BRUSSELS, 3 November — Higher electricity and natural-gas prices since August have added more than €110/t to direct steelmaking and rolling costs, eroding the support European steelmakers receive from import restrictions and the EU Carbon Border Adjustment Mechanism (CBAM), the International Rebar Exporters and Producers Association (IREPAS) said in its November short-range outlook, published on 2 November.
IREPAS estimated that natural-gas prices rose by approximately 150% over three months. Dutch TTF futures exceeded €100/MWh, compared with less than €40/MWh earlier in the period. The association described its cost figures as industry assessments, not independently audited changes for every European steel producer.
The outlook identified energy inflation as the immediate driver of rising production costs and said there was no evidence that CBAM itself had caused the increase. European production economics were deteriorating despite tighter market access for imports. Reduced import quotas and CBAM offered limited support to selling prices as mills continued to seek business amid weak demand.
Costs and market pressures
Higher costs could prompt producers to seek price increases, accept lower margins or reduce output. IREPAS warned European steel prices could rise further in the first quarter of 2027 if energy costs remain elevated or production is cut. Import tariffs, quotas and emissions-related costs may prevent foreign suppliers from exploiting any resulting price difference.
For Serbian and other Southeast European steel exporters, competitiveness depends on more than factory production costs. The outlook pointed to energy prices, transport routes, relevant EU safeguard quotas, anti-dumping duties and verified embedded emissions as factors affecting their market position.
Electric-arc-furnace steelmakers are exposed to electricity-price movements, while integrated producers face different combinations of fuel, carbon and raw-material costs. IREPAS also identified scrap markets, logistics and delayed investment in European construction as pressures on the sector.
Low river-water levels have contributed to higher transport costs, although industry participants said the effect on physical supply chains remained manageable. Investment in lower-carbon steel production requires financial projections that account for energy-market volatility and the evolving carbon-border framework, the outlook said.