IREPAS Short Range Outlook : February 2025
Global longs market under very strong pressure from Chinese exports, Trump 2.0 brings uncertainty and volatility
The global long steel products market is currently under very strong pressure mainly because of Chinese exports, which have been increasing and not showing any signs of slowing down. We have already seen what Trump 2.0 means – uncertainty, volatility and a lack of visibility. It seems like the situation will get even worse until the dust settles and his goals are clearly understood. So far, Trump’s announcements have given rise to concerns about inflation, which will slow down interest rate cuts.
US long steel and construction segments waiting for the dust to settle
The market in the US has entered a waiting period in terms of the outcome of some of the decisions already made by the White House and others under consideration and delayed for further negotiations. New infrastructure projects are on hold, amid the government freeze on spending. Interest rates have not come down and there is no clear sign for the near future, thus delaying many projects and also purchases by would-be home buyers. Labor shortages in the construction sector are becoming a near certainty, causing delays and higher costs for construction developments. Domestic rebar producers are reluctant to increase prices for another 30 days, until there is certainty regarding the duties on Mexico. They are generally competing with each other rather than with imports, which are very light.
All eyes still on China
On the other hand, the real determining factor for rest of the world other than the US is China, simply because the US is now a separate world for the global steel market. We all need to wait and see what China’s policy in the current year will be: will they continue with steel exports of over 100 million mt or will they slow down to help the global market to stabilize?
EU mills locked in cycle of low demand and high costs
The EU steel market is suffering from continuing low demand for long products, with European mills locked in a cycle of poor demand and high costs. The construction market in most EU countries is still very slow due to seasonal reasons but also in general due to much less demand from investors. In this context, the merger of Badische and Van Merksteijn will certainly have an impact in terms of consolidation. Meanwhile, energy prices in Europe are once again at levels not seen since 2022. The cold winter and the shortage of base load in Germany have pushed electricity and gas prices to their highest levels of the last three years, at least until the end of spring. These higher costs will force long steel producers in the EU to increase prices and to shut down more capacities in 2025. Feralpi seemed to have stopped production completely in January, while Riva Germany officially announced shutdowns to run from January 1 to March 30.
EU’s long steel import quotas quickly exhausted at start of year
The EU’s import quota for “all other countries” was exhausted on day two or three at the start of the year, with the huge volumes which were imported by Bulgaria and Romania. This means there will not be more imports from “all other countries”. Turkey and Algeria are mostly not competitive enough to attract EU importers. The price increases announced by German and Italian mills have not yet been accepted by the market but they probably will be as soon as benders have to restock, especially given the current euro/US dollar exchange rate. The very strong US dollar is another factor keeping prices low in the international market.
Protectionism is the new magic word, consumers to lose out
Protectionism seems to be the new magic word for economies worldwide. The markets are running into a spiral of protectionism in which everybody will lose out, especially the middle-class consumers and industries.
Longs mills forced to cut outputs, low profits make environmental targets unattainable
Mills in the long steel products market are forced to lower their capacity utilization rates, which will negatively affect their cost of production. There is a chain reaction of displaced export capacities due to Chinese exports. The steel industry is also suffering from a lack of profits, that makes it impossible to achieve net zero commitments.
Current market very difficult to operate in, outlook very unpredictable and unstable
Under these circumstances, the current status of the market can be described as unstable and very difficult to operate in. The outlook for the next quarter is very unpredictable and unstable.
HRC prices in Europe hold steady; buyers cautious
The week before, ArcelorMittal announced a price increase of €30 ($31) per tonne for April/May-delivery HRC across Europe, with offers now reaching €660 per tonne ex-works or delivered, depending on the destination.
But other mills in Northern Europe refrained from following the move, keeping their offers for the second quarter of 2025 at €620-630 per tonne ex-works, industry sources told Fastmarkets.
However, buyers were cautious, and the traded volumes were limited, Fastmarkets understands.
“Final customers and stockholders still do not undertake a large-scale restocking. They wait to see how the market would develop,” a buyer source based in Northern Europe told Fastmarkets.
Buyers’ estimations for the workable market level were at €590-600 per tonne ex-works.
Fastmarkets calculated its daily steel hot-rolled coil index domestic, exw Northern Europe at €598.75 per tonne on Monday, down by just €0.42 per tonne from €599.17 per tonne on Friday February 7.
The Northern European index was up by €7.50 per tonne week on week and by €33.33 per tonne month on month.
Meanwhile, in Southern Europe, Fastmarkets’ corresponding daily steel hot-rolled coil index, domestic, exw Italy was €592.50 per tonne on Monday, unchanged from the previous calculation on Friday.
The index was up by €5.00 per tonne week on week and by €30.00 per tonne month on month.
The latest offers of April-delivery HRC in Italy were heard at €600-610 per tonne delivered, which would net back to €590-600 per tonne ex-works.
Buyers estimated the workable market level at €580-600 per tonne ex-works on Monday.
However, no major deals with HRC were heard in the Italian market.
Italian customers were well-stocked and were not in a hurry to buy new material, industry sources told Fastmarkets.
The market of imported HRC was also quiet on Monday due to trade risks related to the current steel safeguard review, which was expected to be over by the end of March.
Taiwan and Indonesia were heard offering March-shipment HRC at €560-570 per tonne CFR to Italy. Offers from South Korea were reported at €580 per tonne CFR.
HRC from Turkey was on offer to Italy at €590 per tonne CFR, including the anti-dumping duty, industry sources told Fastmarkets.
UK Steel calls Trump’s tariff proposal ‘deeply disappointing’
Industry association UK Steel says it is “deeply disappointing” that US President Donald Trump is targeting the UK with an additional 25% tariff on steel imports, Kallanish notes from its statement.
It remains unclear whether this will cancel all or some of the previous arrangements on existing Section 232 measures, the association adds. Until now, customers in the US could also apply for product-specific exemptions for tariff-free imports of products not made in the US.
UK Steel director general Gareth Stace says: “It is deeply disappointing if President Trump sees the need to target UK steel, given our relatively small production volumes compared to major steel nations. The UK produces world-leading steel, supplying the US with high-quality products for defence, aerospace, stainless, and other critical sectors, materials that simply cannot be replicated elsewhere.”
The association also notes fears of excess steel capacity being re-directed to other markets such as the UK. Without strong trade shields, unfairly priced imports could undermine domestic steelmakers and threaten the long-term viability of the industry, it adds.
“The imposition of US tariffs on UK steel would be a devastating blow to our industry. The US is our second largest export market after the EU. At a time of shrinking demand and high costs, rising protectionism globally, particularly in the US, will stifle our exports and damage over £400 million [$496m] worth of the steel sector’s contribution to the UK’s balance of trade,” Stace says.
“At the same time, the introduction of further US tariffs will inevitably divert global trade flows, with excess steel potentially redirected to the UK market. This reinforces the urgent need for watertight UK trade measures in 2026 to prevent surges in imports following the UK’s steel safeguards expiry. Accelerating the UK’s CBAM to 2026 would provide an additional layer of protection against unfairly priced steel. The UK Government must act decisively to shield our domestic industry from the fallout of rising global protectionism,” Stace concludes.
Carrie Bone UK
Talent management, specialisation essential, argues service centre
When reconsidering their corporate strategies, small and medium-sized companies (SMEs) in the steel sector ought to take talent management into account, as well as specialisation and sustainability reporting, says 247TailorSteel.
The Dutch-German service centre group has compiled an article of recommendations for its customers in which it addresses metals industry trends for 2025. As one of the key themes, it emphasises that specialisation is becoming ever more important. “Create a clear advantage for yourself against the mass producers, which can deliver big volumes, but do not offer specialised knowledge and tailored solutions,” Kallanish reads in the article.
Given that a shortage of skilled personnel has become a key issue for the German economy, 247TailorSteel advises SMEs to contact technical colleges to identify potential newcomers at an early stage. Also, vocational training of existing staff is essential to keep them updated and motivated in their work.
The group also touches the aspects of reshoring of overseas sites to the home country, in the interest of shorter transport times, lower transport costs, and fewer emissions caused by transport.
Speaking of emissions, the article notes that one bitter pill cannot be averted: reporting obligations in the interest of the Emission Trading System (ETS) and the Corporate Sustainability Reporting Directive (CSRD). “All this will cost your time as well as financial resources. But as unpleasant as it is, you need to face that task,” 247TailorSteel writes.
Christian Koehl Germany
Trump officially imposes 25% tariffs on steel, aluminium
US President Donald Trump has officially issued a blanket 25% tariff on all steel and aluminium imports to the US, Kallanish reports.
The president signed an executive order creating the tariff on Monday night. The move was expected after Trump mentioned it informally on Sunday whilst travelling to the Super Bowl football game.
“It’s a big deal,” Trump said Monday in the Oval Office. “This is the beginning of making America rich again.”
Currently, the US has postponed the 25% tariff it planned to enact against Canada and Mexico.
Kristen DiLandro USA