February 2026 proved to be a pivotal month of challenge and adjustment for the global stainless steel market. Driven by the compounding pressures of the Carbon Border Adjustment Mechanism (CBAM), intensifying geopolitical trade friction, significantly tightened raw material quotas, and sudden supply chain disruptions, the market navigated a complex landscape. Alongside post-holiday cost-push pricing, these factors are fundamentally shifting the industry’s competitive dynamics. The focus is moving away from traditional price wars toward a multidimensional contest centered on carbon footprint management, trade compliance, and upstream resource control. Regulatory Tightening and the Reshaping of Trade Policy In the macro-policy arena, the trend toward protecting domestic steel industries and fortifying "green barriers" continued to heat up. Most notably, a dramatic shift in U.S. tariff policy has sent shockwaves through global resource flows. U.S. Tariff Policy: Legal Battles and Broad Levies On February 20, the U.S. Supreme Court ruled in Learning Resources, Inc. v. Trump that the President could not cite the International Emergency Economic Powers Act (IEEPA) to impose tariffs solely for revenue generation. However, this loss of legal footing did not halt the administration’s protectionist agenda. To fill the policy vacuum and address a $1.2 trillion trade deficit, the White House immediately invoked Section 122 of the Trade Act of 1974. It announced a comprehensive 10% surcharge on the vast majority of imports (including stainless steel and downstream electromechanical/appliance goods) starting February 24, quickly raising it to 15% the following day. This historic tariff barrier is expected to cause profound tremors in global steel trade flows and terminal export demand. Indonesia: Compliance Crackdown Indonesian authorities publicly named a major stainless steel smelter for failing to submit mandatory Investment Activity Reports (LKPM) for eight consecutive years. This move signals a stricter regulatory environment ahead for foreign-invested enterprises regarding compliance. Europe: Defensive Lines and Review Expectations On February 20, the European Commission issued a notice regarding the upcoming expiration (November 19, 2026) of anti-dumping measures on stainless steel cold-rolled flat products from India and Indonesia, clarifying the timeline for review. The market is already pricing in expectations for the post-expiration competitive landscape. Meanwhile, peripheral producers like Turkey have been warned to provide verified carbon emission data to avoid high CBAM default penalties. Conversely, the German Environment Minister’s proposal to prioritize domestic "green steel" procurement has faced criticism for being unrealistic, given the country's heavy reliance on imported iron ore. China: Import/Export Policy Effects On the export side, China expanded its export licensing system to cover all steel products (including stainless) effective January 1, 2026. This explains the "rush to export" seen in late 2025 and remains a key variable for export pacing and compliance costs in February. On the import side, China successfully renewed and continued enforcing anti-dumping measures on certain stainless steel billets and hot-rolled plates, maintaining constraints on specific supply origins. Price Trends: Global Cost Passthrough with Regional Divergence Market fundamentals were underpinned by soaring raw material costs and exchange rate volatility, triggering a distinct wave of price hikes across major global producers in February. Asia Implementation of Hikes: A leading South Korean steelmaker raised prices for the 300-series by KRW 200,000/ton, citing raw material costs and currency factors. Similarly, a major Japanese producer raised 300-series prices by approximately JPY 20,000/ton, driven by nickel prices. The Taiwan region was particularly aggressive, with mainstream mills announcing significant March price hikes of TWD 2,000/ton for 304 and 316L grades. Indonesian Export Pricing: Post-holiday, a leading Chinese-owned mill in Indonesia raised 304 export offers by $15/ton starting February 24, a move the market attributes to tighter nickel ore quotas. Furthermore, due to a tight international molybdenum market, Indonesian export quotes for the 316 series spiked by $100/ton in a single day, widening the spread against 304. China: Weak Reality vs. Strong Expectations: The Chinese domestic market is in a complex state of "production cuts, inventory accumulation, and cost support." While prices have bottom support—with 304/2B Coil stabilizing at roughly RMB 14,465/ton by Feb 27—the fundamentals show that Foshan and Wuxi substantially entered an inventory accumulation phase in mid-February. Post-holiday real demand remains to be verified. Europe: A European stainless steel giant implemented a comprehensive increase in alloy surcharges for 304 and 316L grades for European clients in February. Raw Materials: Quota Cuts Meet Sudden Disruptions Supply chain fragility was laid bare this month, with Indonesia at the epicenter. Quota Slash: The Indonesian government announced a drastic cut in the 2026 nickel ore mining quota to 260–270 million tons—a reduction of over 100 million tons year-on-year. This direct catalyst pushed LME nickel prices to a three-year high. Additionally, industry insiders worry that the newly signed U.S.-Indonesia Reciprocal Trade Agreement (ART) could impact the existing Chinese-dominated nickel ecosystem. Unexpected Incident: Further exacerbating risk, a landslide occurred at a new energy material facility within an Indonesian industrial park (related to tailings operations), leading to a suspension of work and an investigation. This added significant uncertainty to an already tight supply line. Diplomatic Response: To manage systemic supply chain risks, India and Indonesia convened a critical minerals conference in Jakarta, seeking deeper ties in the nickel and lithium sectors. Corporate Dynamics: Pressure, Expansion, and Upgrades Global giants showed significant regional divergence in their strategic responses to the complex environment. Europe – Under Pressure: Several European majors released annual reports in February, attributing subdued performance to weak European demand, price pressure, and maintenance at overseas facilities. While some noted the medium-term protective value of CBAM, they admitted short-term pressure from pre-emptive imports. Outlooks for 2026 remain cautiously optimistic, hinging heavily on the EU’s trade defense measures. Asia – Aggressive Expansion: In contrast, Asian firms are expanding. In India, a major producer signed an agreement under the PLI 1.2 scheme to drive product upgrades, while another special steel firm plans a INR 280 million expansion. Chinese firms are accelerating globalization, with a domestic fastener company investing RMB 167 million to build a production base in Vietnam. Domestic (China) Projects: Progress continues on the ground. A leading mill completed the R2 roughing section of its hot rolling upgrade; a Zhejiang-based materials firm completed the core steel structure for its high-end Ni-Cr project; and a South China special steel producer successfully trialed its Cold Rolling Phase II line. Technology & Applications: Validation in Critical Sectors Stainless steel’s value in new energy and infrastructure continues to be proven. Tech Breakthroughs: A leading Chinese enterprise achieved stable supply of self-developed SUS630 precipitation-hardening cold plates, breaking foreign monopolies and securing the domestic PCB supply chain. Hydrogen Energy: Research teams unveiled a new nitrogen-bearing austenitic stainless steel with superior corrosion and hydrogen embrittlement resistance compared to 316L. Terminal Applications: India’s rapid rail system in Meerut began operations using lightweight stainless steel bodies, while Philadelphia selected ultra-corrosion-resistant 316L for the U.S. Semiquincentennial (250th anniversary) time capsule. Market Outlook: Opportunities and Challenges in Transition Looking toward late Q1 2026 and beyond, the market is in a period of transition between old and new drivers. Demand Verification Required: While prices have shifted upward due to supply shocks (quotas, accidents) and mill price supports, the inventory build-up in China serves as a warning. The rally must be validated by genuine downstream demand in March. If absorption lags, the market risks a correction following a "volume-less price hike." Trade Protection & The "Green Premium": As EU reviews kick in and CBAM carries financial weight, global trade walls are rising. European mills will rely on these for profit repair. However, compliant Asian mills with green power resources and carbon traceability may offset risks and even command a "Green Premium" in global pricing. Supply Chain Regionalization: The combination of China’s export licensing, resource nationalism in mining countries, and the rapid 15% U.S. tariff implies an irreversible shift toward shorter, bloc-based supply chains. The winning strategy is shifting from simple product exports to localized production and coordinated supply chain globalization. Companies that have already established compliant footprints in high-potential or tariff-exempt regions (like Southeast Asia or Latin America) will dominate the next cycle.

【SMM Steel】Turkey's steel exporters, facing global oversupply and rising protectionism, will prioritize nearby markets like the Balkans, Eastern Europe, and the EU. This leverages faster delivery and lower logistics costs. Despite a slow start due to CBAM, European demand is expected to recover in March-April. The sector also aims to boost high-value products like stainless and coated steel to move beyond price competition with low-cost producers.

ArcelorMittal confirmed on February 16, 2026, a €1.3 billion ($1.5 billion) investment to build a new Electric Arc Furnace (EAF) at its Dunkirk site. The project, which was announced during a visit by French President Emmanuel Macron, will have a capacity of 2 million tonnes per year and is scheduled for start-up in 2029. This move is a central part of the company’s strategy to comply with the EU’s Carbon Border Adjustment Mechanism (CBAM), which enters its definitive phase this year.

Indonesia's aluminum smelting industry is undergoing a massive expansion, with electricity supply emerging as the single most critical factor determining its success. Aluminum production is extremely power-intensive, requiring a steady, high-volume baseload of electricity for the electrolysis process, typically 12-15 MWh per tonne of primary aluminum produced. Any interruptions can halt operations and cause significant losses, making reliable 24/7 power non-negotiable.

February 25, 2026— AMG Critical Materials Inc. announced adjusted EBITDA of $235 million for the year 2025, representing a 40% increase from $168 million in 2024, primarily driven by strong performance in its antimony and engineering businesses. The company concluded the year with a robust balance sheet, highlighted by total liquidity of $484 million as of December 31, 2025. The refinery in Bitterfeld has continued to ramp up its production, producing in specification battery-grade lithium hydroxide and progressing with customer qualification as planned.AMG has dispatched kilogram samples to all cathode active materials (CAM) manufacturers with a footprint in Europe at the end of 2025, initiating the first stage of qualification. Based on customer feedback, it is anticipateed that it will move on to the next stage of qualification involving the shipment of tons in the first half of 2026, and expect to reach full production capacity in the second half of 2026. AMG Lithium is starting engineering on a 5,000-ton lithium carbonate to lithium hydroxide conversion plant at its Bitterfeld site. This plant will be designed to accept recycled lithium carbonate, and convert it to technical-grade hydroxide for use in Bitterfeld’s main upgrading facility. The plant’s capital cost is expected to be $50 million, and as announced in December 2025, 20% of the costs of the plant will be supported by a funding grant from the German Federal Ministry for Economic Affairs and Energy. The fourth quarter 2025 adjusted EBITDA decreased 87% compared to the fourth quarter of 2024, primarily due to the lower lithium concentrate volumes in the current quarter and higher mining costs related to poor quality ore. Full year 2025 adjusted EBITDA decreased from $24 million to $12 million, driven primarily by the 16% decrease in annual average lithium prices in 2025 compared to 2024, as well as the lower lithium concentrate sales volumes in the current period. During the fourth quarter of 2025, a total of 28,326 dry metric tons (“dmt”) of lithium concentrates were sold, 84% more than the 15,409 dmt in the third quarter of 2025, but 15% less than the 33,492 dmt in the fourth quarter of 2024. During the quarter, poor quality ore caused recoveries to drop, reducing production volumes. During 2025, a total of 69,180 dmt of lithium concentrates were sold, 22% less than the 88,966 dmt in 2024, due primarily to the failure of one piece of equipment in the second quarter of 2025 associated with our expansion project. The average realized sales price was $689/dmt CIF China for the fourth quarter of 2025, and the average realized sales price for the year was $632/dmt CIF China. The average cost per ton for the current quarter was $489/dmt CIF China. The average cost per ton increased from $290/dmt in the fourth quarter of 2024 due to the lower volumes and higher cost of mining activities in the current quarter. The average cost per ton for full year 2025 was $488/dmt CIF China compared to $458/dmt CIF China for 2024.

According to the Stainless Steel Industry Association (PASSAD), Turkey's steel sector surpassed Germany in 2025 to become Europe's largest producer, but officials warned that the industry faces severe cost risks under the new CBAM regime (effective Jan 1, 2026) if companies rely on high default emission values (2.3 tons) instead of actual data (0.6-0.7 tons). To maintain competitiveness and meet net-zero goals by 2053, the sector requires $31.4 billion in investment, supported by the newly launched Turkey Industrial Decarbonization Investment Platform (TIDIP) and the upcoming Climate Law No. 7552.

The champagne corks in Brussels may have popped too soon. On January 14, 2026, the European Commission released a soaring press statement celebrating the official entry of the Carbon Border Adjustment Mechanism (CBAM) into its "Definitive Regime." In the official narrative, this was a triumph of digitalization: over 10,000 customs declarations verified in real-time, with the system running as smooth as silk. However, if we shift the lens from the desks of Brussels to the customs brokers in Hamburg, the steel traders in Rotterdam, and the customs officials currently drowning in paperwork across the continent, a starkly different picture emerges. What we are witnessing is a carefully whitewashed administrative "cardiac arrest." Forensic-level investigation into the first seven weeks of 2026 reveals that the landing of CBAM is far from the glitz claimed by officials. On the contrary, plagued by suspected low-level data errors, catastrophic approval backlogs, and teetering temporary patches, the mechanism is currently mired in a dual crisis of legality and operations. I. The Absurd "Default Values": When Taiwan’s Stainless Steel "Became" Indonesian Coal If one were to find a single representative footnote for this chaos, the "Default Value Controversy" would be the undisputed choice. For importers unable to obtain precise carbon emission data from upstream factories, the EU’s official "default values" are a lifeline. This was supposed to be a baseline derived from rigorous scientific calculation. Yet, in the 2,400-page document released on December 31, 2025, mere hours before the new rules took effect, industry experts witnessed a jaw-dropping scene. This is not merely a margin of error; it looks more like a metallurgical farce. Industry bodies have pointed out that when the Directorate-General for Taxation and Customs Union (DG TAXUD) established the carbon emission default values for stainless steel from the Taiwan region, the data tables contained suspected structural errors, bearing traces of a "copy-paste" job from Indonesian data structures. The consequence? In the physical world, processing a steel slab into a precision tube requires significant electricity, meaning the finished product should logically have higher emissions than the semi-finished one. Yet, in the table published by the EU, industry players have flagged phenomena where "Taiwanese semi-finished stainless steel allegedly emits more than the finished product," vehemently questioning its rationality. In metallurgy, this is impossible; in a bureaucratic Excel sheet, it became legal reference. More fatally, Taiwan’s stainless steel industry relies primarily on Electric Arc Furnaces (EAF) and scrap recycling, resulting in a relatively low carbon footprint. In contrast, the Indonesian stainless steel industry is highly dependent on Nickel Pig Iron (NPI) and coal-fired power, yielding extremely high emissions. This suspected "slip of the hand" by the EU is akin to forcefully assigning the calorie count of a rich braised pork belly to a light garden salad. This has directly resulted in European buyers of Taiwanese stainless steel facing artificially inflated financial costs. II. A 27% Pass Rate: The 15,000-Strong Army Blocked at the Gate If data controversies are "soft tissue damage," the backlog in administrative approval is a fatal "compound fracture." The core rule of the CBAM definitive stage is simple: without "authorized declarant" status, you cannot import. This means every company wishing to ship a screw or an aluminum sheet into Europe must first secure an "entry ticket." The reality is brutal. According to the Commission’s official press release, by January 7, over 12,000 operators across the EU had submitted applications, with just over 4,100 approved (a pass rate of roughly 34%). However, industry estimates suggest that by late February, applications swelled to approximately 15,000, causing the pass rate to slide to around 27%. Where did the massive remainder go? They are stuck in the overwhelmed approval systems of National Competent Authorities (NCAs). In Germany, due to the deluge of applications, logistics giant DSV issued a public notice stating it could not support clients with CBAM authorization and registration, bluntly forcing thousands of SMEs to crash into the complex reporting system like headless flies. In France, the labyrinthine digital authentication process has turned the application into a maze only a hacker could navigate. To prevent European ports from paralysis, the EU was forced to administer a "painkiller": Customs Code Y238. This is a temporary "hall pass" allowing companies that applied before March 31 but have not yet been approved to keep goods moving for now. But make no mistake, this merely lengthens the fuse on the bomb. III. The Strategy of Silence and the Risk of "Retroactive Reckoning" Faced with industry skepticism, Brussels seems to have chosen the oldest PR strategy: silence. Although industry giants like the Gerber Group issued detailed technical warnings as early as January 9, pointing out the absurdity of the Taiwan/Indonesia data, the industry notes that as of late February, no official "Corrigendum" has been issued to legally revise the default values. The updated Excel version released on February 13 merely added a disclaimer: "information only." This rigid attitude transfers all risk to the enterprises. For companies currently relying on the Y238 temporary arrangement, the real danger is not "whether goods are released," but "whether they will be retroactively penalized." Competent authorities have publicly warned that if an authorization application is ultimately rejected, member states can, under Article 26 (2)/(2a) of the CBAM Regulation, retroactively penalize goods imported during the waiting period. Such fines can, in certain cases, reach 3 to 5 times the standard penalty. In other words, this is not a procedural flaw; it is a compliance risk that could land directly on cash flows and balance sheets. Conclusion: Who Pays the Price for Hubris? CBAM was supposed to be the crown jewel of the EU’s climate ambition, a lighthouse for global green trade. But the opening scene of 2026 makes it look more like an unfinished Tower of Babel. From the "data ghosts" haunting the industry to the severely backlogged approval channels, this "hard landing" exposes a chasm between regulatory ambition and administrative capability. For European importers, every day now is an exercise in navigating through fog. They are forced to calculate not just carbon emissions, but the cost of policy uncertainty. And for the European Commission, if it cannot step out of this arrogant "silence" and clarify these glaring operational controversies, what CBAM loses will be more than just data accuracy; it will be the trust of its global trading partners.

【SMM Steel】Since CBAM entered its tax phase on Jan 1, 2026, goods are held at EU ports due to clearance issues. Importers must be registered CBAM declarants. Common problems: missing declarant status, wrong CBAM codes, no emission data. Non-compliant goods are blocked. CBAM is now a trade access condition. Firms must register, use correct codes, track the 50-ton annual exemption, and set up carbon reporting. While importers are legally responsible, exporters face shipment delays and lost trust. CBAM compliance is key for steel, aluminum, and fastener exports to the EU.

The Carbon Border Adjustment Mechanism (CBAM) marks a big shift in worldwide climate rules. It’s set to tackle carbon leakage and push for greener ways. CBAM works as a carbon border tax—slapping fees on imports based on their hidden carbon emissions. This setup makes sure foreign goods face the same carbon costs as stuff made inside the European Union (EU). It keeps firms from dodging tough eco-laws by moving shops elsewhere. Plus, it nudges folks toward cleaner production tricks.

In line with global efforts to combat climate change, the European Union has introduced a significant measure—the Carbon Border Adjustment Mechanism (CBAM), designed to regulate the import of carbon-intensive products, such as aluminium, by charging a tariff based on the emissions produced during their manufacturing.