Green steel development and changes in steel trade flows in Asia were among the major topics discussed during the Middle East Iron & Steel Conference (MEIS) held in Dubai last week. In particular, though at first sight Asian steel companies, which mainly use the BF/BOF route, will be among the most affected by CBAM in Europe, market sources believe that Asian exports will be more impacted by the EU’s safeguard measures.
“India has a stable level of exports, to the EU in particular… as prices in Asia are at least $20/mt less. But in general, most steel exports from Asia [to Europe specifically] will go down due to quotas more than due to CBAM because the base prices in Asia and in China are very low,” Priyanka Agrawal, head of the steel markets department of Wood Mackenzie, said during the panel discussion.
As reported in October, Europe will limit tariff-free import volumes to 18.3 million mt a year (a reduction of 47 percent compared to the 2024 steel quotas) and will double the level of out-of-quota duty to 50 percent from the first half of 2026. “I believe that in the new safeguard measures they will include Indonesia and this cheap and big flow [of HRC mainly] will decrease,” a European source told SteelOrbis on the sidelines of the conference. Moreover, the EU is aiming to strengthen the traceability of steel markets by introducing a “melt and pour” requirement to prevent circumvention. But major Asian suppliers are not prepared for this new measure.
Talking about decarbonization in Asia, panelists focused on China’s aim to reach carbon peak emissions by 2030, and to achieve carbon neutrality by 2060. The main actions among Chinese mills to fulfill these targets are focused on ultra-low emissions upgrading of existing capacities, confirmed Star Liu, assistant general manager at Jianlong Group, during the panel discussion, but the China is also interested in development of value-chains overseas, especially in the green steel segment. “We see demand for low-carbon steel coming from both local and export markets and with growing demand we have almost no supply,” she said. Jianlong Group was the world’s seventh largest steel producer in 2024 with 39.37 million mt of steel. It owns a number of factories in China and Malaysia-based Eastern Steel mill with a 2.7 million mt per year capacity.
The final but important point during the Asian panel discussion was the focus on DRI/HBI projects, even among Asian companies. With growing protectionist measures “Asian mills are going abroad to catch local markets. Like Hyundai invested in a greenfield project in the US [for production of 2.7 million mt of steel via the DRI-EAF route]. DRI is a key for decarbonization,” said Stefano Maggiolino, president and CEO of Tenova. He also added that in the first half of November the first DRI was produced in Japan by Nippon Steel.
In addition, a number of Chinese steel giants have been developing hydrogen-based projects. Ansteel produced its first DRI at a hydrogen-based pilot plant in September this year, while HBIS is going “to be a benchmark in emissions having 250 kg of CO2 per tonne, which will easily allow them to export to Europe,” Maggiolino said. Also, the future of hydrogen-based steel in China is represented by the Sinosteel E&T plant of Baosteel Zhanjiang Iron & Steel, capable of producing 1 million mt of DRI per year.
