With No Shortage in Supply, Why Are European Stainless Steel Prices Rising?

On December 30, 2025, news emerged that European stainless steel hot-rolled coil (SS HRC) prices have quietly risen despite no substantial shortage in supply—a seemingly contradictory phenomenon garnering widespread market attention. The answer lies not in insufficient capacity or surging demand, but in a cost storm driven by soaring nickel prices and the European Union's Carbon Border Adjustment Mechanism (CBAM).

Cost Pressure Replaces Supply-Demand Logic

In November, German stainless steel hot-rolled coil prices fell slightly by 0.8% compared to October, with subdued market activity and stable production operations at steel mills. At that time, scrap steel supply improved due to the peak dismantling season, and raw material surcharges were slightly reduced, keeping overall prices within a stable range.

Despite persistently high energy and carbon costs, steel mills effectively controlled production expansion and inventory accumulation. However, the situation changed rapidly in late December.

Driven by Indonesia's nickel ore export restrictions and the continuous depreciation of the U.S. dollar, global nickel prices surged significantly. On December 22, nickel futures prices on the London Metal Exchange (LME) rose sharply, directly increasing the cost of the core raw material for stainless steel smelting.

Even with weak end-user demand, steel mills had to pass on the cost pressure to selling prices, adopting a noticeably firmer pricing stance.

CBAM Implementation Reshapes Trade Landscape

Simultaneously, the imminent end of the transition period and the formal implementation of the EU's Carbon Border Adjustment Mechanism (CBAM) further increased compliance costs for imported products.

Data shows that export volumes of stainless steel hot-rolled coils from Asia to Europe have begun to decline. Although Asian supplies are more competitively priced, after factoring in carbon tariffs, their overall cost advantage diminishes rapidly and may even surpass that of locally produced European products.

European steel mills seized the opportunity to raise their quotations and extended delivery times broadly to the spring of 2026. While buyers were inclined to turn to lower-priced imports, they hesitated due to the additional reporting, accounting, and potential taxes brought by CBAM. The result is not a lack of supply but a reduction in "available and effective supply," leading to structural tightness in the local market.

2026: The Path for Price Increases Is Already Open

In summary, the current price trend for stainless steel hot-rolled coils has deviated from the traditional supply-demand framework and is now primarily driven by raw material costs (especially nickel) and policy-related costs (CBAM). Although global nickel supply still exceeds demand, geopolitical policies, exchange rate volatility, and seasonal logistics disruptions continue to amplify price uncertainties.

The market widely expects European stainless steel hot-rolled coil prices to enter an upward trend in the first quarter of 2026. Some steel mills have already signaled price increases for March, prompting buyers to develop strategies in advance.

The uniqueness of this price surge lies in the fact that—goods are in the warehouse, but orders are not cheap. It reveals a new reality: amid the global green transition and intensified competition for resources, the prices of foundational materials like steel are increasingly influenced by climate policies and critical metal markets.

For buyers, the future will involve not only comparing prices but also calculating the "carbon cost" and "nickel cost." Diversifying supply sources, dynamically monitoring costs, and gaining a deep understanding of CBAM rules will become key capabilities for navigating the stainless steel market in 2026.