In yesterday's [SMM Analysis] EU Steel Tariff Wall Doubles to 50%: Reconstructing the New Quota System & In-Depth Analysis of 1A HRC, SMM deeply analyzed the brutal allocation logic of the EU's new 18.35 million tonnes quota. When the "50% tariff wall" and the "melting and pouring" rules completely block traditional tax-free export paths, the global steel supply chain is undergoing a forced reshuffle. Today, we shift our perspective to the ripple effects and macro-level forecasts of this storm.

Australia's Centaurus Metals Ltd. confirmed its capability to produce direct reduction (DR) grade pellet feed at its Jambreiro Project in Minas Gerais, Brazil. A pilot plant successfully produced 0.5 tons of concentrate featuring an average 68.7% iron content, with low impurities including 1.45% silica, 0.48% alumina, and 0.02% phosphorus. The company is evaluating the production of a DR grade pellet with 68% iron and combined silica and alumina under 2%. The development positions Centaurus to supply premium feedstock for electric arc furnaces (EAF), offering steelmakers a critical avenue to lower their overall carbon footprint compared to traditional blast furnace feeds.

Nippon Steel has submitted plans to build an electric arc furnace (EAF) at its Košice steelworks in Slovakia. Construction is expected to start in 2027, with operations beginning by 2030. The plant's overall annual steelmaking capacity will remain at 4.5 million metric tons, but the new facility is projected to cut carbon monoxide emissions by 56%.

[SMM Steel] Austrian steelmaker voestalpine finalized expansion plans for its greentec steel program, targeting a complete transition to electrified steel production at its Donawitz plant by 2030. The company will debut a new electric arc furnace (EAF) powered by green electricity in 2027, operating alongside traditional blast furnaces until decommissioning one unit in 2029. An approved EUR 100 million expansion budget will upgrade power systems, add a secondary metallurgy line, and improve scrap logistics by 2030, pending final funding approvals. This second stage will lift annual CO2-reduced steel capacity from 850000 tonnes in 2027 to 1.5 million tonnes by 2030, cutting site emissions by over 90% from 2019 levels. The transformation will close existing blast furnaces and the sinter plant, indirectly securing more than 5000 regional jobs. Core equipment installations begin in fall 2026.

【SMM Steel】Nippon Steel is planning to invest in an electric arc furnace (EAF) at its steelworks in Košice, Slovakia, as part of its strategy to reduce carbon emissions and promote greener steel production. The project is expected to cut reliance on traditional coal-intensive steelmaking routes with high CO2 emissions. The investment aligns with the broader transition of the European steel industry toward lower-emission technologies. The EAF adoption is also expected to improve energy efficiency at the Košice plant and strengthen its competitiveness amid increasingly stringent environmental regulations.

Nippon Steel has submitted plans to Slovak authorities to build an electric arc furnace at its Košice steelworks, with annual capacity estimated at 1.5–2.1 million tonnes. The project would replace part of the site’s coal-based production with lower-emission technology, while total steelmaking capacity is expected to remain at 4.5 million tonnes per year. Construction may start in 2027, with operations targeted for 2030.

South Korea-based Hyundai Steel has signed a master research agreement with Louisiana State University (LSU) to support technology development and workforce training for its planned $5.8 billion electric arc furnace-based integrated steel mill at RiverPlex MegaPark in Ascension Parish, Louisiana. Built jointly with POSCO, the facility is scheduled for completion in 2029 and will primarily produce automotive steel sheets for Hyundai Motor Group's US plants. The collaboration will leverage LSU's advanced research infrastructure, including the Louisiana Light Source synchrotron facility, focusing on low-carbon energy solutions and next-generation materials. This strategic partnership indicates Hyundai's commitment to securing localized green steel supply chains and skilled labor in the US, positioning the company to meet tightening North American automotive decarbonization targets.

The benchmark price for premium heavy melting scrap (HMS 1&2 80:20) exported from the United States east coast to the primary Turkish import hub suffered a steep correction, dropping by $14 per metric ton week-on-week to settle at $388 per ton CFR. Trading desks confirmed that the rapid price deterioration reflects a complete freeze in forward replacement bookings by Turkish electric arc furnace (EAF) mills. Facing heavily compressed domestic and export rebar rolling margins, Mediterranean producers are actively lowering structural melting utilization rates and rejecting high-priced international raw metal inputs.

The global stainless steel market navigated a series of sharp sentiment. The opening weeks saw Indonesia's mill closures and price hikes push the cost narrative to its highest point of the year, before a combination of easing geopolitical tensions triggered the first price reduction since December 2025. The month's defining characteristic was similar to April's. What differentiated May was the sharply higher amplitude of both the policy signals and the emotional swings that accompanied them.

Brussels is considering extending free ETS certificate allocations beyond the originally planned 2036 phase-out, which would continue to benefit blast furnace producers while leaving early adopters of cleaner electric arc furnace technology largely uncompensated, creating perverse incentives. The proposal has exposed a deep dilemma within Germany's IG Metall union, which represents workers at both blast furnace and EAF facilities with diametrically opposed interests; Saarland's union chapter vocally opposes ETS dilution while the national Berlin organization has remained silent on the issue. Meanwhile, WV Stahl is demanding permanent electricity price relief to EUR 50/MWh, with critics noting this would ultimately be funded by German taxpayers. In base metals, Asian and European markets posted broad gains on Friday, with zinc leading at over 2%.