[SMM Steel] EU HRC Market Under Pressure as Weak Sheet Margins Limit Mill Price Hikes

Kobe Steel reduced carbon emissions from its production processes by 23% in fiscal year 2025 compared with fiscal 2013, according to its ESG Data Book 2026, as it targets a 30% reduction by fiscal 2030 and carbon neutrality by 2050. Scope 1 and Scope 2 emissions totaled 14.9 million mt of CO2 in fiscal 2025, down from 15.4 million mt in fiscal 2024, with more than 90% originating from steelmaking. Production-based CO2 intensity remained stable at about 2.4 mt of CO2 per mt of production. The company has demonstrated an approximately 25% cut in blast furnace emissions by charging large volumes of hot briquetted iron (HBI) produced via the MIDREX process, and plans to combine HBI with biomass to meet its 2030 target, while scrap-melting furnaces and EAF capacity are under consideration for the longer term.

India has extended enhanced export-credit insurance support for shipments to West Asia until March 31, 2027, providing continued risk protection for exporters as the UAE remains one of the country's largest finished-steel export markets. The Directorate General of Foreign Trade extended the eligibility timeline under Component II of the Resilience & Logistics Intervention for Export Facilitation (RELIEF), citing continued geopolitical disruptions and their impact on maritime logistics across the Gulf and adjoining regions. The extension is relevant to India's steel trade with the region. Ministry of Steel data sourced from the Joint Plant Committee show that India exported 2.986 million tonnes of finished steel during April-August 2026, up 34.1% year on year. The UAE received 389,200 tonnes, accounting for 13.0% of India's total finished-steel exports and ranking as the country's second-largest export destination after Vietnam. The UAE's importance was even greater earlier in the financial year. It was India's largest finished-steel export destination during April-June, receiving 249,000 tonnes, or 15.6% of total exports. Cumulative shipments to the UAE increased to 339,600 tonnes during April-July before reaching 389,200 tonnes by the end of August. RELIEF covers consignments destined for or transshipped through specified West Asian markets including the UAE, Saudi Arabia, Kuwait, Qatar, Oman and Bahrain, among others. Under Component II, eligible exporters obtaining ECGC cover can receive risk coverage of up to 95%, while premiums are prevented from increasing beyond pre-disruption levels during the eligible period. The government said the intervention responds to extraordinary freight escalation, higher insurance premiums and war-related export risks caused by disruptions in the Gulf and wider West Asian maritime corridor. For the steel sector, the measure can help limit payment and insurance risks for eligible shipments to a region that has become an important outlet for Indian finished steel. However, the support should not be interpreted as applying to all Indian steel exports to West Asia. Component II specifically covers Full Container Load and Less than Container Load cargo, along with reefer containers, meaning its direct applicability is strongest for eligible containerised steel shipments rather than conventional bulk or breakbulk cargoes.

India’s Shyam Metalics and Energy has signed an agreement with the Maharashtra government to invest INR 500 billion (USD 5.19 billion) to build a 9 million tonnes per year greenfield steel complex in Chandrapur. The project is expected to create around 30,000 jobs and is planned to start operations in the current financial year, subject to approvals, clearances and incentives. The investment is part of the company’s expansion beyond eastern India with planned investments also in Odisha, West Bengal and Jharkhand.