[SMM Iron Ore] 4 June - Major Port Inventory Data

German steelmakers are facing critical logistical challenges as prolonged disruptions in rail freight transport threaten the reliable supply of essential raw materials like iron ore and coal. The German Steel Federation (WV Stahl) reported that ongoing repair works and inadequately prepared detour routes managed by DB InfraGO are jeopardizing plant operations, already resulting in the first instances of production disruptions. Coupled with existing pressures from weak downstream demand, high energy costs, and decarbonization mandates, these logistical bottlenecks present a severe risk to near-term capacity utilization. If network operators fail to promptly stabilize supply routes to major industrial centers, German mills may be forced to further scale back liquid steel output, which could tighten regional flat steel availability and impact local supply balances.

In May 2026, global square billet markets exhibited a generally upward but fragmented trend, with average prices in most regional markets rising by $10–$20 per metric ton (mt). Black Sea FOB billet prices climbed by $13 to reach a 2025-high of $483/t, while Italy's Ex-Works prices increased by $18 to $621/t. Conversely, the Gulf region experienced a slight decline, with prices dropping from $518/t to $514/t. Furthermore, the National Bank of Ukraine forecasts that average billet prices will rise 4.9% year-on-year to $487.7/t FOB Ukraine in 2026. The mixed price movements highlight shifting trade flows; while solid domestic and Iranian demand allowed Russian suppliers to maintain firm pricing despite Turkish buyers seeking $505–$510/t CFR, the broader market lost momentum by late May due to weakening Chinese futures and inflation pressures in ASEAN countries.

The Canadian government has extended its critical metal tariff measures for one year, valid until June 27, 2027, to protect domestic producers from global excess capacity. Under the extended policy, non-CUSMA (Canada-United States-Mexico Agreement) steel imports exceeding set quotas will face a steep 50% tariff. The tariff-rate quota limits remain strictly capped at 20% of 2024 import volumes for non-free trade agreement (FTA) partners and 75% for FTA partners, while the US and Mexico maintain their exemptions. By locking in these stringent quota limits, Canada aims to prevent trade diversion and provide long-term predictability for local steel operations. However, this extension could constrain supply availability for Canadian downstream manufacturers reliant on offshore steel, potentially driving up domestic premium prices in the medium term.