The International Rebar Exporters and Producers Association (IREPAS) warned in its November short-range outlook, published on 2 November, that energy inflation is eroding the price support European steelmakers receive from import restrictions and the EU Carbon Border Adjustment Mechanism (CBAM). It estimated that increases in electricity and natural-gas prices since August had added more than €110/t to direct steelmaking and rolling costs.
IREPAS estimated that natural-gas prices had risen by approximately 150% over three months. Dutch TTF futures exceeded €100/MWh, compared with less than €40/MWh earlier in the period. The association’s cost figures are industry assessments, not independently audited cost changes for every European steel producer.
European production economics were deteriorating despite tighter market access for imports. Reduced import quotas and CBAM provided limited support to steel selling prices because mills remained under pressure to secure business amid weak demand. IREPAS identified energy inflation as the immediate driver and said there was no evidence that CBAM itself had caused the increase.
Costs and market pressures
Higher production costs could lead mills to seek price increases, accept lower margins or reduce output. IREPAS warned that European steel prices could rise further in the first quarter of 2027 if energy costs remain elevated or production is reduced. 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. Energy prices, transport routes, relevant EU safeguard quotas, anti-dumping duties and verified embedded emissions also affect their position in the market.
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. IREPAS said investment in lower-carbon steel production requires financial projections that account for energy-market volatility and the evolving carbon-border framework.
