This Morning in Metals: European Parliament passes Carbon Border Adjustment Mechanism

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Andrey Kuzmin/Adobe Stack

This morning in metals news: the European Parliament recently voted on a resolution for a Carbon Border Adjustment Mechanism; China’s steel output reached nearly 175 million tons in January and February; and the US CRC price has widened the spread with the China CRC price.

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European Parliam passes Carbon Border Adjustment Mechanism

Last week, the European Parliament passed a resolution for a Carbon Border Adjustment Mechanism.

“The European Parliament has sent a clear signal that a workable carbon border measure is of critical importance for the transition of industry towards climate neutrality,” said Axel Eggert, director general of the European Steel Association (EUROFER). “The measure must fill the gap of the carbon cost differential with global competitors and imports instead of replacing or reducing current levels of carbon leakage protection.”

Eggert added straight replacement of free carbon dioxide certificates for a border measure would be “bad policy.”

“Primary steelmaking makes up three-fifths of European production, and such producers would face carbon costs at least twenty times higher than global competitors exporting to the EU,” Eggert added. “This vote shows that the Parliament intends to defend manufacturing and jobs in Europe.”

China churns out 175M tons of crude steel in January, February

The Chinese steel sector produced 175 million tons of steel in January and February, according to National Bureau of Statistics data reported by Reuters.

Average daily output during the aforementioned period reached 2.97 million tons per day. The average came in higher than daily output in December 2020 and January-February 2020, Reuters reported.

US CRC widens gap with China CRC

The US CRC price has become increasingly expensive relative to the China CRC price.

US CRC closed Monday at $1,429 per short ton, or up 8.04% from a month ago.

Meanwhile, China CRC closed at $850 per short ton, for a spread of $579.

In mid-February, the spread stood at $523.

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