GREEN STEEL: SUBSTANCE OR SIGNAL?
19 Ferbuary 2026 By: Shahab Mossavat The steel industry accounts for roughly 7% of global greenhouse gas emissions. If we are serious about decarbonisation, it has to change. But is the emerging green steel market a genuine structural shift, or an expensive exercise in corporate optics? The numbers, right now, suggest something uncomfortably in between. 7% of Global Carbon Emission are Produced by Steel Makers Europe has what passes for an established green steel market — and it is struggling. Traded volumes for flat-rolled green steel remained below 200,000 tonnes throughout 2025, which is vanishingly small against a European market that consumes some 140 million tonnes annually. Fastmarkets’ green steel premium (for product below 0.8 tonnes of CO₂ per tonne of steel) has declined since the start of the year, and sources in the market describe buying as almost entirely project-based — nobody, as one Northern European buyer put it, buys green steel “back-to-back.” The spot market has been virtually non-existent since the start of 2026. That is not a market. That is a pilot programme with a premium attached. Part of the problem is definitional chaos. There is no common standard for what “green steel” even means, and buyers in some regions reportedly have no clear idea what they need. When the foundational vocabulary is contested, credibility suffers — and with it, the willingness to pay. The reduced-carbon tier (1.4–1.8 tCO₂ per tonne) saw its premium fall 50% in just three months to a meagre €25 per tonne, suggesting that when the environmental story becomes incremental rather than transformational, buyers simply revert to price. And yet dismissing green steel entirely would be equally wrong. The structural forces pushing towards it are real and are gathering pace. The EU’s Emissions Trading System is progressively withdrawing free allowances from blast furnace producers, and the Carbon Border Adjustment Mechanism, now entering its definitive phase, will impose equivalent carbon costs on imported steel. Analysis by CRU suggests that by 2032, the CBAM charge will have risen sufficiently to theoretically return profit-maximising output for EU mills to pre-ETS levels — meaning the economics of green production will tighten around conventional steelmaking from both ends. ArcelorMittal’s confirmation of a €1.3 billion electric arc furnace in Dunkirk, citing EU policy confidence, is a signal worth noting even if the investment was scaled back from its original ambition. EU is Withdrawing Incentive Schemes The forecasts point towards rising hot-rolled coil prices across all production routes to 2035, with the green premium narrowing but persisting — from roughly 23% today to around 8% by 2035 as EAF capacity expands and legacy blast furnace costs compound under regulation. The trading angle For those of us who remember steel as a traded commodity, there is a further wrinkle. Physical steel trading has largely disintermediated over the past decade; end-users go direct to mills, and the role of the merchant has contracted sharply. Green steel, paradoxically, may be reopening a gap. Because green steel is niche, project-specific, and negotiated on terms that vary considerably between transactions, the information asymmetries that once justified intermediaries are back. Mills producing green product need buyers who understand what they are actually purchasing. Buyers with Scope 3 obligations need supply that is verifiable and documented. That is not a spot market. That is a relationship market — and relationship markets have historically rewarded those who understand both sides of the transaction. Green Steel Sheets and Cold Rolls Whether that translates into a commercial opportunity depends on how quickly mandated demand — through green public procurement under the EU’s forthcoming Industrial Accelerator Act — moves from political intention to contracted reality. One mill source was blunt: large-scale demand for green steel can only be stimulated through public projects. Without that, it remains a niche. The honest verdict is this: green steel is not yet efficient as an environmental instrument, because its scale is too small to move the emissions needle. But the regulatory architecture being constructed around it is serious, and the cost convergence is real and mathematically predictable. The performative phase — buying a few thousand tonnes to put in the sustainability report — is giving way, slowly, to something more structural. The question for commodity-focused businesses is not whether green steel matters. It is whether they are positioned to participate when it does. Gapuma Group monitors developments across physical commodity markets. We welcome discussion from producers, buyers, and investors navigating the energy transition.
Global Growth Steady at 3% – So Why Is Britain Lagging Behind?
12 February 2026 The global economy is maintaining a resilient 3% growth trajectory in 2026, according to the ACCA Global Economic Outlook. Yet Britain’s economy tells a starkly different story. The EY ITEM Club’s Winter Forecast projects UK GDP growth of just 0.9% this year – one of the weakest performances in the G7. More concerning for those of us in physical commodities: business investment is forecast to contract by 0.2% in 2026, a sharp downgrade from November’s 0.8% growth prediction. The contrast is striking. Whilst the US leads G7 growth and emerging markets demonstrate surprising resilience despite unprecedented tariff disruptions, Britain splutters. GDP per capita grew by merely 1% in 2025 after zero growth in 2024 – hardly the transformation promised eighteen months ago. What’s holding the UK back? Persistent policy uncertainty, weak business confidence, and a construction sector in the doldrums despite ambitious housing targets. For commodity traders, the implications are clear: whilst global trade adapts to new realities and maintains momentum, UK domestic demand remains anaemic. The government’s fiscal tightening, frozen income tax thresholds, and employer National Insurance increases are weighing heavily on growth. Meanwhile, our global competitors press ahead. As EY notes, the Bank of England may deliver one final rate cut in April, but monetary policy alone cannot overcome these structural headwinds. For Gapuma Group and the wider commodities sector, the message is unambiguous: opportunity lies in global markets showing genuine dynamism, not in a UK economy stuck in low gear. The world economy is proving adaptable and resilient. Britain needs to match that energy – urgently.
TRUMP’S GREENLAND GAMBIT: RARE EARTHS OR GEOPOLITICAL THEATRE?
21 January 2026 President Trump’s year-long campaign to acquire Greenland has crystallised around a stark claim: America needs control to secure critical minerals vital for military and economic security. From a commodities trading perspective, this narrative demands scrutiny. The mineral case appears compelling at first glance. Greenland holds two of the world’s largest rare earth deposits, including heavy rare earths like dysprosium and terbium that are essential for missile guidance systems and jet engines. China controls up to 90% of rare earth processing capacity, making supply chain diversification strategically sound. Yet the economic reality is sobering. Greenland is relatively open to investment – the US could mine there now. Only one American entity has even applied for mining permits. The challenge isn’t access; it’s mining in an incredibly harsh environment. Mining sites are remote, largely unsettled, and face local opposition. More tellingly, established supply chains already exist in the US, Canada, Australia and Brazil – markets may simply not need Greenland’s minerals. Meanwhile, 85% of Greenlanders oppose becoming American, with party leaders across the political spectrum united in rejecting US advances. The real story? Trump’s “method” reveals a strategic intent to re-establish American dominance over the western hemisphere, dividing the world into three spheres of influence. China views this as proof the US-led order is in turmoil – creating opportunities Beijing welcomes. For ESG-conscious traders, Greenland exposes the tension between resource nationalism rhetoric and commercial reality. When acquisition costs exceed value creation, and geopolitical theatre overshadows economic fundamentals, markets should take note.
Is China Winning Because of Tariffs, Not Despite Them?
14th January 2026 China’s record $1.19 trillion trade surplus for 2025 poses an intriguing question: are tariffs inadvertently strengthening Beijing’s global position? Whilst Trump’s levies successfully reduced US-China trade, they’ve seemingly accelerated an unintended consequence: China’s pivot towards emerging markets. As weaker economies struggle with rising input costs and disrupted supply chains, China has expanded aggressively into Southeast Asia, Africa, and Latin America—regions where competitors lack its manufacturing scale and infrastructure depth. According to the Financial Times, China’s export machine has proved “remarkably resilient,” with green technology and AI products driving growth in new markets. The Economist notes that whilst other exporters face margin pressure from tariffs, China’s vast domestic production capacity allows it to absorb costs and undercut rivals who cannot. This creates a troubling dynamic: tariffs intended to level the playing field may actually consolidate China’s dominance. Smaller economies face a double burden—higher costs from tariffs whilst simultaneously losing market share to Chinese alternatives in third countries. Bloomberg data shows Chinese goods penetrating markets previously served by Southeast Asian manufacturers, as buyers seek the lowest prices amidst global inflation. The paradox is striking. Punitive measures meant to constrain China may be eliminating its mid-tier competition instead. With a weak yuan, overcapacity from its property crisis, and unmatched scale, China can weather storms that sink smaller vessels. The question for businesses isn’t whether to prepare for a China-dominated supply landscape—it’s whether current trade policies are accelerating rather than preventing it. Perhaps scale, not sanctions, determines who survives the tariff era.
TRUMP’S IRAN TARIFF GAMBIT: A CALCULATED RISK THAT COULD RESHAPE GLOBAL TRADE
13 January 2026 Amid the chaos continuing to envelop and ravage Iran, where a large-scale protests sparked by currency collapse have been met by a brutal crackdown by authorities—with large-scale deaths and mass arrests reported—President Trump has announced immediate 25% tariffs on nations conducting business with Iran. The move introduces a new element of uncertainty into global commerce, with potentially significant ramifications for the hard-won US-China trade détente. The tariffs target major economies including China, India, Turkey, the UAE and Brazil—all substantial Iranian trading partners. China faces particular exposure, having imported approximately 90% of Iran’s oil exports through independent refineries whilst maintaining over $9 billion in documented trade. The new levy could push cumulative US tariffs on Chinese goods from the current 30.8% to approximately 56%, threatening the fragile truce established at last October’s South Korea summit that granted Washington access to critical rare earth minerals. The policy’s ambiguity—Trump provided no details on what constitutes “doing business” or how enforcement will proceed—creates immediate complications for global supply chains. India’s $1.34 billion bilateral trade with Iran, Turkey’s $5.68 billion commerce across their shared border, and Brazil’s $3 billion agricultural exports all fall within potential scope. The UAE’s role as a re-export hub for Iranian goods adds further complexity to implementation. For China specifically, the stakes extend beyond trade metrics. Beijing secured rare earth export agreements and a presidential visit to China scheduled for April as part of the détente. Trump administration adviser Peter Navarro previously cautioned against escalating Chinese tariffs further, warning “we don’t want to get to a point where we hurt ourselves.” Whether carve-outs emerge remains unclear, though the White House has yet to publish legal authority or implementation details for the Iran-related levies. As businesses navigate this evolving landscape, the incident underscores how rapidly geopolitical developments can reshape commercial calculations, requiring organisations to maintain strategic flexibility in an increasingly volatile trading environment.
Wellbeing or Work Perk? Rethinking Connection Through an ESG Lens
7th January 2026 At a time when workforce wellbeing is increasingly in the spotlight, a novel trial in Sweden has captured global attention: a major employer is experimenting with a paid “friendship hour” — a dedicated slice of the working week for staff to nurture social relationships beyond the office. Participants are given time during paid hours, plus modest financial support, to connect with friends or strengthen personal networks. Early self-reported outcomes suggest small boosts to happiness and life satisfaction. It’s a provocative idea, and one that resonates with a deeper reality: loneliness, social isolation and low workplace engagement are by no means confined to Nordic climes. Recent polling and workplace research in the UK has pointed to troubling trends in worker wellbeing and connection, with many citing stress, disengagement and a lack of meaningful interaction as part of their professional experience. As an organisation, Gapuma Group welcomes innovation in how employers think about people — especially where it aligns with our ESG commitments to mental wellbeing, inclusion and a supportive workplace culture. We champion initiatives that encourage genuine connection and mutual support, from informal coworker gatherings to structured wellbeing programmes, because strong human relationships are at the core of healthy teams. Yet it’s worth asking whether formalising friendship through corporate policy is a necessity or a symptom of broader social shifts? The pandemic, remote and hybrid working, and the blurring of work–life boundaries have reshaped how and where people interact. Does this make traditional office attendance more important, or simply impractical in an era that values flexibility? Should employers nudge people towards social connection, or trust teams to find their own balance? There are no simple answers — but one principle remains clear: belonging at work matters. At Gapuma, we will continue to explore and share practices that build authentic community, wherever our people choose to work.
Venezuela: Energy Market Stabilisation or Rules-Based Order in Crisis?
6th January 2026 The capture of Nicolas Maduro has sent shockwaves through global energy markets, though perhaps not in the way one might expect. Oil prices fell slightly in Asian trade on Tuesday, with market volatility appearing to subside following the initial shock. But beneath this surface calm lies a more complex picture for energy security and international norms. Venezuela holds the world’s largest proven oil reserves (about 303 billion barrels, or 17% of global reserves), yet sanctions and chronic underinvestment have slashed production to just 1.0-1.1 million barrels per day. The potential for U.S. oil companies to rehabilitate this capacity has sparked debate about whether this intervention serves energy market stability or something else entirely. Heavy, sour crude like the oil from Venezuela is crucial for certain products made in the refining process, including diesel, asphalt and fuels for factories and other heavy equipment. Many Gulf Coast refineries were specifically designed for Venezuelan crude, making this geographically proximate supply particularly valuable to U.S. industry. The argument for intervention, then, centres on energy security and market efficiency. Yet market reactions suggest caution. While a stable, US-aligned government in Caracas could lower the risk premium for Venezuela and its neighbours, improving capital flows, military intervention could provoke a regional backlash. Analysts broadly agree that whilst a peaceful transition might eventually increase supply and lower prices, achieving that goal will require years of work and billions of dollars of investment. Short-term instability may actually tighten supplies before any long-term benefits materialise. Here’s the uncomfortable question: can the capture and prosecution of Maduro achieve energy market stability when the precedent it sets undermines the very framework that global markets depend upon? If unilateral military action to seize resource-rich nations becomes normalised, what does that mean for contract law, sovereign immunity, and the predictability that investors require? Is this pragmatic energy policy, or are we witnessing the unravelling of the international rules-based order—one barrel of oil at a time?
Quiet Tides: The Financial Forces Steering Today’s Emerging Commodity Traders
By: Jack Bardajian 1st December 2025 The world of physical commodity trading feels tactile and concrete — grain stacked in silos, oil pumped into tankers, copper piled in yards — but the fate of emerging, unlisted trading houses such as Gapuma Group is written as much in the price of credit and the mood of public markets as in harvests and shipping schedules. Medium-sized traders sit at an awkward intersection: big enough to need vast working capital, small enough that their access to capital markets is conditional and often second-best. For them, movements in bond and gilt markets, and the broader temper of equities, are far more than distant background noise; they are the lever that raises or lowers the cost of doing business. Debt is the bloodstream Unlike large, listed peers with easy recourse to equity issuance, private and medium-sized traders typically rely on a mix of bank lines, commercial paper, trade finance and securitisations. That structure makes them acutely sensitive to swings in interest rates and credit spreads. When rates rise and gilts and sovereign bond yields drift higher, the immediate effect is a heavier financing bill on inventories — the so-called cost of carry — and tighter covenant headroom on working capital facilities. That squeezes margins in an industry where single-percentage points can decide profitability. The largest houses can partly offset those pressures through diversified funding programmes and scale-economies in repo or commercial-paper markets. Louis Dreyfus, for example, highlights the importance of diversified short-term funding and committed facilities in its financial statements — a cushion that medium-sized firms often lack when markets tighten. Turning inventory into risk Higher rates change behaviour. Where once it made commercial sense to carry larger inventories — capturing seasonal arbitrage or timing sales to market windows — an elevated cost of money forces more rapid turnover. That reduces optionality for merchants like Gapuma: less inventory means fewer opportunities to capture basis moves or to provide the market-making liquidity that buyers and sellers depend on. Those constraints are not hypothetical. Industry executives have repeatedly signalled a retrenchment in capacity and capital intensity as the economic backdrop shifts. “From a capital allocation perspective, we continue to focus on aligning our capital to productivity efforts or cost reductions efforts or internal innovation.” That emphasis on capital discipline among the big houses echoes down the supply chain and changes competitive dynamics for smaller players. A two-tiered funding world Bank and institutional appetite for trade credit has become more discriminating. Analyses from major banks and rating agencies show lenders reallocating scarce liquidity toward the largest, most credit-worthy counterparties in stressed markets. The result is a bifurcated landscape in which scale and credit standing command cheaper funding; medium-sized houses face higher spreads, shorter tenors, or the need to use more complex, asset-backed structures to fund their operations. For an ambitious firm such as Gapuma, that means financing strategy becomes a strategic capability: strong relationships with regional banks, creative use of receivables financing, and disciplined working-capital management are competitive imperatives. Cargill’s internal communications from recent years underline this push to optimise capital and reduce costs — a reminder that even the giants are recalibrating their capital footprints. That recalibration tightens the window for midsized firms to compete on margin or to carry large seasonal positions. Financial markets as a macro barometer Stock markets do more than set valuations for listed firms. They provide a real-time barometer of investor sentiment, growth expectations and risk appetite. A buoyant equity market often presages strong industrial demand — a boon for commodity volumes — whereas sustained market weakness can presage slower manufacturing and reduced commodity flows. The “financialisation” of commodities — the growth of ETFs, index allocations and institutional positioning — has further linked commodity prices to the ebb and flow of capital. This linkage amplifies volatility and can create price moves that are driven more by portfolio flows than by immediate physical fundamentals. Bunge’s leadership has also warned that policy uncertainty and trade dynamics dampen the willingness of counterparties to commit beyond the near term: “Policy decisions, including biofuels and trade, remain in flux as we look ahead to 2026.” For Gapuma, that translates into a commercial landscape in which hedging, counterparty risk assessment and flexible contracting are non-negotiable. The operational response: risk, capital and governance So what practical measures should Gapuma and its peers take? First, capital efficiency must be baked into commercial strategy. That means sophisticated cash-management, faster receivables cycles, and disciplined, data-driven inventory models that balance opportunity with financing cost. Second, diversified funding is essential: establishing committed facilities, bilateral lines with regional banks, and, where feasible, access to short-term commercial-paper programmes or asset-backed financing can blunt liquidity squeezes. As Louis Dreyfus’ disclosures show, a well-structured funding mix and contingent facilities materially reduce exposure to short-term dislocation. Third, governance and risk capability matter. Oliver Wyman-type industry guidance and direct executive commentary from large houses alike emphasise the need for professionalised risk management — from VaR and stress testing to counterparty credit frameworks and scenario planning. Medium-sized traders that professionalise these functions faster than peers will not only survive stress cycles — they will capitalise on them. Opportunity in turbulence Volatility has always been the oxygen of commodity trading. For emerging houses such as Gapuma, higher rates and more volatile public markets are both a threat and an opportunity. Those that refine their capital structures, deepen lender relationships, and sharpen trading and hedging playbooks stand to grow into the next generation of major merchants. The pathway demands operational rigour and financial sophistication — not big-ticket equity raises, but smarter use of debt, better working capital management, and a governance framework that institutional investors and banks find comfortable. As the giants adjust their capital allocation and operational footprints, medium-sized houses that combine commercial agility with a professional funding strategy can move from the periphery to the core of global commodity flows. The markets that set the price of capital — gilts, bonds and equities — will not merely be the […]
London: The New Crossroads of Trade
A Frozen Bridge for U.S.-China Relations A Welcoming Embrace for India 24th July 2025 As two tectonic shifts in global trade diplomacy unfold in London, the city once again finds itself a crucible for competing visions of globalisation. On one side, a faltering relationship between the United States and China teeters on the edge of renewed hostility, even as both parties prepare for a new round of negotiations. On the other, the arrival of India’s Prime Minister Narendra Modi marks the culmination of an ambitious UK-India trade pact, one being hailed as a milestone for post-Brexit Britain. These developments — playing out simultaneously in the same city — offer a revealing snapshot of the state of international trade, diplomacy, and strategic alignment in 2025. A Frozen Bridge for U.S.-China Relations Tensions between the U.S. and China remain acute. Despite a cordial front and public statements calling for “mutual respect” and “win-win cooperation”, trade between the two economic giants has stalled in key sectors. U.S. exports of crude oil, liquefied natural gas (LNG), and coal to China hit zero last month — a stark indicator of deepening friction. According to Chinese customs data, energy imports from the U.S. began collapsing in March when Beijing imposed retaliatory tariffs of 10–15% in response to American pressure. Washington’s rhetoric has veered between conciliation and brinkmanship. Treasury officials have suggested the relationship is “in a good place”, yet President Trump has issued an ultimatum: reach a deal by 12 August or face even steeper tariffs. With energy trade halted and broader economic trust eroded, negotiations now risk becoming performative rather than productive. Warm Welcome for India In stark contrast, Narendra Modi’s visit to London signals a rare bright spot in international trade. The UK-India trade deal, finalised this week, marks the most significant bilateral agreement for Britain since its departure from the European Union. It promises liberalised trade across goods, digital services, pharmaceuticals, and the movement of skilled labour. Symbolically and strategically, this partnership demonstrates both countries’ pivot away from traditional Atlantic alignments and towards a multipolar future. For India, this is part of a broader push to assert itself as a manufacturing and technological alternative to China. For the UK, the deal is a concrete step in delivering on the promise of “Global Britain” and diversifying supply chains beyond the EU and China. Diplomacy in a Fragmented World The juxtaposition of these two developments in London underscores the shifting tides in global diplomacy. Whereas Cold War-era alignments once dominated the international order, the 21st century is increasingly shaped by regional partnerships, transactional diplomacy, and contested norms of engagement. The China-U.S. standoff reflects a breakdown of trust between the two largest economies, with energy trade — a pillar of past cooperation — now weaponised. Meanwhile, India’s alignment with the UK symbolises a constructive alternative: partnerships built on shared democratic values, strategic interests, and mutual economic gain. Implications for Globalism and Security These contrasting stories also point to diverging models of globalisation. One is increasingly fragmented, shaped by tariffs, coercion, and rivalry. The other is cautiously optimistic, rooted in bilateralism and cooperation among emerging and middle powers. Yet the implications go beyond trade flows. A prolonged breakdown between China and the U.S. risks fuelling economic decoupling, reshaping energy markets, and accelerating the formation of parallel financial systems. Meanwhile, strengthened ties between countries like India and the UK could create new centres of influence, challenging traditional global institutions. London, long a symbol of open markets and internationalism, now hosts both a high-stakes power play and a hopeful handshake. The outcomes of these two engagements will reverberate well beyond the city — shaping not only trade balances, but the future of global diplomacy itself.
BRICS and the Future of Global Trade: Pragmatism in a Fragmented World
7th July 2025 As the United States turns inward—amplified by the resurgence of Donald Trump’s protectionist agenda—the BRICS alliance is stepping up to redefine the global economic landscape. This week, BRICS leaders convened at the Museum of Contemporary Art in Rio de Janeiro, not only as a strategic precursor to COP30 in Belém this November, but as a rebuke to the global North’s growing retreat into nationalism, militarisation, and selective multilateralism. While the Western-led global order has relied on the dollar, legacy institutions like the IMF and WTO, and an increasingly rigid rules-based system, many nations across the Global South are now questioning the relevance of that framework. In its place, BRICS—now comprising eleven members and dozens of aligned partners—is presenting a more pluralistic, decentralised, and pragmatic vision of global engagement. Brazil’s President Luiz Inácio Lula da Silva captured the moment bluntly: “We have witnessed an unparalleled collapse of multilateralism… Hard-won advances, such as climate and trade regimes, are under threat.” Lula’s warning reflects a broader frustration. From energy access and food security to digital infrastructure and commodity flows, countries are seeking platforms that prioritise fairness over dominance, resilience over rigidity. BRICS initiatives like the New Development Bank, BRICS Pay, and plans for cross-border local currency settlements are not merely technical alternatives—they represent efforts to insulate member economies from external coercion and supply shocks. The Rio declaration touched on several themes: climate vulnerability, development finance, and global governance reform. Yet the language was calibrated—muted, even. Brazil, with COP30 on the horizon, seems cautious about triggering trade retaliation or diplomatic fractures. Analysts observed that while the bloc’s ambition is growing, its internal cohesion remains fragile. Xi Jinping’s unexpected absence from the summit and the continuing diplomatic ambiguity around Russia and Iran underscore this. Nevertheless, the economic gravity of BRICS is undeniable. The bloc now represents 40% of the world’s population and GDP, and more than half of global emissions. It has overtaken the G7 on several structural indicators and is increasingly seen by emerging markets as a platform for voice, not just volume. From Gapuma’s vantage point—deeply engaged in commodities, infrastructure, and cross-border supply chains—the emergence of a multipolar trade environment has tangible consequences. The shift away from dollar dominance, the push for regional value chains, and the rise of Southern-led development finance initiatives are already reshaping trade routes, risk profiles, and investment flows. As one analyst in São Paulo put it: “The question isn’t whether BRICS is perfect—it’s whether staying on the sidelines of its emerging architecture carries greater risk.” Still, challenges persist. Internal divisions, dependency on fossil fuels, and muted transparency within BRICS structures remain unresolved. But in an era dominated by conflict, sanctions, and climate breakdown, emerging economies increasingly see the bloc as a necessary counterweight—not to replace the global order, but to rebalance it. COP30 in Brazil may be the true test. Whether BRICS can turn rhetorical solidarity into collective action on climate finance, infrastructure, and inclusive governance will determine whether this is a genuine pivot in world affairs—or just another summit communiqué filed and forgotten.