Day: 27 March 2025

Newly announced auto tariffs by the US will not only affect imports but also US-based automakers producing vehicles for export markets, the European Automobile Manufacturers’ Association, or ACEA, said March 27 in response to 25% import taxes on cars and auto parts imposed by US President Donald Trump.

Trump said the tariffs would take effect April 2, with charges on businesses importing vehicles starting the following day. Taxes on auto parts are expected to begin in May or later. The measures are intended to boost the US economy and job creation, Trump said. The new levies come on top of the existing 25% duties on steel and aluminum, as well as on goods from Mexico, Canada and China.

ACEA voiced deep concern over Trump’s announcement of additional tariffs on the auto sector. It emphasized the need for the EU and US to engage in dialogue to find an immediate resolution and avert the damaging consequences of what it termed as a “trade war”.

“European automakers have been investing in the US for decades, creating jobs, fostering economic growth in local communities, and generating massive tax revenue for the US government,” said ACEA Director General Sigrid de Vries. “We urge President Trump to consider the negative impact of tariffs not only on global auto makers but on US domestic manufacturing as well.”

ACEA highlighted that European manufacturers export 50%-60% of the vehicles they make to the US, making a substantial positive contribution to the US trade balance. According to the data from the US Department of Commerce, the main countries affected will be Mexico, South Korea, Japan and Canada. Mexico alone exported around 2.97 million vehicles to the US in 2024, accounting for 80.2% of Mexico’s total vehicle exports. Germany, As the fifth-largest vehicle exporter, shipped 446,556 cars to the US last year, making it the European country most affected, followed by the UK (96,451) and Slovakia (93,301).

The tariffs are also likely to affect European steel producers and service centers linked to the auto industry, especially given the existing 25% tariffs on their products. The auto industry is the second-largest consumer of steel, accounting for 17% of steel procurement in the EU.

Platts, part of S&P Global Commodity Insights, assessed hot-rolled coil in Northwest Europe at Eur640/mt ex-works Ruhr March 26, up Eur5 day over day. Steel prices have been under pressure since the beginning of the year due to the weak economy. Although prices have risen from Eur560/mt registered on Jan. 2, they remain far below the peak of Eur760/mt reached in February 2024 and the historical high of Eur1,230/mt recorded in March 2022.

According to Eurofer and ACEA data, new passenger car registrations increased slightly by 0.8% in 2024, reaching about 10.6 million units, still 2.4 million below pre-pandemic levels (13 million in 2019). In February, Eurofer noted in its economic outlook that demand is likely to remain weak until macroeconomic conditions and consumer incomes improve. A full recovery in global trade, particularly from the US and China, will be crucial for EU car exporters, it said.

The decline reflects slowed output across major markets, though some regions bucked the trend with growth, according to the association’s latest data published on Tuesday March 25.

Big drops in China, Japan, and the United States
China, the world’s largest steel producer, saw its output fall by 3.3% year on year to 78.9 million tonnes in February, with the country’s struggling real estate sector still weighing on domestic steel demand.

But while new housing starts were down by 29.6% year on year in January-February, infrastructure investment (excluding utilities) and the supply industries, as well as automotive output, rose in the same period by 5.6% and 13.9% year on year respectively.

Despite a drop in crude steel production since the start of the year, there was no significant movement in prices because the decline was in line with market expectations.

China’s steel export market may also suffer from additional US tariffs, with Chinese exporters reportedly exploring alternative markets in the Middle East, Africa, and South America.

Japan recorded an even sharper year-on-year drop in output last month, declining by 8.5% to 6.4 million tonnes, while the country’s steel market has struggled with falling exports, rising competitive imports and a weakened domestic economy.

The market is also now facing US tariffs, though Japan is seeking exemptions because its steelmaking sector relies heavily on exports.

Such measures could impact steel production considerably, with Tadashi Imai, chairman of Japan’s Iron and Steel Federation, warning that US tariff measures could lead to the country’s lowest steel output levels in 50 years.

The US had already imposed a 25% tariff on steel and aluminum imports in March and is considering additional tariffs on automobiles in April.

The US also reported a decrease, with crude steel output falling by 7.0% to 6.0 million tonnes.

Steep declines in Germany, Iran, and Russia
Germany reported a sharp decline, with a 13.5% drop to 2.7 million tonnes, amid weak demand and economic challenges in the country and the European Union.

Iran saw an even steeper collapse, with production plummeting by 21.8% to 1.7 million tonnes. In February, export markets for semi-finished products in the West Asian country have remained slow since late January due to weak demand and price uncertainty.

Later in the month, cold weather and a shortage of gas and electricity supplies further affected Iran’s steel sector.

Russia’s estimated output fell by 3.4% to 5.8 million tonnes in February 2025 compared to February 2024.

India and Brazil report gains
India was the standout performer in crude steel production in February, increasing output by 6.3% year on year to 12.7 million tonnes.

Brazil saw only a minor decline of 1.6% in February but posted a small 0.9% increase in crude steel production for the January-February period.

South Korea recorded a modest increase of 0.7% year on year in February, though overall output for the first two months of the year declined by 2.8%.

Africa’s growth stands out
One of the few bright spots was Africa, where production grew by 7.6% to 1.9 million tonnes in February compared to the same period last year, though the region remains a small player in the global steel market. This sharp rise contrasts with a milder 1.7% growth in the January-February period, suggesting a possible short-term boost rather than sustained growth.

Regional trends in crude steel production
Regional trends mirrored these national shifts in February 2025 compared to February 2024.

Asia and Oceania, which includes China, India, and Japan, saw output fall by 2.6% to 107.3 million tonnes.

The European Union’s production dropped 7.1%, while non-EU European countries, including Türkiye and the UK, saw an even larger decline of 9.7%.

The Middle East recorded the biggest regional contraction at 11.5%, primarily due to Iran’s sharp decline.

North America’s output dropped 6.3%, led by weakness in the US market.

Russia and other Commonwealth of Independent States (CIS) countries, including Ukraine, reported a smaller drop of 1.9%, while South America registered a 3.2% decline in output.

Although Brazil showed resilience with its minor year-on-year decline, South America’s output fell, with the region’s crude steel production down by 3.2% in February and 2.5% over the January-February period.

Fastmarkets calculated its daily steel hot-rolled coil index domestic, exw Northern Europe, at €645 ($695) per tonne on Wednesday, up by €1.67 per tonne from €643.33 per tonne on Tuesday.

The Northern European index was up by €7.50 per tonne week on week and by €18.75 per tonne month on month.

A leading European integrated mill continued to offer June-delivery coil at €680 per tonne ex-works or delivered, depending on the destination, Fastmarkets heard.

Offers at €640-660 per tonne ex-works for May/June-delivery HRC were also available in Northern European market, sources told Fastmarkets.

Some transactions were reported at €640-650 per tonne ex-works, with buyers estimating the tradeable market price close to these levels.
“Mills in Northern Europe are well-booked for May and some small volumes are available for June,” a producer source told Fastmarkets.
The producer source added that limited supply caused, on one hand, by problems at some domestic mills, and on the other, by the decreased interest in buying imported HRC due to trade risks, have supported domestic prices.

Restocking has also been more active these days, according to the producer source.
The source added that they expected prices to rise further in the next quarter of the year.

But buyers were more skeptical.
“I do not see a significant price increase as being possible because the European economy is still not performing well,” a distributor source based in Germany told Fastmarkets.
In Southern Europe, meanwhile, Fastmarkets’ daily steel hot-rolled coil index, domestic, exw Italy, was calculated at €624 per tonne on Wednesday, down marginally by €0.17 per tonne from €624.17 per tonne on Tuesday.
The index was up by €1.50 per tonne week on week and by €13.79 per tonne month on month.
Italian suppliers were heard offering HRC at €620-640 per tonne ex-works.
Buyers, however, estimated the workable market level to be slightly lower, at €610-620 per tonne ex-works.
The market for imported HRC remained largely quiet.
Indonesia was heard offering the lowest price for imported material in the European market at €640-650 per tonne CFR Italy.
The levels offered to Northern Europe were slightly higher, Fastmarkets understands. Sources reported Indonesian offers of HRC at €580 per tonne CFR Antwerp.
Turkey continued offering HRC to Europe at €590-600 per tonne CFR, industry sources told Fastmarkets.
India was heard offering HRC to Italy at €565-575 per tonne CFR.
But buyers were reluctant to book HRC from imports due to the trade risks and the long delivery times, Fastmarkets understands.

Italy
Despite the likely push for higher prices, S275-grade heavy plate was still on offer in Italy at €660-670 per tonne ex-works with lead times of around three weeks, Fastmarkets understands, but transaction prices were “stuck” at €640-650 per tonne ex-works.

“There is not simply enough demand [for plate] and prices for commodity grade [heavy plate] are more or less stuck. However, we see slab prices ticking up, so there will probably be another attempt to increase plate prices to track this,” a buyer in Italy said.

But Italian steel plate buyers remain skeptical about the potential uptrend in prices given the current muted demand, sources said.

“If demand was sufficient, prices [for heavy plate] would have already been €10-20 per tonne higher,” a mill source told Fastmarkets.

As a result, Fastmarkets’ weekly price assessment for steel domestic plate, 8-40mm, exw Southern Europe, was unchanged on Wednesday at €640-650 per tonne.

Overseas suppliers of steel slab, the key feedstock for plate production, started to increase their offer prices earlier this month.

Overall, the range of offers from Asian suppliers was $520-540 per tonne CIF, although heavy plate from Asia with May shipment was reported at €580-600 per tonne CFR.

Sources said, that suppliers from South Korea were being “more cautious” after tougher safeguard measures were announced by the EU.

“Interest in new heavy plate imports [in Italy] have been minimal [and] there are sufficient stocks in the Italian ports,” a second buyer source said.

Northern Europe
In Northern Europe, demand for commodity grade heavy plate remained limited.

“The spot market for commodity grade plate is very slow, with mainly hand-to-mouth bookings” a buyer source in Germany told Fastmarkets.

“The only positive situation [is] in ‘project business’ or for higher grades, with a limited number of specialist mills obtain interesting orders for offshore foundations, monopiles or wind farms,” the buyer source added.

One German mill, traditionally focused on project business, was offering heavy plate with lead times of around six weeks at €750-790 per tonne ex-works.

Another German supplier was offering plate at €700-730 per tonne from one location and at €680-700 per tonne from another.

Buyer estimates of the tradable level came in at €680-700 per tonne ex-works, with most indications around €690-700 per tonne ex-works.

Fastmarkets’ weekly price assessment for steel domestic plate, 8-40mm, exw Northern Europe, was €690-700 per tonne on Wednesday, unchanged week on week.

In Central Europe, meanwhile, a Czech reroller was offering S275-grade steel plate at €670 per tonne ex-works, in both the domestic market and to Poland, sources told Fastmarkets.

Sources said the achievable price for such material was around €650-655 per tonne ex-works.

Chinese steel exports will remain elevated in 2025 and continue exerting pressure on global markets, while widening overcapacity will push certain third countries to seek alternative outlets and exert import pressure on the EU, the European Commission concluded during its safeguard measure review.

The Commission confirmed earlier this week its safeguard measure adjustments, effective 1 April, following a review initiated in December.

Since the last investigation, the import presence in the Union market of some origins where capacity expansions continue – notably ASEAN, India, China, Middle East and North Africa – remains high or has increased, the Commission notes. “This data showed a correlation between capacity developments and level of import pressure from those origins on the Union market,” it adds.

Besides overcapacity, the Commission cited trade defence measures in other countries, including US tariffs, as justification for adjusting safeguard measures.

The number of trade defence measures in place at the end of 2024 exceeded those in place the year before. Beyond trade defence measures, the number of tariff measures in place increased in Türkiye, Colombia and Canada, while South Africa implemented safeguard measures on certain steel products and India initiated a safeguard investigation on flat steel, the Commission states.

The US meanwhile imposed a blanket 25% steel tariff. “Given the size of the US market and the level of duty, the Commission considers that this development, together with the additional tariff measures implemented by other countries, would create further tensions on the steel markets, thus increasing the risks of additional trade diversion into the Union,” it adds.

The Commission’s investigation found that EU production capacity utilisation of the products concerned fell to 67% in 2023 and 2024 versus 78% in 2021. Long products suffered the steepest drop, to 61.3% utilisation in 2024 versus 74.7% in 2021.

Consumption fell 14% in 2024 versus 2021 to 143.9 million tonnes, but domestic sales market share dropped only to 79% from 79.7%. Union industry profitability was negative 0.4% in 2024 versus 9.1% in 2021.

The market share of imports was 25.6% in 2024 versus 24.8% in 2021 for flats, remained at 12.8% for longs, and inched up 0.1 percentage points for tube to 21.9%.

The Commission identified categories 1A – hot rolled coil, 4A – metallic coated sheet, 7 – plate, 21 – hollow sections, and 24 – other seamless tube as the products facing most import pressure.

Between 2021 and 2024, consumption decreased by 27% in category 4A, on average by 17% in categories 1A and 24, and 7% in categories 7 and 21. Import shares increased significantly in all categories.

Adam Smith Poland

US President Donald Trump has initiated an additional 25% tariff on foreign-made cars coming into the US, Kallanish reports.

“This is very modest, and what we’re going to be doing is a 25% tariff on all cars that are not made in the United States,” Trump commented from the Oval Office whilst signing the executive order.late Wednesday.

The new tariff is expected to go into effect 2 April. It is designed with the hope of bringing auto manufacturing back to the US. The new tariff is in addition to tariffs already in place.

“This is the automobile industry, and this will continue to spur growth like you haven’t seen before,” Trump contends.

During the briefing, the president talked about the amount of revenue such a tariff could bring to the US.

“We expect that these tariffs will result in over $100 billion of new annual revenue to the United States of America in tariff revenue,” he states. “I think ultimately, we could probably anywhere from $600 billion to a trillion dollars will be taken in over the relatively short-term period. I think we go from $600 billion to a trillion within two years.”

John Isaacson USA