Assofermet warns of ‘perfect storm’ for European supply chains

by David Fleschen

Assofermet, the Italian national association representing companies in the steel, metals, scrap and hardware trade, has issued a stark warning about the combined effects of upcoming EU policy changes, warning that they may destabilise Europe’s entire metals value chain.

The association expressed “strong concern” over three developments expected to take effect from 2026: the full implementation of the Carbon Border Adjustment Mechanism (CBAM), the expiry and replacement of current safeguard measures on steel imports, and the possible introduction of stricter rules of origin such as the “melted and cast” requirement for steel products.

According to Assofermet, these simultaneous regulatory changes risk triggering structural disruption across downstream segments of the European metals industry — including re-rollers, processors, service centres and traders.

Key risks identified include:

  • regulatory uncertainty and lack of cost visibility for importers,

  • financial exposure due to limited ability to plan imports safely for 2026,

  • weak domestic demand and eroding competitiveness of EU manufacturing,

  • growing competition from third-country producers not subject to equivalent regulation, and

  • a potential extension of safeguard duties to aluminium, which has so far remained exempt.

Together, these factors could result in a significant drop in steel and aluminium imports to the EU — with potentially “devastating” consequences for European manufacturing industries already under pressure from weak demand, geopolitical uncertainty, and US tariffs.

In a letter dated 29 July 2025, Assofermet formally appealed to the European Commission and the Italian government, calling for “concrete corrective measures” and a more balanced approach to decarbonisation policy. The association stressed that environmental goals must be aligned with economic sustainability and the continued viability of the EU’s industrial base.

Assofermet, affiliated with Confcommercio-Imprese per l’Italia, represents around 450 companies active in the trade, processing and recycling of steel, non-ferrous metals, scrap and hardware across Italy.

Source and Photo: Assofermet