonstrates China’s foothold in the region. Tesla, meanwhile, sold roughly 198,000 units in the same period, marking a 16% decrease from the previous year.

Tensions Expand Beyond the EU

China's retaliation isn’t limited to the EU alone. The country has launched a complaint with the World Trade Organization against Turkey over its recent imposition of a 40% tariff on Chinese EVs, a measure Turkish President Recep Tayyip Erdogan introduced to stimulate Turkey's domestic electric vehicle market.

China has additionally undertaken countervailing and anti-dumping investigations into a variety of EU exports, including dairy products and pork. On October 8, Beijing imposed provisional anti-dumping duties on brandy imports from Europe, underscoring China’s readiness to diversify its retaliatory measures across multiple sectors.

Global Battery Demand Nears 1TWh in 2024 as LFP Market Share Surges

Battery

EV Growth and China Lead Surge in Battery Demand

Global battery demand reached nearly 1TWh in 2024, largely driven by rising electric vehicle (EV) adoption, according to the IEA's latest EV Outlook 2025. The Focus Keyphrase "global battery demand" continues to dominate energy transition narratives as EV sales accelerate across major economies.

EV battery demand alone exceeded 950GWh, accounting for more than 85% of total battery consumption. China led with 59% of EV battery demand, followed by the U.S. and EU, each holding a 13% share. The IEA projects battery demand will more than triple to over 3TWh by 2030 under current national policies. While supply of critical minerals is currently in surplus, the IEA warns that depressed prices could deter future investment, risking lithium and nickel shortages by decade’s end.

Battery Manufacturing Grows Faster Than Demand

Global battery manufacturing capacity grew by nearly 30% to 3.3TWh in 2024, tripling actual demand. If all announced projects proceed, capacity could reach 6.5TWh by 2030, outpacing the IEA’s projected demand.

South Korea led overseas battery capacity expansion with over 400GWh deployed in 2024, far ahead of Japan (60GWh) and China (30GWh). If planned projects materialize, South Korea could produce over 1TWh annually by 2030, almost double China’s expected output. As a result, China’s global manufacturing share is projected to fall from 85% in 2024 to two-thirds by 2030, diversifying global supply chains.

LFP Dominates Market as Regional Dynamics Shift

Lithium iron phosphate (LFP) batteries now make up nearly half of the global EV battery market, with Chinese producers holding a de facto monopoly, especially in Europe and the U.S. European OEMs are increasingly opting for LFP chemistries to cut costs, displacing South Korean suppliers.

South Korean battery makers’ EU market share fell to 60% in 2024, down from 80% in 2022, while their U.S. market share rose to 35%, closing in on Japan’s 48%. Major Korean firms — LG Energy Solution, SK On, Samsung SDI — are all preparing for mass LFP production to compete in this fast-growing segment.

Meanwhile, LFP adoption in Southeast Asia, Brazil, and India has surpassed 50% of battery electric car sales, signaling rapid global penetration. However, Japanese battery makers face domestic setbacks, highlighted by Nissan’s cancellation of its Kyushu LFP plant amid restructuring.

The Metalnomist Commentary

The rise in global battery demand underscores a structural transformation in energy, mobility, and manufacturing. While demand growth is robust, the oversupply of battery capacity and volatility in mineral prices highlight the sector’s growing pains. As LFP continues its global ascent, regional competition and vertical integration will shape the future of the battery ecosystem.

EU’s Copper Imports Increase in 2024 Despite Weak Demand in Germany

EU’s Copper Imports

Refined copper imports to the EU rose by 3.2% in 2024, led by Italy and Spain, despite falling demand in Germany.

Imports Rise, But Key Markets Show Strain

EU countries imported 1.71 million tonnes of refined copper in 2024, a 3.2% increase year on year, according to customs data. Italy remained the bloc’s top importer with 543,363 tonnes, representing 32% of total EU imports.

Germany, however, experienced a 13% drop in copper imports, falling to 413,245 tonnes. This reflects persistent challenges in Germany's industrial sectors due to rising energy prices and sluggish demand. The effects of the Covid-19 aftermath and Ukraine-related energy shocks have slowed recovery across EU economies.

Spain, Sweden, and the DRC See Significant Gains

Meanwhile, Spain increased its refined copper imports by 28%, reaching 142,231 tonnes, showing resilience in its industrial sectors. Sweden saw the largest year-on-year growth, with 119% more imports, totaling 107,794 tonnes.

On the supply side, Chile remained the largest exporter, delivering 307,885 tonnes to the EU — a 21% increase from 2023. The Democratic Republic of Congo (DRC) overtook Poland as the second-largest supplier, with 200,992 tonnes, up 11%. Together, Chile, DRC, and Poland made up 40% of the EU’s total refined copper supply in 2024.

Despite an overall 2.9% rise in global copper consumption, the EU market remains fragile. According to the International Copper Study Group, weak demand from automotive and construction sectors continues to weigh on European copper use.

The Metalnomist Commentary

The EU’s rising copper imports contrast sharply with the weakening of its core manufacturing sectors. Germany’s downturn reflects broader industrial deceleration, while southern and northern Europe appear more resilient. As the energy transition accelerates, copper sourcing will remain a geopolitical and industrial priority — and import trends are the first signal to watch.

EU to Launch Aluminium Safeguard Probe Amid Rising Import Pressure

EU Aluminium

New U.S. Tariffs and CBAM Adjustments Prompt EU to Rethink Aluminium Trade Policy

Brussels Acts to Shield European Aluminium Industry

The European Commission will launch a safeguard investigation on 19 March to assess the need for trade defense measures on aluminium imports. This move responds to fears that U.S. tariffs will redirect global aluminium flows into Europe.

Washington reintroduced 25% import tariffs on steel and aluminium on 12 March, prompting the EU to act. European producers risk losing U.S. market access while facing increased inflows of diverted metal. Unlike steel, aluminium is not yet protected by EU safeguard measures.

Since 2021, over half of Europe’s aluminium smelting capacity has been curtailed. Today, just 46% of EU aluminium demand is sourced domestically. The Commission warns that continued pressure from imports threatens the survival of remaining producers.

New 'Melt and Pour' Rule and CBAM Reform

In addition to safeguard measures, the Commission will implement a new “melt and pour” rule. This rule defines the origin of metal products based on where they were originally melted—not where they were later processed. It aims to block minimal transformations that allow products to bypass tariffs or dumping duties.

The carbon border adjustment mechanism (CBAM) will also undergo revisions. The proposed update would extend the carbon levy to more aluminium- and steel-intensive downstream products. This adjustment addresses concerns that carbon-intensive imports could undercut EU-made goods, which comply with stricter climate rules.

The EU also plans to address carbon leakage. It will design compensation mechanisms for CBAM-regulated goods exported from the EU, with new anti-circumvention rules due in Q4 2025, before CBAM fully activates in 2026.

Scrap Export Restrictions and Demand Boosts Ahead

To secure domestic raw materials, the EU plans to tighten scrap metal export controls. The Commission will explore reciprocal restrictions on countries that limit scrap exports to the EU and may impose new charges on outbound scrap.

By the end of 2026, the EU will propose new demand-side targets for steel and aluminium usage in critical sectors like construction. These measures aim to support domestic producers while aligning with climate and circular economy goals.

CBAM to Add 15-25% Surcharge to EU Steel Import Costs Starting January 2026

EU Steel

The European Union's Carbon Border Adjustment Mechanism (CBAM) will impose 15-25% surcharges on CBAM steel import costs when full implementation begins January 1, 2026, according to Euranimi analysis. The European Association of Non-Integrated Metal Importers & Distributors warned that these additional costs will vary significantly depending on product type and country of origin. Steel importers face substantial cost increases as CBAM steel import costs rise through carbon pricing mechanisms designed to protect EU domestic steel producers from unfair competition.

CBAM Calculation Formula Creates Variable Cost Impact Across Origins

The CBAM surcharge calculation uses a specific formula measuring the difference between embedded emissions and 97.5% of EU benchmark standards multiplied by emissions trading system (ETS) pricing. This methodology ensures that steel imports face carbon costs comparable to EU domestic production under the emissions trading system. Meanwhile, Euranimi recommends that suppliers introduce separate CBAM surcharge lines in commercial offers, similar to existing alloy surcharge practices in steel trading.

Market participants anticipate significant import pattern changes as CBAM implementation approaches, with potential steel import surges in the fourth quarter of 2025. Importers may accelerate purchases before January 2026 to avoid initial CBAM steel import costs and associated compliance complexities. However, steel imports could decline sharply after January as buyers adjust to higher costs and new administrative requirements.

Implementation Timeline Creates Uncertainty for Steel Trade

Euranimi collaborates with the European Commission to develop "manageable" CBAM implementation procedures that minimize trade disruption while achieving environmental objectives. The association requests June publication of temporary benchmarks and default values for 2026 imports to provide market clarity. As a result, transitional benchmarks should be less strict initially while default values require reasonable levels to manage compliance costs.

Steel importers face significant uncertainty because verified emission data from non-EU suppliers won't be available until late 2026 at the earliest. Default values will play crucial roles in managing CBAM steel import costs during this transition period without verified supplier data. Therefore, appropriate default value settings prevent excessive financial exposure from unforeseen corrections and compliance adjustments.

The CBAM implementation represents a fundamental shift in global steel trade dynamics, creating competitive advantages for low-carbon steel producers while penalizing high-emission suppliers. European steel importers must adapt business models to incorporate carbon costs into pricing strategies and supplier selection processes. Consequently, CBAM steel import costs will reshape trade flows and encourage global steel industry decarbonization efforts through market mechanisms.

The Metalnomist Commentary

The 15-25% CBAM surcharge on steel imports marks a pivotal moment in global trade policy, potentially reshaping steel supply chains as importers seek lower-carbon suppliers to minimize carbon border costs. This mechanism could accelerate global steel industry decarbonization by creating economic incentives for cleaner production technologies, though it also risks disrupting established trade relationships and creating competitive disadvantages for developing country steel producers lacking access to clean technology.

Trade Measures to Dominate Steel Industry in 2025: Focus on Imports and Global Overcapacity

China Steel Factory

Trade protection measures have been the focal point of the global steel industry throughout 2024, with little indication of this trend slowing down in 2025. Steel producers, industry associations, and governments worldwide are increasingly advocating for stronger import barriers to safeguard domestic markets and improve the competitiveness of their industries. In particular, European steel mills have been at the forefront of this movement, calling for more robust action to combat what they view as unfair imports and growing overcapacity in the global market.

European Steel Industry Pushes for Stronger Import Protection

Eurofer, the industry association for European steel manufacturers, has been particularly vocal about the need for stronger trade defence instruments. The association has urged the European Union to implement short-term emergency measures, including import tariffication, to curb the influx of low-cost steel products. Eurofer's stance has been largely driven by the EU’s ambitious decarbonisation goals, with the bloc committing billions of euros in investment. Steel producers argue that the EU's current measures are insufficient, particularly in light of increasing steel imports from countries with lower production costs and fewer environmental regulations.

Significant progress has already been made, with Eurofer helping secure changes to the EU’s safeguard system for key products like hot-rolled coils (HRC) and wire rods. Additionally, the EU anti-dumping investigation targeting several HRC suppliers has gained traction, and further investigations are planned on downstream steel products. As European steel suppliers continue to collect evidence of unfair trade practices, more scrutiny is expected on countries like China, India, and Vietnam.

The Impact of Global Overcapacity and Chinese Steel Exports

The issue of global steel overcapacity has also been a major concern. The OECD has raised alarms about the growing steel production capacity, projecting a 158 million tonnes per year increase in global capacity between 2024 and 2026. This expansion, however, comes at a time when global steel demand remains uncertain. Despite this, steel exports from non-OECD countries have been recovering since 2023, particularly from China, whose steel exports surged by 22.6% from January to November 2024.

China has also been exporting record volumes of semi-finished steel, despite the country’s preference for exporting higher-value products. As China continues to ramp up exports, it has attracted the attention of both European and global policymakers, leading to new protectionist measures targeting Chinese steel. This includes potential investigations and pending duties on Chinese steel, which could affect up to 15 million tonnes per year of exports.

Countries like India, Vietnam, Indonesia, and Malaysia are also seeing increases in steel exports, contributing to the global capacity glut. Turkey, a major market for Chinese steel, has already imposed duties on imports from China, India, Russia, and Japan in response to the increasing influx of steel from these regions. The EU is similarly considering the inclusion of Indonesia in its safeguard measures due to the country’s rising steel exports to Europe. From July to October 2024, Indonesia exported 494,650 tonnes of HRC to the EU, surpassing the previous half-year period, a trend that is expected to continue.

Investigations and Measures Targeting Global Steel Exporters

The growing export volumes from India and Vietnam, along with the rise in Indonesia’s exports to Europe, have prompted investigations into dumping practices in these countries. The EU has already initiated anti-dumping investigations on steel products from Egypt, Japan, India, and Vietnam, with the preliminary results of these investigations expected in March 2025. If these investigations lead to findings of unfair trade practices, retroactive duties could be applied, further tightening global trade conditions.

In response, producers are gearing up for a potential wave of new safeguard measures and anti-dumping duties. Countries that are impacted by these measures may look to retaliate, creating a complex global trade landscape for steel. As trade protectionism increases, the global steel market is expected to undergo significant shifts in the coming years.