Europe’s raw-material markets are being shaped by a widening gap between subdued industrial demand and growing concerns over supply security. Construction, automotive manufacturing and conventional industry remain weak, while copper, aluminium, lithium, graphite, rare earths and specialised industrial minerals are attracting strategic premiums. Carbon pricing, trade protection, energy costs and Chinese export controls are increasingly influencing European commodity prices alongside consumption trends.
Steel Demand Remains Weak Despite Higher Prices
Steel provides one of the clearest examples of the disconnect. EU apparent steel consumption is forecast to increase by only 0.4% in 2026 to about 135 million tonnes, following several downward revisions. Construction and vehicle production remain cautious, inventories are tightly managed and European mills continue to operate at low capacity utilisation. Prices, however, have remained relatively firm. Northern European hot-rolled coil was trading at approximately €700 a tonne in May, while cold-rolled and coated products were around €830–850 a tonne. German delivered rebar was approximately €600 a tonne.
Regulatory measures are a major factor behind the pricing environment. The Carbon Border Adjustment Mechanism entered its definitive phase in January, while tighter steel safeguards have reduced import quotas. These measures could add €50–80 a tonne to some flat-steel prices during the second half of 2026. The changes strengthen the defensive position of ArcelorMittal, Thyssenkrupp, Tata Steel Europe, Salzgitter and voestalpine, although European producers continue to face higher energy, labour and carbon costs than competitors in Asia, the Middle East and North Africa.
Iron Ore Shifts Toward Higher-Grade Feed
Iron ore remains the weakest part of Europe’s ferrous market. Imports are well supplied by Australia and Brazil, while additional material is emerging from Guinea’s Simandou development. China’s property-market slowdown continues to weigh on the global benchmark.
At the same time, European steelmakers are progressively moving from blast furnaces to electric-arc furnaces. This transition is increasing the importance of high-grade pellets and direct-reduction feed while reducing longer-term demand for conventional sinter fines. Premium iron ore is consequently developing into a more distinct market rather than simply representing a higher-priced form of the same commodity.
Scrap is moving in the opposite direction. Its importance as a feedstock for lower-carbon steel and aluminium is increasing, prompting discussions over tighter EU restrictions on scrap exports. Such measures would support European recyclers and electric-arc furnace operators but could disadvantage scrap collectors if international export competition were reduced. Carbon intensity, traceability and residual-element quality are becoming increasingly important components of scrap pricing.
Base Metals Expose Supply Constraints
The same combination of weak consumption and restricted supply is visible across base metals. On 17 July, official LME cash prices stood at $13,373.50 a tonne for copper, $3,154 for aluminium, $3,549 for zinc, $16,725 for nickel, $1,821 for lead and $52,045 for tin. European consumption has not shown broad-based strength, but limited mine investment, supply disruptions and tighter trade controls have supported prices.
Copper faces the most pronounced structural constraints. Grid expansion, renewable power generation, electric vehicles, data centres and defence electronics are increasing requirements while declining mine grades constrain supply growth. The concentrate market is particularly difficult for processors. Annual treatment charges have fallen to approximately zero, with some spot terms turning negative. European smelters therefore face deteriorating economics despite elevated refined copper prices. Aurubis, Boliden and KGHM are gaining strategic importance as processors able to recover gold, silver, tellurium, selenium and other by-products.
Poland has reduced the tax burden on copper mining and introduced deductions linked to investment. The measures could provide KGHM with approximately PLN10 billion in relief over a decade, reflecting the growing role of domestic mining and smelting capacity within industrial policy.
Aluminium, Zinc and Nickel Follow Different Paths
European aluminium production is supported by CBAM and comparatively low-carbon hydropower-based supply, but high electricity costs have left the region reliant on imports. The planned acquisition of Aluminium Dunkerque by Aluminium Bahrain highlights the strategic value attached to European smelting capacity.
Import carbon charges are expected to increasingly differentiate between low-emission aluminium and material manufactured using coal-fired electricity. European fabricators may therefore encounter higher input costs even as domestic smelters receive greater protection.
Zinc has outperformed expectations in 2026. Instead of moving into the anticipated surplus, reduced smelter production outside China helped lift prices to $3,658 a tonne in early June. European galvanising demand remains modest, but restricted refined supply has outweighed weaker consumption.
Tin has advanced more rapidly, supported by limited mine supply and demand for solder used in electronics and power equipment. Lead has lagged because of substantial exchange inventories and plentiful recycled production. Nickel remains more complex. Indonesian production quotas temporarily pushed prices toward $20,000 a tonne, but persistent inventories and Indonesia’s dominant supply position subsequently drove prices back below $17,000. Europe’s limited stainless-steel recovery and the battery industry’s shift toward lithium-iron-phosphate chemistry constrain demand growth. Low-carbon Class 1 nickel from European and allied producers could nevertheless command a premium over higher-emission Indonesian material.
Precious Metals Remain Volatile
Gold and silver have entered a period of consolidation following major price gains. London’s gold fixing was approximately $4,015 an ounce on 20 July, below its early-2026 peak but still substantially above historical levels. Central-bank purchases, fiscal risks and geopolitical fragmentation remain supportive factors, while expectations for higher interest rates and a stronger dollar periodically generate sharp corrections.
Silver, trading recently in the upper $50s an ounce, has fallen considerably from January’s speculative surge above $100. European demand is divided between investment and industrial uses, including photovoltaics, electronics and electrical contacts.
Platinum-group metals also show contrasting market conditions. Platinum continues to benefit from supply deficits, while palladium faces substitution and the longer-term decline of internal-combustion vehicles. Europe’s established autocatalyst recycling sector provides capacity to recover platinum, palladium and rhodium from end-of-life vehicles.
Strategic Raw-Material Projects Expand Across Europe
The EU’s Critical Raw Materials Act is reshaping the development pipeline for critical and strategic minerals. The framework calls for the Union to meet 10% of its extraction needs, 40% of processing requirements and 25% of recycling requirements from domestic sources by 2030, while limiting dependence on any single external country to 65%.
The first project selection comprises 47 Strategic Projects within the EU and 13 in partner countries.
Lithium accounts for 22 projects, followed by nickel, graphite, cobalt and manganese. Project designation does not guarantee financing, however. Permitting targets have been shortened, but developments continue to face appeals, local opposition, funding shortfalls and commodity-price volatility. The European Court of Auditors has also pointed out that the 2030 targets are non-binding and that the initial project portfolio is unlikely to provide full self-sufficiency.
Germany’s Vulcan Energy illustrates the scale of capital required. Its Lionheart development is seeking approximately €2 billion to produce 24,000 tonnes of lithium hydroxide annually, sufficient for about 500,000 electric vehicles. Production is targeted for 2028, with much of the first decade’s output already contracted to Stellantis, Umicore and Glencore. In Finland, the approximately €500 million Keliber project, controlled by Sibanye-Stillwater, is designed to produce 15,000 tonnes a year of battery-grade lithium hydroxide through an integrated mine, concentrator and refinery.
Graphite and Rare Earth Development Advances
Sweden’s Talga is progressing its Vittangi graphite project, with a target of approximately 19,500 tonnes a year of coated anode material. In Norway, Rare Earths Norway has increased the Fen resource estimate to 15.9 million tonnes of total rare-earth oxides, including a significant neodymium-praseodymium component.
In Greenland, GreenRoc’s Amitsoq project has received a long-term exploitation permit and targets approximately 80,000 tonnes a year of graphite concentrate. Outside the EU, Serbia’s Jadar lithium-borate project remains a major test of Europe’s approach to strategic mineral development. The principal issues identified for the project concern permitting, public trust, water protection and the distribution of economic benefits rather than its geology.
Battery Materials Face Changing Chemistry and Supply Risks
European electric-vehicle sales increased strongly during the first five months of 2026, but battery investments remain under significant financial pressure. Lithium prices have recovered sharply from their 2025 lows, while cobalt has increased by approximately 130% following restrictions imposed by the Democratic Republic of Congo. Nickel remains exposed to Indonesian quota decisions.
At the same time, lithium-iron-phosphate batteries account for approximately half of the automotive and storage market, reducing the cobalt and nickel intensity of future battery demand.
Technology materials are presenting an even more immediate supply challenge. China’s controls on gallium, germanium, antimony, graphite, tungsten and heavy rare earths have generated large regional price differences. European prices for gallium, dysprosium and terbium have at times reached roughly five times Chinese domestic prices, while germanium has approached three times the Chinese level. Tungsten has experienced an even sharper price movement.
These materials are used in semiconductors, fibre optics, permanent magnets, aerospace alloys, night-vision equipment, satellites and precision weapons. Even shortages involving only a few tonnes can disrupt industries valued at billions of euros.
The EU’s proposed RESourceEU financing programme of more than €3 billion, together with joint purchasing and possible strategic stockpiles, reflects the changing conditions in these markets.
Uranium Supply Extends Beyond Mining
Nuclear minerals are also receiving increased attention. Uranium entered 2026 at approximately $82 a pound, while long-term contracting approached $100 a pound. Europe’s exposure extends beyond uranium mining to conversion, enrichment and fuel fabrication.
Kazakhstan, Canada and Namibia account for about three-quarters of global uranium mine supply, while conversion and enrichment are even more concentrated.
Urenco ended 2025 with an order book of approximately €21.3 billion. Orano is investing €1.7 billion to expand the Georges Besse II enrichment plant in France by about 30%, with support from a €400 million European Investment Bank loan.
The investment addresses the difficulty of replacing Russian enrichment services, which cannot be resolved simply by sourcing uranium from another producing country. Alternative fuel assemblies also require licensing for Russian-designed VVER reactors operating in Central and Eastern Europe.
Industrial Minerals Face Supply Disruptions
Industrial non-metals are also experiencing significant supply changes. Sulphur prices briefly climbed from approximately $150–180 a tonne to as much as $1,000 following supply interruptions in the Middle East. Sulphuric acid is required for phosphate fertilisers, copper processing, nickel leaching and several battery-material processing circuits, allowing the disruption to spread rapidly beyond agriculture.
Helium presents another supply vulnerability. Qatar, Russia and the United States dominate production, while European semiconductor, medical-imaging and aerospace users have few substitutes.
Fluorspar is supported by aluminium production, refrigerants, fluorochemicals, semiconductor processing and battery electrolytes. High-purity silica, quartz, kaolin and feldspar are being directed increasingly toward solar glass, electronics and advanced ceramics even as conventional construction demand remains weak.
Barite is benefiting from higher drilling activity, while graphite remains caught between global oversupply and Europe’s shortage of qualified battery-grade anode material.
Construction Minerals Reflect Carbon and Energy Costs
Construction minerals remain predominantly local markets. European cement consumption is constrained by weak construction activity, but prices are expected to increase by approximately 3–4% in 2026, driven by carbon, energy and transport costs. Imported clinker and cement from Turkey, Egypt and other neighbouring suppliers could face an additional €12–20 a tonne under CBAM, depending on verified emissions.
Low-clinker cement, calcined clay, natural pozzolans and secondary cementitious materials are becoming more important. The closure of blast furnaces is reducing the future availability of slag, while the coal phase-out is cutting fly-ash supply. Industrial materials previously treated as by-products are consequently becoming constrained inputs with measurable carbon value.
Europe’s position in mineral markets is therefore increasingly centred on low-carbon refining, recycling, traceability, specialised metallurgy and guaranteed offtake, rather than the lowest extraction cost. Weak industrial demand has not translated into universally cheap raw materials as supply security, carbon intensity and processing location increasingly form part of commodity pricing.
