EU Steel Demand Faces CBAM Risk Before 2028 Downstream Extension

EU Steel

EU steel demand could face significant pressure between 2026 and 2028 as carbon border adjustment costs apply to steel before they fully extend to downstream steel-consuming goods. European market participants warn that this timing gap could encourage imports of finished steel derivatives and weaken demand for EU-made steel.

The risk comes from the structure of CBAM implementation. Steel products will carry annual CBAM-related mark-ups before many downstream products are covered. As a result, imported finished goods with high steel content could become more competitive than goods manufactured inside the EU using CBAM-exposed steel.

EU steel demand is therefore exposed to a policy mismatch. CBAM aims to protect European industry from carbon leakage, but an uneven rollout could shift pressure from steel imports to finished product imports. That would create a new competitiveness problem for service centres, distributors, fabricators, machinery producers, vehicle parts makers, and appliance manufacturers.

Downstream Imports Could Undermine European Steel Consumption

Downstream steel-consuming goods are becoming a central concern for European industry. Product categories under discussion include car parts, specialised vehicle components, home appliances, machinery parts, and yellow goods. These sectors consume large volumes of steel and play a major role in sustaining regional industrial demand.

A proposed response is to create safeguards for selected downstream products before the 2028 CBAM expansion. The idea is to identify key HS codes for EU-manufactured products with high steel content and establish a quota system similar to existing steel safeguards.

This approach reflects a growing concern that steel protection alone may not protect the steel value chain. If downstream manufacturers lose competitiveness, EU steel demand could weaken even if direct steel imports fall. The strategic issue is not only steel trade, but the survival of manufacturing demand inside Europe.

Steel Safeguards and Weak Orders Add Pressure to the Market

The new version of EU steel safeguard measures is still expected to take effect in July. However, market participants remain concerned about World Trade Organisation compliance, especially as the EU negotiates free-trade agreements that may include country-specific quotas.

Market sentiment is already weak. European service centres reported soft order intake in February, with some seeing volumes 10-20pc lower than a year earlier. This points to sluggish industrial activity and limited confidence across the steel distribution chain.

Import reliance may also decline this year. Some service centres expect imported material to fall to around 20pc of flat steel use, compared with as much as 40pc in previous years. That shift may support EU mills, but it also reflects a more controlled and uncertain market environment rather than a broad recovery in demand.

The Metalnomist Commentary

The EU’s steel challenge is no longer only about protecting mills from imported coil. The real risk is demand leakage, where downstream production moves outside Europe before CBAM fully covers finished steel-intensive goods.

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.

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.

US Steel Gary Tin Mill Restart Targets Domestic Tinplate Supply Security

US Steel

US Steel Gary Tin Mill production is set to restart in early 2027 as the integrated steel producer moves to rebuild domestic tin coated steel supply. The idled facility is part of US Steel’s wider Gary Works complex in Indiana.

The US Steel Gary Tin Mill has roughly 500,000 short tons of idled capacity across two production lines. The mill has been offline since 2022, but the company now plans to bring it back after maintenance, equipment inspection, material procurement and workforce preparation.

US Steel Gary Tin Mill restart costs are estimated at $15mn-20mn. The investment is relatively modest compared with a greenfield project, but the industrial significance is larger because tin coated steel has become a more sensitive domestic supply issue.

The restart comes as US customers seek more dependable local supply for packaging and industrial applications. It also reflects a wider shift toward trade protection, domestic manufacturing resilience and reduced exposure to imported coated steel products.

Trade Cases Support Domestic Tin Coated Steel Production

US Steel framed the restart as a response to domestic tin demand in a more protectionist trade environment. The company said customers are increasingly focused on long-term domestic supply security.

On 9 April, US Steel and the United Steelworkers union filed an antidumping duty case against China, Taiwan and Turkey. The case covers imports of tin and chromium coated sheet steel.

A separate countervailing duty case was also filed against subsidised tin coated steel products from China. These trade actions could support domestic producers if authorities determine that imports are unfairly priced or subsidised.

The timing is important. Restarting the Gary Tin Mill would give US Steel more capacity to serve customers if duties raise import costs or reduce import availability.

Tin coated steel is used in food and beverage packaging, aerosol products and oil filtration goods. These are not speculative markets. They are established industrial and consumer supply chains where reliability, quality and delivery timing matter.

The restart also gives US Steel a stronger position in value-added flat steel. Tinplate and coated sheet require specific finishing capability and customer qualification, making them more specialised than commodity hot-rolled or cold-rolled products.

Packaging and Industrial Buyers Seek Reliable Local Supply

The Gary Tin Mill restart reflects the growing importance of domestic supply in packaging materials. Food and beverage packaging depends on consistent access to tin coated steel, especially for cans and other shelf-stable products.

Aerosol products and oil filtration goods also rely on coated steel for corrosion resistance, formability and product protection. These applications require stable quality and predictable supply from qualified mills.

Domestic buyers have become more sensitive to import risk. Tariffs, antidumping cases, logistics disruption and geopolitical uncertainty can all affect material availability and pricing.

US Steel’s restart could help reduce that risk by returning idled capacity to the market. However, the impact will depend on how smoothly the company completes maintenance and prepares the required workforce.

The early 2027 timeline also matters. Buyers facing uncertainty in 2026 will not see immediate supply relief, but the restart could improve medium-term market confidence.

For the US steel industry, the project shows how idled finishing capacity can regain strategic value under trade protection. Instead of building new capacity from scratch, companies can reactivate existing assets when market conditions and policy support improve.

The broader message is clear. Domestic steel supply security is expanding beyond primary steelmaking. Coated, finished and application-specific steel products are also becoming part of the industrial resilience debate.

The Metalnomist Commentary

The US Steel Gary Tin Mill restart shows how trade protection can revive idled downstream steel capacity. The key question is whether domestic buyers will commit enough demand to support the restart beyond the current tariff and trade-case cycle.

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.

China’s Predatory Steel Exports : A Threat to Latin America

The Latin American steel industry is grappling with a severe crisis precipitated by China’s predatory trade practices. The influx of cheap Chinese steel has flooded the market, imperiling local producers' livelihoods. Gabriela Fajardo Mejia, an expert in international relations at the University of Navarra, highlighted in her interview with Diálogo Américas that China’s steel overproduction endangers 1.4 million jobs across Latin America’s steel sector, compelling numerous companies to cease operations and lay off workers. Furthermore, Chinese steel production often bypasses established environmental and quality standards, with transparency regulations being routinely ignored.

Henry Ziemer, a researcher at the Center for Strategic and International Studies (CSIS), pointed out that China's slowdown in real estate and construction has diminished domestic steel demand. Consequently, Chinese producers are compensating for reduced domestic sales through aggressive export strategies. With the U.S. market becoming increasingly inhospitable for Chinese steelmakers, they are now targeting Latin American countries, which present fewer trade barriers, to dispose of their surplus inventory.

The Chinese government's subsidies for steel production and exports during the pandemic exacerbated the issue, leading to a global proliferation of low-cost Chinese steel. In retaliation, Mexico, Chile, and Brazil have significantly raised tariffs on Chinese steel imports to safeguard their domestic industries, and other nations are expected to follow suit. Alejandro Wagner, the former Secretary-General of the Latin American Steel Association (Alacero), indicated in a BBC interview that the influx of inexpensive Chinese steel has caused significant damage to Latin American steel industries, forcing several major companies to halt their operations.

In March, Chilean steelmaker CAP suspended operations at its Huachipato plant due to the unsustainable business environment created by dumped Chinese steel. Operations resumed only after the Chilean government imposed substantial tariffs on Chinese steel. Similarly, Fabio Galan, president of Colombian steelmaker Acerías Pazdelrio, remarked on the devastating economic impact of cheap Chinese steel imports and called for fair competition.

Reports also suggest that Mexico’s iron ore mines, previously plundered by organized crime cartels, were pivotal in transporting stolen ore to China, highlighting the detrimental effects of China’s opaque and unfair trade practices.

Brazilian steel producer Gerdau temporarily laid off workers at its São José dos Campos plant in response to the unfair competition from Chinese steel. CEO Gustavo Werneck emphasized that this action was merely the initial step in tackling the surge of cheap Chinese steel imports.

Fajardo Mejia underscored the subsidies Chinese steel companies receive, enabling them to lower costs without adhering to quality and environmental standards. She also noted the considerable environmental impact, revealing that Chinese steel production emits 45% more CO2 per ton than Latin American production.

As a countermeasure, imposing tariffs on Chinese steel could escalate trade tensions between Latin American countries and China, with potential retaliatory actions from China, known for its coercive diplomacy. Historical instances, such as China’s bans on Argentine soybean products and Canadian canola seeds, exemplify possible consequences.

CSIS researcher Ziemer highlighted that China, the world’s largest steel producer, generates more steel than the combined output of the next nine largest producers, influencing international prices and destabilizing Latin American economies through dumping practices. He proposed that the current scenario offers an opportunity for the U.S. to collaborate with Latin American countries to counteract China’s unfair trade practices and safeguard domestic industries.

China steel industry stabilisation plan targets growth, discipline and greener output

China Steel

China’s new China steel industry stabilisation plan signals a renewed push to manage growth, capacity and pricing discipline. The government aims for around 4pc added value growth in 2025-26 while phasing out inefficient mills and banning new crude steel capacity. As a result, Beijing is trying to balance supply and demand through market-based elimination rather than another blunt production crackdown.

The China steel industry stabilisation plan prioritises competitive, higher-quality producers over weaker players. Authorities will curb “unfair competition” and “disorderly” low-price behaviour that has weighed on margins across the sector. Therefore, the plan supports consolidation around strong mills and seeks a more sustainable pricing environment for both long and flat steel products.

At the same time, the plan highlights technological upgrading, high-grade steel, and raw material security as core pillars. It calls for expanded investment to modernise production lines, accelerate low-carbon technologies and deepen the green energy transition. This innovation agenda links the China steel industry stabilisation plan directly to national strategies on industrial upgrading and decarbonisation.

Market reacts as China steel industry stabilisation plan lifts sentiment

Steel futures and spot prices reacted quickly to the announcement, even as underlying demand stayed soft. January rebar futures rose by 0.85pc to Yn3,185/t, and more than 10 mills lifted ex-works rebar offers by Yn30-50/t. However, physical trading volumes in rebar and flat products remained subdued despite the firmer sentiment.

Coking coal markets showed a more cautious response. January coking coal on the Dalian exchange closed just 0.12pc higher at Yn1,217.5/t. Many participants are still assessing how strictly the China steel industry stabilisation plan will be enforced and what it means for blast furnace operating rates. For now, sentiment in domestic coking coal remains stable rather than bullish.

Recent production data underline why Beijing is acting now. China’s crude steel output in August fell by 0.7pc year on year to 77.36mn t. January-August crude steel output dropped 2.8pc to 671.81mn t, reflecting weaker construction and real estate demand. In 2024, the top five producing provinces saw crude steel output fall 3.2pc to 522.73mn t, still accounting for 52pc of national output.

Supply-side reform echoes and the road ahead for China’s steel sector

President Xi Jinping has already signalled a political push against “disorderly low-price competition” and outdated capacity. Many market participants see the new plan as an echo of the 2015-17 supply-side reforms that aggressively cut overcapacity. However, most small, inefficient mills were already removed in that earlier cycle, leaving fewer obvious targets today.

Therefore, the next phase will likely focus on quality, emissions and efficiency rather than headline tonnage cuts. The China steel industry stabilisation plan emphasises precise capacity and output control instead of blanket production caps. That approach favours large, integrated groups with the capital to invest in green technologies, premium steel grades and digitalisation.

At the same time, Beijing wants to maintain enough capacity to support infrastructure, manufacturing and strategic industries. Balancing overcapacity risks with growth and employment remains a delicate task. How effectively the China steel industry stabilisation plan navigates this tension will shape global iron ore, coking coal and finished steel flows over the next two years.

The Metalnomist Commentary

China is shifting from a crude tonnage focus to a curated steel ecosystem built around fewer, stronger, greener champions. For global metals markets, that means more policy-driven volatility in the short term, but a likely structural tilt toward higher-value steel exports and more disciplined capacity at home. Suppliers of iron ore, coking coal and low-carbon steel technologies should all watch how fast policy turns into enforcement on the ground.

Jindal Stainless Specialty Steel Capacity Expansion Supports India’s Import Substitution Drive

Jindal Stainless

Jindal Stainless specialty steel capacity expansion marks another step in India’s push for higher-value industrial capacity. The company signed an MoU with the steel ministry under the production-linked incentive scheme. The move supports new capabilities in specialty steel, stainless steel, and forged products. As a result, Jindal Stainless specialty steel capacity expansion aligns closely with India’s import substitution strategy.

This matters because India still depends on imports for several critical steel grades. Those grades are essential for railways, defense, aerospace, and other strategic sectors. The new agreement aims to reduce that dependence and deepen local manufacturing strength. Therefore, Jindal Stainless specialty steel capacity expansion has significance beyond one company’s growth plan.

The broader policy backdrop is also strong. Under the scheme, 55 companies have signed 85 MoUs with planned investments of Rs118.87bn. These projects aim to add 8.7mn t of specialty steel capacity by fiscal 2030-31. Consequently, India specialty steel capacity expansion is becoming a national industrial priority.

India Specialty Steel Capacity Expansion Is Moving Up the Value Chain

India specialty steel capacity expansion is no longer only about tonnage growth. The current policy focus is shifting toward higher-value alloys and more advanced steel products. That is important because global competitiveness now depends on material quality as much as scale. As a result, the scheme is encouraging deeper technological capability.

Jindal Stainless fits that trend well. The company said it will augment current capacity and develop new capabilities in specialized alloys and forged products. That suggests a stronger move into more demanding industrial applications. Therefore, Jindal Stainless specialty steel capacity expansion supports a more advanced manufacturing profile.

This direction also improves long-term supply chain resilience. Domestic production of critical grades can reduce exposure to overseas supply disruptions and pricing pressure. Meanwhile, it can give Indian manufacturers more control over delivery and quality. That makes specialty steel import substitution more strategic than simple cost savings.

Specialty Steel Import Substitution Could Strengthen India’s Global Position

Specialty steel import substitution can also help India integrate more deeply into global manufacturing chains. The government expects the PLI scheme to support import replacement and stronger participation in international value chains. That combination matters for companies that want to move beyond domestic demand alone. Consequently, India strategic manufacturing is gaining both defensive and offensive value.

Jindal Stainless is already scaling capacity as part of its growth strategy. Management linked that expansion directly to rising demand from key national sectors. That suggests the company sees long-term structural demand, not only policy-driven opportunity. Therefore, Jindal Stainless specialty steel capacity expansion may prove commercially durable as well as politically aligned.

The larger message is clear. India wants to build more domestic strength in materials that support transport, defense, and advanced industry. The latest MoU shows that stainless and specialty steel producers will be central to that effort. As a result, India specialty steel capacity expansion is becoming one of the more important industrial themes in the country’s metals sector.

The Metalnomist Commentary

This agreement matters because it combines industrial policy with real capacity ambition. India is no longer focused only on producing more steel. It is focused on producing the right steel for strategic sectors. If execution stays on track, Jindal Stainless could strengthen its role in the next phase of India’s manufacturing upgrade.

Jindal Steel Angul capacity expansion reshapes India’s steel landscape

Jindal Steel

India’s latest Jindal Steel Angul capacity expansion signals a new phase in the country’s flat steel growth. The Jindal Steel Angul capacity expansion lifts the site’s output and pushes India further into a high-capacity cycle. As a result, the Jindal Steel Angul capacity expansion also raises questions about future domestic oversupply and export pressure.

Jindal Steel Angul capacity expansion lifts output toward 12mn t/yr

Jindal Steel has commissioned a new 3mn t/yr basic oxygen furnace at its Angul plant in Odisha. The BOF takes the site’s steelmaking capacity from 6mn t/yr to 9mn t/yr, with a target of 12mn t/yr in the 2025-26 fiscal year. The Jindal Steel Angul capacity expansion is anchored by a new 5mn t/yr blast furnace, started last week. Together, these assets support a broad product mix, including hot-rolled coil, galvanised steel, plate and rebar. This positions Angul as one of India’s key integrated hubs for flat and long products.

Indian steel capacity race intensifies across multiple producers

However, Jindal is not expanding alone, as rival Indian steelmakers also push new capacity. JSW Steel is enlarging its Vijayanagar facility in Karnataka, while Tata Steel brought a 5mn t/yr blast furnace online at Kalinganagar in 2024. These projects, combined with the Jindal Steel Angul capacity expansion, are driving a rapid rise in India’s crude steel potential. Domestic demand remains strong in construction, infrastructure and manufacturing, yet capacity growth is outpacing exports. Therefore, market participants are increasingly focused on how new tonnes will be absorbed if external demand falters.

CBAM and weak exports raise risk of domestic stock build-up

Meanwhile, looming changes under the EU’s carbon border adjustment mechanism are already dampening Indian steel export flows. Buyers in Europe are reassessing supply chains and potential carbon cost pass-throughs, which could limit future Indian shipments. As exports dwindle, the Jindal Steel Angul capacity expansion and parallel projects at JSW and Tata could contribute to inventory accumulation in the domestic market. A stock build-up would pressure prices and margins for Indian mills, especially in commoditised hot-rolled and rebar segments. As a result, strategic responses may include more value-added products, new export destinations and accelerated downstream integration.

The Metalnomist Commentary

India’s aggressive build-out, anchored by the Jindal Steel Angul capacity expansion, underlines its ambition to become a global steel powerhouse. Yet policy shifts such as CBAM mean that capacity alone is no longer enough; carbon cost, product mix and market access will decide who wins. For global buyers, India’s rising volumes may offer pricing opportunities, but also higher exposure to trade and climate-policy risk.

Thyssenkrupp Steel Restructuring Deepens as Losses Hit First-Quarter Results

Thyssenkrupp

Thyssenkrupp steel restructuring has moved into a more expensive and more decisive phase. The German steelmaker reported a €334mn net loss in the first quarter of its 2025-26 financial year. Most of that damage came from €401mn in restructuring expenses tied to Steel Europe. As a result, Thyssenkrupp steel restructuring is now shaping both earnings and the company’s future direction.

The latest loss matters because it reflects more than weak market conditions. Thyssenkrupp linked the restructuring costs to its collective agreement with IG Metall reached in December 2025. That agreement followed a period of lower prices and weaker shipments. Therefore, Thyssenkrupp steel restructuring is now moving from planning into full financial impact.

Steel Europe’s operating backdrop remains difficult. Sales in the division fell 10pc year on year to €1.96bn in the October-December quarter. Shipments also slipped 4pc to 1.73mn t. Consequently, weak pricing and soft demand in key end-use sectors are still weighing on Thyssenkrupp Steel Europe.

Thyssenkrupp Steel Europe Faces Weak Demand but Stable Operating Priorities

Thyssenkrupp Steel Europe continues to face pressure from sluggish European steel demand. The company said softer conditions in its main customer industries hurt both pricing and revenue. That remains a central challenge for the business. As a result, Thyssenkrupp Steel Europe is still operating in a market that offers little margin relief.

There were, however, a few areas of stability. Deliveries to automotive customers and steel service centres improved during the quarter. Hot-rolled coil deliveries also rose to 562,000t from both the previous quarter and the same period a year earlier. Therefore, not every volume indicator moved lower inside Thyssenkrupp Steel Europe.

Lower raw material costs and efficiency measures helped offset part of the damage. But they were not enough to reverse the broader earnings pressure. That means cost control is helping, yet not solving the core problem. Meanwhile, European steel demand remains too weak to deliver a meaningful recovery on its own.

Duisburg Direct Reduction Plant and Potential Sale Show Two Paths at Once

The company is now pursuing two major strategic paths at the same time. Thyssenkrupp confirmed confidential negotiations with India’s Jindal Steel International over a possible sale of Thyssenkrupp Steel Europe. Due diligence is already under way. As a result, Thyssenkrupp steel restructuring is no longer only about cost cutting. It is also about ownership change.

At the same time, the group is continuing construction of its Duisburg direct reduction plant. That project is moving ahead despite regulatory uncertainty. The decision suggests Thyssenkrupp still sees green steel investment as part of its long-term industrial future. Therefore, the Duisburg direct reduction plant remains strategically important even as asset sales are considered.

The company also reiterated plans to sell its stake in HKM to Salzgitter from 1 June 2026. It also reminded the market that blast furnace no 9 at Duisburg was shut permanently last October. These moves show a business actively reshaping its production base. Consequently, Thyssenkrupp steel restructuring is now affecting assets, ownership, and technology all at once.

The Metalnomist Commentary

Thyssenkrupp’s quarter shows how hard it is to restructure steel in Europe while demand stays soft and decarbonisation costs keep rising. The most important signal is not the quarterly loss alone. It is that Thyssenkrupp is now redesigning its steel business through labour agreements, asset sales, and lower-carbon investment at the same time.

SMEL Specialty Stainless Steel Capacity Plan Targets Higher-Value Indian Steel Demand

Shyam Metalics and Energy

SMEL specialty stainless steel capacity is set to expand by 2029 as India’s Shyam Metalics and Energy prepares new investments aimed at raising the share of higher-margin, value-added steel products in its portfolio. The company plans to invest an additional Rs27bn across two projects, subject to board approval.

SMEL specialty stainless steel capacity growth will be supported by a major stainless steel downstream expansion and a new special bar quality and specialty wire rod mill. Both projects are scheduled for commissioning by 2029.

SMEL specialty stainless steel capacity expansion reflects a broader shift in India’s steel industry. Producers are moving beyond commodity long products and into higher-specification materials for automotive, rail, engineering, infrastructure and coastal applications.

The proposed investment also aligns with India’s strategy to reduce dependence on imported cold-rolled stainless products. Local downstream capacity can improve supply security for manufacturers that need consistent quality, shorter lead times and domestic sourcing options.

SBQ and Specialty Wire Rod Mill Moves SMEL Into Premium Long Steel

SMEL plans to invest Rs9bn in an SBQ and specialty wire rod project with 800,000 t/yr of capacity. This will mark the company’s entry into premium long steel production.

Special bar quality steel is used in demanding applications where strength, consistency, machinability and metallurgical control are important. Key end-use sectors include automotive components, engineering products, industrial machinery, infrastructure and precision manufacturing.

Specialty wire rod also gives SMEL access to higher-value markets than conventional long steel. These products can serve fasteners, springs, bearings, welding wire, automotive parts and other engineered applications.

The investment is strategically important because premium long steel requires stronger process control and customer qualification. Producers must meet tighter chemistry, cleanliness, dimensional and mechanical property requirements.

For SMEL, the project could improve margins by shifting part of its output toward more specialised products. It also reduces exposure to lower-margin commodity steel cycles, where pricing is more vulnerable to oversupply and weak construction demand.

Stainless Expansion Targets Import Substitution and Downstream Integration

The larger part of the investment, Rs18bn, will go toward stainless steel downstream expansion. The plan includes melt shop expansion, higher hot-strip mill capacity, cold-rolling expansion and a new reversible cold-rolling mill.

SMEL also plans to add hot-rolled, cold and bright annealing and pickling lines. These process additions are important because stainless steel value increases significantly as producers move from melt shop output into rolled, finished and surface-treated products.

Cold-rolled stainless steel is especially important for automotive, rail, appliances, process equipment, industrial fabrication and coastal infrastructure. These markets need better surface quality, tighter tolerances and stronger corrosion performance.

The project could help reduce India’s reliance on imported cold-rolled stainless products. This matters as domestic demand grows and buyers seek more reliable local supply.

The expansion also improves SMEL’s integration across the stainless value chain. By adding more downstream processing, the company can capture more value from each tonne produced and offer a wider product range to industrial customers.

The key execution challenge will be qualification. Automotive, rail and infrastructure customers often require stable quality, repeatable processing and technical approvals before shifting supply.

If SMEL delivers the expansion on schedule, it could become a more important domestic supplier in India’s value-added stainless and specialty steel market. The company’s success will depend on ramp-up discipline, product quality and customer conversion, not capacity alone.

The Metalnomist Commentary

SMEL’s investment plan shows that Indian steel growth is moving toward quality, not only volume. The real opportunity lies in import substitution and higher-specification products, where domestic producers can capture more value from India’s industrial expansion.

Japan Increases EV Subsidies to Promote Green Steel Usage

Japan EV

New Incentives to Drive Adoption of Environmentally Friendly Steel

Japan's Ministry of Economy, Trade and Industry (Meti) has announced an increase in electric vehicle (EV) subsidies starting April 1st, aiming to promote the use of green steel. The new measure will provide up to ¥50,000 ($321) in additional financial support, expanding the subsidy to a total of ¥900,000 per EV, depending on the model and size, if it is manufactured with green steel. The initiative is part of Japan's broader green transformation policy to reduce greenhouse gas (GHG) emissions.

Meti has secured a budget of ¥110 billion for the EV subsidy program. The main objective of this increase is not only to boost EV demand but also to support the domestic steel industry. Green steel, though more expensive to produce, has the same functionality as conventionally produced steel, which emits higher GHGs. Meti is addressing concerns among domestic steel producers, who fear the higher production costs of green steel may deter consumers.

Shifting Steel Production to Electric Arc Furnaces

Japan's steel industry is making efforts to reduce GHG emissions, especially through the transition to electric arc furnaces (EAFs). However, EAF plants require significant investment and face various technical challenges. Japan's largest basic oxygen furnace (BOF) producer, Nippon Steel, began commercial operations of an EAF in 2022, and JFE Steel plans to launch its own EAF by 2027. Additionally, Kobe Steel intends to replace one of its BOFs with an EAF facility by 2027.

Despite these advancements, the Japan Iron and Steel Federation (JISF) reported a 3.4% decline in EAF-produced crude steel in 2024, with EAF production accounting for 26.2% of the country’s total crude steel production.

Challenges in Boosting Green Steel Production and EV Sales

Although Meti's measures aim to increase green steel production, there are doubts about their effectiveness, given the sluggish performance of the domestic EV market. Sales of domestic passenger EVs in Japan plummeted by 33% in 2024, largely due to reduced demand for local EV brands. EVs accounted for only 1.5% of total passenger vehicle sales in Japan, down by 0.7 percentage points from the previous year. This decline raises questions about whether the increased subsidies will be enough to stimulate demand for both green steel and EVs.

EUROFER Revises 2024 EU Steel Consumption Forecast Downwards

The European Steel Association (EUROFER) has revised its 2024 steel consumption forecast for the European Union, citing an array of economic challenges. These include the protracted period of elevated interest rates, the ongoing conflict between Russia and Ukraine, resultant energy crises, inflation, labor shortages, and supply chain disruptions in the Red Sea region due to the Israel-Palestine conflict.

In its recent "2024-2025 Economic and Steel Market Outlook" report, EUROFER predicts a modest 1.4% year-over-year increase in nominal steel consumption within the EU, reaching 127 million tons in 2024. This is a notable downward adjustment from the previously anticipated 3.2% increase to 130 million tons.

The report also recalibrates the 2025 forecast, lowering the expected growth from 5.6% to 4.1%, thereby predicting a total consumption of 133 million tons, down from the prior forecast of 137 million tons.

The first quarter of 2024 witnessed a 3.1% decline in EU nominal steel consumption year-over-year, totaling 31.9 million tons. This early-year contraction is expected to dampen the forecasted recovery for the remainder of the year. Significant uncertainties persist in steel consumption due to supply chain disruptions linked to the ongoing geopolitical conflicts, unprecedented surges in energy prices, and escalating production costs. Despite a gradual anticipated improvement towards the year's end, actual steel consumption is projected to remain below pre-pandemic levels.

EUROFER has also adjusted growth projections for steel demand industries downward. The Steel Weighted Industrial Production (SWIP) index fell by 1.9% in the first quarter of 2024, a stark contrast to the previous quarter's 0.5% rise. The decline in production across the EU’s steel-using sectors is attributed to the sustained impact of the Russia-Ukraine war, pervasive manufacturing weaknesses, global geopolitical tensions, and the long-term repercussions of the energy crisis.

The SWIP index decline highlights a persistent downturn in the construction, machinery, appliance, and metal product sectors, partially mitigated by continued growth in the automotive sector. The construction sector, which constitutes 35% of EU steel consumption, has been in recession since the third quarter of 2022, declining for seven consecutive quarters (-2.3%) through the first quarter of this year. High interest rates, labor shortages, and escalating material prices are expected to perpetuate the construction sector's downturn throughout the year.

The report states, "The positive trend in steel demand industries, which commenced post-pandemic, began to decelerate from the second half of 2022 due to rising energy costs and labor shortages following the Russia-Ukraine conflict, continuing through the fourth quarter of last year. This year’s deteriorating economic and industrial outlook for the EU is driven by high inflation and resultant interest rate hikes by the European Central Bank (ECB), with particularly adverse effects from the prolonged construction sector recession, ongoing geopolitical tensions, and worsening manufacturing conditions due to high interest rates."

The report continues, "Amid persistent adverse factors, the growth rate for steel demand industries is expected to decline to -1.6% in 2024, down from the previous forecast of -1%, with a rebound to 2.3% anticipated in 2025."

Notwithstanding the lowered forecasts for steel consumption and demand industries, import volumes have risen. According to the report, EU steel imports, including semi-finished products, increased by 12% year-over-year in the first quarter, mirroring the previous quarter's 11.3% rise.

Axel Eggert, EUROFER's Secretary General, emphasized, "While the EU's steel demand industries face a protracted downturn due to various adverse factors, import market share has risen significantly. This jeopardizes both European steel production and the associated clean technology value chains, necessitating urgent action at the EU level. The European Commission must swiftly conclude a European Clean Industry Agreement focused on the steel sector."

HBIS Silico-Manganese Tender Prices Fall as China Steel Demand Weakens

Silico-Manganese

HBIS silico-manganese tender prices fell in April as weaker steel demand and higher spot alloy availability pressured China’s bulk alloy market. Hebei Iron and Steel cut its tender price for 65/17 grade silico-manganese to 6,300 yuan/t delivered and paid by acceptance bill.

The latest HBIS silico-manganese tender prices were down by 250 yuan/t from the previous tender. The state-owned steel producer increased April purchase volumes to 8,500t, up by 3,400t from its previous buying round.

HBIS silico-manganese tender prices are closely watched because they help set the tone for China’s manganese alloy market. The lower tender confirms that steel mills are using weak downstream demand and larger spot availability to push procurement costs lower.

The cut also reflects pressure from rising steel inventories. China Iron and Steel Association members held 18.63mn t of steel inventories as of 20 April, up 6.4% from early April and 12% from a year earlier.

Oversupply Weighs on Alloy Prices Despite Higher Tender Volumes

China’s domestic 65/17 silico-manganese alloy prices fell to 6,000-6,150 yuan/t ex-works on 23 April. This was down from 6,100-6,300 yuan/t on 9 April.

The price decline reflects continued oversupply in the market. Higher inventory pressure has limited the ability of alloy producers to defend prices, even when some steel demand shows signs of recovery.

HBIS’ higher purchase volumes gave the market some support, but not enough to reverse price direction. Buyers remain cautious because steel inventories are still elevated and construction demand has not yet fully recovered.

Some market participants are more optimistic about the steel outlook. Construction and infrastructure demand are expected to resume gradually, while domestic and seaborne steel demand improved in mid-April.

Chinese steel mills also lifted production slightly during that period. If steel output continues to rise, silico-manganese consumption could improve because the alloy is widely used in steel deoxidation and strengthening.

However, the recovery remains uneven. The higher HBIS buying volume suggests some restocking need, but the lower price shows that mills still hold negotiating power.

Ore Costs and Output Curbs Limit Downside Pressure

Many silico-manganese plants kept firm offers despite weaker spot prices. Higher manganese ore feedstock costs continue to support producer cost floors.

Output curbs at several large alloy producers in north China also helped limit deeper declines. Reduced production can help balance supply if demand recovers, but current inventory pressure remains the larger problem.

The market is therefore caught between two opposing forces. Weak steel demand and alloy oversupply are pushing prices lower, while ore costs and production curbs are preventing a sharper collapse.

This tension is typical of bulk alloy markets. Producers cannot easily cut prices below cost for long, but buyers can delay purchases when inventories are high and demand is uncertain.

For steelmakers, lower silico-manganese tender prices provide some cost relief. For alloy producers, the main challenge is preserving margins while feedstock prices remain firm.

The next market signal will come from whether steel demand improves enough to absorb alloy inventories. Without clearer consumption growth, manganese alloy prices may remain under pressure even if ore costs stay elevated.

The Metalnomist Commentary

HBIS’ tender cut shows that China’s silico-manganese market is still demand-led, despite higher ore costs. A real recovery will require stronger steel consumption and inventory drawdowns, not only higher tender volumes.

EPCG divests Thyssenkrupp Steel Europe stake as Jindal bid reshapes future

Thyssenkrupp

Thyssenkrupp Steel Europe stake negotiations have shifted sharply as EPCG exits and Jindal emerges as the preferred partner. The Thyssenkrupp Steel Europe stake will now likely anchor a new strategic direction focused on low-emission steel. As a result, the evolving ownership of the Thyssenkrupp Steel Europe stake will influence Europe’s decarbonisation trajectory and regional steel competition.

EPCG steps aside to clear path for Jindal Steel

EPCG agreed to divest its 20pc holding in Thyssenkrupp Steel Europe and withdraw from all joint-venture talks. The investment firm will return its Thyssenkrupp Steel Europe stake and receive full reimbursement of the purchase price. This move reflects Thyssenkrupp’s decision to concentrate negotiations on a single strategic bidder.

Previously, EPCG had planned to lift its stake from 20pc to 50pc and form a 50:50 joint venture. However, the situation changed once Indian producer Jindal Steel submitted an indicative bid for the business. Therefore, Thyssenkrupp is now prioritising a potential deal that couples ownership change with major green-steel investment.

Jindal promises decarbonised steel platform in Europe

Jindal Steel’s bid includes a commitment to complete the DRI project in Duisburg and add new EAF capacity. The group has signalled a financial commitment of more than €2bn to build this low-emission production base. Although the offer remains non-binding, Jindal says it aims to transform the company into Europe’s largest integrated low-emission steelmaker.

This pathway would align Thyssenkrupp Steel Europe with EU decarbonisation policy and future carbon cost pressures. At the same time, Thyssenkrupp is also exploring the sale of its 50pc stake in HKM, further reshaping its steel portfolio. Together, these moves point to a deep restructuring of German steel assets and ownership.

The Metalnomist Commentary

This pivot from EPCG to Jindal underlines how strategic buyers now link ownership with decarbonisation capital. For European steel, the key question is whether promised DRI and EAF investments materialise fast enough to preserve competitiveness. If executed, Jindal’s plan could turn Thyssenkrupp into a flagship low-emission hub, but integration and policy risks remain significant.

India Gas Supply Crunch Raises Steel Supply Risk as Mills Cut Output

India Steel

India gas supply crunch is beginning to disrupt the country’s steel sector, with secondary producers and gas-dependent mills facing rising operational pressure. The crisis has intensified because India sources 67% of its LNG imports from the Middle East, where the US-Israel war with Iran has created major supply disruption.

India gas supply crunch is hitting smaller induction furnace-based steelmakers first. Several producers are rationing available gas, reducing output, and struggling to meet customer requirements. The government has also prioritized domestic natural gas supply for households, which has further tightened availability for industrial users.

India gas supply crunch now threatens more than steelmaking alone. It is affecting cutting operations, maintenance work, downstream galvanizing, packaging materials, plastics, propane, ammonia, limestone logistics, and imported thermal coal costs. As a result, the steel value chain faces a broader cost and supply shock.

Gas-Based Steelmakers and Secondary Mills Face Uneven Pressure

Gas exposure varies sharply across India’s steel industry. Smaller induction furnace-based mills in Mandi Gobindgarh, Punjab, have already reduced production where they rely on piped natural gas. Some manufacturers in the region can meet only about half of customer requirements, while smaller mills in Gujarat are fulfilling about 70% of demand.

Secondary steel producers that use scrap and direct-reduced iron are under particular pressure. These mills often operate with thinner margins and less procurement flexibility than large integrated producers. Rising gas costs, limited availability, and weaker scrap economics can quickly force production cuts.

The pressure is not uniform across regions. Producers in Jalna, Maharashtra, said they had not yet cut production because of gas shortages. However, imported thermal coal prices have affected most secondary mills, and imported scrap has become less viable. This means even coal-based mills are not fully protected from the wider input-cost shock.

Gas-based DRI operations face one of the clearest risks. ArcelorMittal Nippon Steel India is viewed as vulnerable because about 65% of its 9mn t/yr steelmaking capacity uses the gas-based DRI-electric arc furnace route. Market participants expect a potential near-term supply reduction if gas disruption worsens.

Downstream Steel and HRC Prices Face New Volatility

The downstream steel sector is also exposed to the gas shortage. Galvanized steel producers rely heavily on propane, and some integrated mills have already reduced galvanized output marginally while conserving existing gas supplies. Smaller re-rollers are at greater risk of curtailing or stopping operations.

The disruption has also reached trade and service centers. Some plate suppliers are unable to fulfill pending orders because their cutting processes depend on gas. This shows how energy shortages can spread beyond melt shops and rolling mills into finishing, processing, and distribution.

Steel prices may remain firm if input costs stay elevated. Indian domestic hot-rolled coil prices have already risen sharply, with 2.5mm-4mm HRC assessed at Rs54,300/t ex-Mumbai on 6 March, up 17% from mid-December 2025. Higher gas, coal, propane, ammonia, and logistics costs could keep pressure on finished steel prices.

However, demand risk is also rising. Major steel-consuming industries may face the same gas constraints, which could reduce their production and lower steel procurement. This creates a difficult market balance: supply costs are rising, but demand traction remains uncertain as buyers wait for clearer conditions.

The Metalnomist Commentary

India’s steel sector is facing an energy-security stress test. The biggest risk is not only lower steel output, but a chain reaction across DRI, galvanizing, cutting, re-rolling, and downstream demand.

JSL Stainless Steel Sales Rise as Indian Demand Offsets Trade Pressure

JSL stainless steel

JSL stainless steel sales increased in the 2025-26 financial year as strong domestic demand supported broader adoption across infrastructure, mobility, defence and industrial sectors. Indian producer Jindal Stainless sold 2.5mn t of stainless steel during the year to 31 March, up 8% from 2.3mn t a year earlier.

JSL stainless steel sales were driven mainly by India’s internal market. Domestic sales accounted for 92% of annual volumes, showing that the company is prioritising local demand while global trade conditions remain uncertain.

JSL stainless steel sales dipped slightly in January-March to 641,743t from 649,857t in the previous quarter. The company attributed the decline partly to energy-related constraints linked to geopolitical uncertainty in the Middle East.

The result highlights India’s growing role as a stainless steel demand centre. Consumption is expanding beyond conventional industrial uses into electric vehicles, trailers, containers, real estate, defence, aerospace and infrastructure.

Domestic Demand Anchors Volume Growth

Indian stainless steel demand remained the main growth engine for JSL. Government-backed infrastructure programmes and rising preference for longer-life materials supported consumption across multiple end-use sectors.

Stainless steel is gaining ground where durability, corrosion resistance and lifecycle cost matter. This is particularly relevant for coastal infrastructure, transport equipment, public works, defence systems and industrial applications.

Electric vehicles and trailers are also becoming more important. These sectors use stainless steel for strength, corrosion resistance and long-term reliability in components exposed to demanding operating conditions.

JSL’s domestic focus gives it some insulation from weak or volatile export markets. A strong home market allows the company to keep capacity utilisation higher while managing margin pressure from global competition.

The company is also preparing for further growth. JSL plans to increase annual melt capacity to 4.2mn t during the current financial year ending 31 March 2027.

That expansion will strengthen its position in India’s stainless market. However, the company will need sustained domestic demand growth to absorb the additional capacity without weakening prices.

Imports and Energy Costs Shape Competitive Risk

JSL continues to face pressure from Chinese-origin and Vietnamese stainless steel imports. The company warned that substandard material is allegedly being rerouted through ASEAN countries, raising concerns about trade circumvention and domestic input quality.

This issue matters because import pressure can undermine local producers even when domestic demand is healthy. Low-priced or poor-quality imports can distort pricing, weaken margins and create risks for downstream users.

Trade defence therefore remains important for India’s stainless steel industry. Domestic producers need fair competition if they are expected to invest in higher-value capacity and support national manufacturing goals.

Energy costs are another risk. JSL said geopolitical uncertainty in the Middle East affected sourcing of propane, LPG and natural gas used in stainless steel manufacturing.

This shows how stainless steel production remains exposed to energy supply chains. Even when demand is strong, fuel availability and cost can affect output, margins and quarterly shipment performance.

Exports remained steady despite geopolitical conflicts and tariff uncertainty. JSL is building its presence in Japan, South Korea, Taiwan and Germany, supported by its value-added product portfolio.

This export strategy is important because value-added stainless products can help protect margins. Higher-specification products are less exposed to commodity price competition and more dependent on quality, qualification and customer relationships.

The Metalnomist Commentary

JSL’s performance shows that India’s stainless steel market is becoming a domestic demand story rather than an export-led one. The company’s next challenge is to defend quality and margins as imports, energy volatility and capacity expansion reshape competition.

Steel replaces aluminum in autos as Cleveland-Cliffs courts OEMs

Cleveland-Cliffs

Steel replaces aluminum in autos as Cleveland-Cliffs seizes a rare opening in the US market. The steelmaker has completed a trial that used an automaker’s aluminum stamping equipment to press exposed steel body parts, without any tooling change. As a result, Cleveland-Cliffs now supplies routine production to that OEM and is fielding fresh inquiries from other automakers.

Steel replaces aluminum in autos after Novelis Oswego fire

The Novelis Oswego hot-mill fire created the moment in which steel replaces aluminum in autos more visibly. The blaze disrupted US automotive-body sheet supply, particularly for Ford and other large OEMs that rely on Novelis’ aluminum sheet. Cleveland-Cliffs moved quickly to demonstrate that corrosion-resistant steel stampings can run on existing aluminum presses with “no defects”, avoiding the high cost and delay of retooling.

However, a full structural swing back to steel still faces weight and fuel-efficiency headwinds. Automakers shifted to aluminum a decade ago to meet tightening emissions and mileage rules. Any broad move where steel replaces aluminum in autos will depend on advanced high-strength steel grades matching lightweighting targets, not just short-term supply disruptions.

What the steel pivot means for metals supply chains

The trial underscores how supply shocks can reopen material choices across automotive platforms. If more OEMs validate exposed steel on aluminum stamping lines, some incremental body-in-white demand could migrate from aluminum sheet back to coated automotive steel. That would tighten US flat-rolled steel balances while easing some pressure on aluminum body sheet during Novelis’ recovery.

Yet the aluminum industry is already mobilising its response. Novelis plans to restart its Oswego hot-rolling mill in December, far earlier than initial expectations. Other aluminum rollers are also qualifying alternative lines and products to backfill lost automotive-body sheet volumes. In that environment, Cleveland-Cliffs’ initiative is less a permanent displacement and more a strategic wedge into future platform decisions.

Focus keyphrases: steel replaces aluminum in autos, automotive-body sheet, Cleveland-Cliffs steel, Novelis Oswego fire

The Metalnomist Commentary

This episode shows how operational disruptions can quickly spill into long-term material strategy debates. Steelmakers that can prove drop-in compatibility on existing aluminum tooling gain leverage in negotiations over future model cycles. For metals suppliers on both sides, the real contest will be decided not by one fire, but by who can best align cost, weight and security of supply over the next decade.

India Stainless Steel Fuel Crunch Forces Jindal Stainless to Reduce Operations

Jindal Stainless

India stainless steel fuel crunch is now directly cutting production at Jindal Stainless, the country’s largest stainless steel producer. The company has begun operating its plants at reduced capacity as Middle East tensions disrupt fuel availability and global shipping routes.

The pressure is centered on critical industrial fuels and gases used across stainless steelmaking. Propane, LPG, and natural gas supplies have tightened after disruptions around the Strait of Hormuz, creating a direct operational risk for Indian mills.

Jindal Stainless said limited fuel availability has affected several manufacturing processes and forced the company to rationalise operations. The India stainless steel fuel crunch is also raising the risk of shipment delays for customers.

Stainless Steel Mills Face Higher Fuel Exposure Than Carbon Steel Producers

Stainless steel producers face a different energy risk profile from conventional carbon steel plants. Blast furnace-based steelmakers can use internally generated gases from coke ovens and blast furnaces, while scrap-based stainless steel routes depend more heavily on external fuel supply.

This structural difference is now becoming a competitive and operational weakness. When LPG, propane, or piped natural gas supplies tighten, stainless steel mills have fewer internal alternatives to maintain stable production.

Jindal Stainless has around 3 million tonnes per year of production capacity and plans to expand to 4.2 million tonnes per year in April 2026-March 2027. However, the current fuel disruption shows that capacity growth depends not only on demand and investment, but also on reliable energy logistics.

Fuel Allocation Becomes a Strategic Issue for Indian Industry

India’s fuel allocation policy is adding another layer of pressure. The government has diverted part of natural gas supply away from industry to prioritise household consumption, leaving manufacturers exposed to tighter industrial supply.

Jindal Stainless said clear guidance on propane, LPG, and natural gas allocation will be essential for stainless steel producers. Stable fuel supply is now necessary for mills to plan production, manage customer commitments, and avoid deeper disruptions.

The broader Indian stainless steel sector is also feeling the strain. Small and mid-sized mills, particularly in regions such as Gujarat, are cutting output as LNG shortages deepen. Mills reliant on LPG or piped natural gas face the most severe constraints.

The India stainless steel fuel crunch could therefore become more than a temporary supply issue. If fuel availability does not stabilise, temporary shutdowns may follow across parts of the sector, tightening stainless supply and delaying deliveries to downstream manufacturers.

The Metalnomist Commentary

India’s stainless steel sector is showing how energy security can become an industrial competitiveness issue. Scrap-based steelmaking supports decarbonisation, but it still needs stable external fuel systems to remain reliable at scale.