Category: Latest Updates

The European Parliament voted in favor of a new trade regime for steel sector, expected to replace current safeguard measures, Fastmarkets heard in the week begun Monday January 26.
The global steel safeguards in place since 2018 under the World Trade Organization (WTO) will expire on June 30 this year.

In October 2025, the European Commission unveiled a proposal for sweeping reform of its steel import safeguards, suggesting cuts in tariff-free quotas by about 47% and imposing a steep 50% ad valorem duty on any volumes beyond the new threshold.

On January 22, the European Parliament’s International Trade Committee (ITC) fully supported the proposal with 36 votes in favor and 2 against, with 5 abstention, a press release on the parliament’s website said.

The approved text proposes lower import quotas, capping tariff-free steel imports at 18.3 million tonnes per year, down by 47% from 2024 quota levels.

Imports exceeding the quota, as well as steel products not covered by it, would be subject to a 50% customs duty.

The changes were intended to better shield EU steelmakers from global overcapacity and unfair trade practices, the Commission said earlier.

The goal was to help the struggling EU steel sector return to sustainable capacity utilization rates near 85%, up from the current average of 67% and to align import market shares with pre-crisis levels of 15% for flat and stainless steel and 5% for long steel, Fastmarkets understands.

The ITC members stressed that the new rules must comply with WTO requirements and called on the European Commission to closely monitor their effects, including assessing whether the list of products covered should be amended.

In addition, the proposed legislation would prohibit all steel imports from Russia and Belarus, extending existing trade restrictions to explicitly include steel products from both countries.

The proposal specified that import calculations should exclude all steel imports originating from the Russian Federation and Belarus, because these are already subject to import bans.

Finished steel imports from the two countries have, in fact, been banned since 2022, following Russia’s invasion of Ukraine and Belarus’s support for Russia.

But semi-finished steel products from Russia, notably slab, were still allowed to enter the EU until September 30, 2028.

In October 2022, the EU imposed quota limits to last for two years on Russian semi-finished steel products, in response to Russia’s unprovoked invasion of Ukraine.

In December 2023, the quotas were extended until September 30, 2028, following a lobby campaign led by rerollers in Italy, Belgium and the Czech Republic.

A source, familiar with the matter suggested that, under the new regulation, Russian steel slab might be completely banned before the quota period expired.

“[There is a] 90% chance that Russian slab will be banned as of July 1,” the source said.

The proposal still must be approved by the European Council. The ITC has also approved a decision to start negotiations with the Council, with the intention of reaching a deal on the final form of the bill in the spring, according to the European Parliament’s release.

Market effects, next steps
The European Parliaments did not specify the exact timeline for new measures coming into force, but sources familiar with the matter told Fastmarkets that it was likely that the new regime would come into force after safeguards expired in July 2026.

For traders, steel processors, tubemakers and other stakeholders reliant on steel imports in Europe, the shift to a new regime will tighten supply for certain grades, pushing up prices for in-quota steel.

“We are already dealing with the Carbon Border Adjustment Mechanism [CBAM, which came fully came into force on January 1],” a German buyer said, “so imports are limited and [domestic steel] prices are rising. A new regime will cut import availability even more, which will be especially sensitive for cold-rolled and hot-dipped galvanized material.”

In a proposal seen by Fastmarkets, the quota for hot-rolled coil, category 1A, would be 5,198,712 tonnes per year. For reference, in 2025, the EU imported around 9.5 million tonnes of HRC, according to Global Trade Tracker statistics.

Domestic flat steel prices in Europe have been gradually increasing so far in January, mainly driven by CBAM.

Fastmarkets’ daily steel hot-rolled coil index, domestic, exw Northern Europe, was €655.83 ($784.92) per tonne on January 29, up by €0.83 per tonne from €655.00 per tonne the day before.

The index was up by €12.08 per tonne week on week and by €28.33 per tonne month on month.

 

European rebar producers continued their attempts to raise prices during the week to Wednesday January 28 amid higher scrap and electricity costs and uncertainty in the import sector caused by the introduction of the Carbon Border Adjustment Mechanism (CBAM).

But customers resisted the higher offers amid slow construction activity and ample stocks.

In Northern Europe, offers varied within €620-640 ($742-766) per tonne delivered. Levels of €620-630 per tonne delivered were heard in Germany, while the higher end referred to Belgium and the Netherlands.

Estimates of workable levels mostly varied within €610-620 per tonne delivered, but some sources indicated €590-600 per tonne delivered as a workable level in Germany, which was considered somewhat undervalued amid increasing feedstock costs.

Trading was muted because of slow construction activity which has been hampered by the seasonal slowdown and harsher-than-normal winter conditions, according to sources.

Sufficient inventories of domestic and import material built in the fourth quarter of 2025 added to tepid buying.

Fastmarkets’ weekly price assessment for steel reinforcing bar (rebar) domestic, delivered Northern Europe was unchanged week on week at €610-620 per tonne on Wednesday.

“We should wait until real demand comes back to see price increases. This should be in the second half of February,” one producer told Fastmarkets.

Mills in Italy also increased rebar asking prices, with new offers at €600-620 per tonne ex-works, but these also faced resistance from buyers.

“Scrap prices have increased by around €7-8 per tonne over the course of the month while energy costs have remained high. In addition, CBAM is creating concern in the market and is leading many market participants to believe that the increase we are already seeing in flat products can now realistically be transferred to long products as well, including rebar and reinforcing steel,” an Italian cut and bend mill said.

“We will see how the situation develops over the course of the week, but steel mills are currently very firm on the price levels communicated,” the source said. “But they are not able to achieve everything they are asking for mainly due to the low level of sales.”

“I think this is all speculation since it’s been raining for days and everything seems to be stopping,” another cut and bend producer told Fastmarkets.

Tradable levels were reported within €560-590 per tonne ex-works, which was reflected in the corresponding Fastmarkets assessment.

Fastmarkets’ weekly price assessment for steel reinforcing bar (rebar) domestic, exw Italy was €560-590 per tonne ex-works on Wednesday, narrowing downward by €10 from €560-600 per tonne on January 21.

Spain was one of the few markets where suppliers managed to achieve higher levels, supported by good demand and favorable market sentiment amid the strong performance of the economy in 2025 and expected gross domestic product (GDP) growth of 2.1-2.4% in 2026.

Some bookings were said to have come through at €665 per tonne delivered, the level suppliers had been trying to achieve for several weeks.

Fastmarkets’ price assessment for steel reinforcing bar (rebar) domestic, delivered Spain was €665 per tonne on Wednesday, up by €15-20 from €645-650 per tonne on January 21.

 

European hot-rolled coil (HRC) suppliers were pushing for higher offers for second-quarter delivery material. Buyers held back, but prices were increasing step by step, supported by the Carbon Border Adjustment Mechanism (CBAM), Fastmarkets heard on Thursday January 29.

HRC prices in Northern Europe were still lagging behind official offers. Since the beginning of January, however, domestic prices had been gradually increasing and, in the past couple of weeks, buyers have started showing more acceptance of higher prices.

“There are not many alternatives. The pool of import suppliers is smaller because of CBAM, safeguards, antidumping duties, so European mills are comfortably booked and managed to slowly push prices up,” a buyer in Germany said.

In Germany and the Benelux area, levels of €650 ($778) per tonne ex-works were gradually achieved in deals.

Buyers’ estimates of workable levels were reported at €650-660 per tonne ex-works.

Offers from integrated mills in Northern Europe were reported at €670-685 per tonne ex-works for April delivery coil. March delivery HRC was heard to be largely sold out, with only limited availability left at some suppliers.

Italy-origin coil was offered to Germany at €680-700 per tonne delivered, but so far buyers were reluctant to accept higher offers, so no new business was reported.

As a result, Fastmarkets’ daily steel hot-rolled coil index domestic, exw Northern Europe was €655.83 per tonne on Thursday, up by €0.83 per tonne from €655.00 per tonne on Wednesday January 28.

The index was up by €12.08 per tonne week on week and by €28.33 per tonne month on month.

Fastmarkets’ corresponding daily steel hot-rolled coil index domestic, exw Italy was calculated at €643.33 per tonne on Thursday, increasing by €0.83 per tonne from €642.50 per tonne a day earlier.

The index was up by €7.70 per tonne week on week and by €20.21 per tonne month on month.

Several market sources indicated that Italian producers could still offer March-delivery coil.

Target prices were reported around €650-660 per tonne ex-works.

But buyers suggested that achievable prices were closer to €630-640 per tonne ex-works, reflecting recent transaction levels.

Supplier sources estimated workable levels at no lower than €640-650 per tonne ex-works, while one producer set the bar at €650 per tonne ex-works minimum.

“Demand is slow, waiting for real discussions,” a mill source said.

“The current market situation is still dull, there is still no real restart of demand,” another supplier said.

In the secondary market, 4mm HR sheet was offered at around €750 per tonne delivered, but some steel service centers were still able to sell at €720-730 per tonne CPT using old HRC feedstock, sources said.

Meanwhile, market participants said appetite for fresh import bookings remained limited because of the EU’s forthcoming CBAM rules, the shift to the new trade regime and uncertainty around the quota volumes still available under existing safeguard measures.

Interestingly, several sources pointed out that for actual import bookings currently happening in the market, parties were using actual emissions data for CBAM cost calculations.

“Final emissions verification is expected in early 2027 based on 2026 reporting,” a source familiar with the matter said.

A minor tonnage of HRC from India, meanwhile, was heard booked in Italy at €600 per tonne DDP, CBAM costs included. Turkish HRC was on offer to Italy at €630-640 per tonne DDP, CBAM costs included.

 

The uptrend in the European steel hot-rolled coil market continued on Wednesday January 28, with suppliers insisting on higher offers and buyers gradually accepting the increases, sources told Fastmarkets.
Sources said the rising prices were being driven by fears of a shortage of imports at higher costs due to EU safeguard measures and the introduction of the Carbon Border Adjustment Mechanism (CBAM).

In Northern Europe, integrated mills still had some limited availability of March-delivery coil, while some suppliers claimed to be already completely sold out of first-quarter volumes.

Offers for April delivery were hovering around €670-680 per tonne ex-works, depending on supplier, sources said.

Buyers, however, estimated achievable prices at €640-650 per tonne ex-works, with the top end of that range most likely, in line with recent transactions.

“[HRC] prices are slowly climbing – not driven by demand but, rather, by fear of higher import costs due to CBAM and safeguards,” a buyer in Germany told Fastmarkets.

Despite buyer resistance to higher new offer prices so far, the mood remains largely optimistic, buoyed by the regulations limiting new imports.

“At the beginning of January, there was a lot of resistance to the uptrend, but now we are seeing more acceptance on the buyer side. Prices [for HRC] are moving up slowly, but steadily,” a second buyer said.

Fastmarkets’ daily steel hot-rolled coil index, domestic, exw Northern Europe, was €655 ($781.21) per tonne on January 28, up by €5.50 per tonne from €649.50 per tonne on January 27.

The index was up by €12.41 per tonne week on week and by €27.50 per tonne month on month.

Some limited availability remained for March-delivery coil in Italy.

“Prices are gradually improving,” a supplier source said. “Earlier we were testing the market with higher numbers, but now [those are] our firm offers.

“Our order book is strong, which is why we can wait until the higher offers are accepted,” the source added.

Offers were heard at €650-660 per tonne ex-works, while estimates of the workable level were about €630-635 per tonne ex-works.

Fastmarkets’ daily steel hot-rolled coil index, domestic, exw Italy, was calculated at €642.50 per tonne on Wednesday, increasing only by €4.54 per tonne from €637.96 per tonne a day earlier.

The index was up by €7.50 per tonne week on week and by €19.38 per tonne month on month.

 

European domestic prices for cold-rolled (CRC) and hot-dipped galvanized (HDG) steel coil were stable to slightly higher in the week to Wednesday, with limited import availability, especially in the CRC sector, playing a central role in recent upward price momentum, Fastmarkets heard on Tuesday January 27.

Northern Europe
During the assessment week, producers in Germany and the Benelux area followed market leader ArcelorMittal’s move and also announced higher offer prices for second-quarter delivery CRC and HDG.

In the week to January 23, ArcelorMittal came to the market with higher offers for hot-rolled, cold-rolled and hot-dipped galvanized coil. New offers for April-delivery HDG from the supplier were reported at €820 ($980) per tonne delivered (around €805 per tonne ex-works), compared with €780 per tonne delivered for March.

A supplier in the Benelux area was hoping to get €790 per tonne ex-works for HDG and €795 per tonne ex-works for CRC.

In Germany, offers were reported at €790-810 per tonne delivered (€775-795 per tonne ex-works) for both CRC and HDG, depending on supplier.

Integrated suppliers in Northern Europe had no CRC and HDG availability for first-quarter delivery, market sources said.

New offers were not yet accepted, but buyer sources overall agreed that increases were “inevitable,” considering the lack of new imports because of the EU’s Carbon Border Adjustment Mechanism (CBAM).

Buyers in Germany and the Benelux area estimated workable prices for CRC no higher than €750-770 per tonne ex-works during the week to January 28, and €750-760 per tonne for HDG.

Fastmarkets’ weekly price assessment for steel cold-rolled coil, domestic, exw Northern Europe, was €750-770 per tonne on Wednesday, up by €10 per tonne from €740-760 per tonne the previous week.

The weekly price assessment for steel hot-dipped galvanized coil, domestic, exw Northern Europe, was €750-770 per tonne on Wednesday, stable week-on-week.

Southern Europe
In Italy, meanwhile, local suppliers managed to achieve €780 per tonne delivered (€765-770 per tonne ex-works) for April CRC volumes. But several sources claimed that €780 per tonne ex-works had already been agreed in deals and that suppliers were hoping for “more than €800 per tonne delivered” for the second quarter.

“In the CRC sector, we have a lack of supply. New imports are a complete disaster because of CBAM, and domestically we only have [one re-roller],” a buyer in Italy said.

Fastmarkets’ weekly price assessment for steel cold-rolled coil, domestic, exw Southern Europe, was €770-780 per tonne on Wednesday, stable week-on-week.

Meanwhile, the weekly price assessment for steel hot-dipped galvanized coil, domestic, exw Southern Europe, was €760-780 per tonne on Wednesday, also stable week-on-week.

Offers of galvanized coil in the region were reported around €790-805 per tonne ex-works, depending on supplier, while achievable prices were estimated at €750-780 per tonne by buyers in Italy, Spain and Portugal.

Despite buyers’ resistance to price rises, sentiment was largely positive, with CBAM expected to further curb new imports, supporting domestic prices.

Imports
Market sources said that new import offers of CRC and HDG were extremely scarce, due to CBAM’s effects and also the continuing anti-dumping (AD) probe against CRC originating in India, Japan, Taiwan, Turkey and Vietnam.

“There is a very limited pool of [CRC] suppliers left outside of the AD [investigation] – South Korea, Brazil, Thailand. But then we have CBAM costs for everyone, so it’s still challenging to negotiate the price,” a buyer in Italy said.

Several sector sources said that they were even considering booking CRC from Japan, despite an AD probe, and China, which is already a subject to AD duties for CRC. But long lead times were another concern.

“There are concerns that CRC from Asia might arrive too late – end of second quarter or early third quarter 2026 – and we are still lacking clarity on how quotas will be distributed under the new safeguards regime. It’s all very risky,” a second buyer said.

And CRC offers from South Korea was heard at €750-760 per tonne DDP in Spain and Italy earlier in January – CBAM costs included – but during the assessment week marker sources reported no new offers and said that these tonnages were sold out.

Buyers estimated achievable prices for imported CRC at €720-730 per tonne DDP in Southern Europe.

To manage unpredictable CBAM costs, European buyers have been opting for import bookings on a DDP basis recently. Trading houses in Europe were offering imported coil partially or fully accounted for CBAM costs on a DDP basis, but deals were still scarce.

Fastmarkets’ weekly price assessment for steel cold-rolled coil, import, ddp Southern Europe, was €720-750 per tonne on Wednesday, stable week-on-week.

The weekly price assessment for steel cold-rolled coil, import, ddp Northern Europe, was €720-750 per tonne on the same day, also unchanged week-on-week.

On a CFR basis, no new CRC offers were heard during the assessment week.

For HDG, trade sources reported a transaction for Vietnamese material, 0.5mm, zinc coating z100, at €700 per tonne CFR to Antwerp, for a minor tonnage, excluding CBAM costs.

Market sources estimated that, with CBAM costs, the price of the material would be around €780-790 per tonne DDP.

According to Fastmarkets’ CBAM calculator, costs for Vietnamese HDG, using default emissions values including 10% mark-up, would be around €91-161 per tonne, depending on carbon credits prices (Carbon EU Allowance).

Fastmarkets’ weekly price assessment for steel hot-dipped galvanized coil, import, cfr main port Northern Europe, was €700-720 per tonne on Wednesday, narrowing upward from €680-720 per tonne seven days before.

Overall, new import offers for HDG material were scarce, with CBAM and tight safeguard quotas keeping trading extremely quiet.

 

Austria increased crude steel production in December compared with the previous month, according to worldsteel data. Output amounted to 619,853 tonnes, up 5.7% month-on-month and 15.8% higher year-on-year, Kallanish notes.

In 2025, the country produced 7.55 million t of steel, versus 7.13mt in 2024, bucking the overall EU and global output decline trend.

Austria remained 22nd in the ranking of top global steel producers in December, data show.

Overall EU output in December was up 11.4% on-year to 9.86mt. January-December production was 126mt compared with almost 129mt in 2024.

Primetals Technologies is implementing a software upgrade across the process control systems at voestalpine Stahl’s BETA 2 pickling line and tandem cold mill (PLTCM) in Linz, Austria.

Voestalpine is pursuing production cutbacks and layoffs in Austria and Germany, because it does not expect the economic situation to improve in the coming months (see Kallanish passim).

In the group’s first fiscal half-year – April through September 2025 – revenue declined by 5.6% on-year to €7.6 billion ($9.1 billion). Consolidated earnings before taxes increased by 12% to €278 million, while profit after tax rose by 8.6% to €199m.

The Austrian steelmaker previously expressed optimism over economic stimulus in the form of the infrastructure spending programme announced by the German government.

Voesalpine will supply steel to Chinese electric vehicle producer BYD for its new car factory in Hungary. The company was chosen by BYD because of its geographical proximity to the Hungary plant, and the high quality and excellent reputation of Austrian steel, the Chinese company noted.

The European Parliament’s INTA trade committee has voted to approve proposed new EU trade measures, including steel tariffs and import quotas, aimed at counteracting the effects of the global steel production surplus on the bloc’s market.

The committee voted 36-2 — with five abstentions — to adopt the measures that would cut annual tariff-free steel import volumes to 18.3 million metric tons, down 47% from 2024 levels, while applying 50% customs duties on imports exceeding quota levels.

The measures as backed by INTA are at core the same as those voted on by the European Council back in December, reducing tariff-free quotas by nearly half, but the latest version does not support the reintroduction of the carry-over of unused quotas.

The committee has also tightened up the “melt and pour” rules, specifying that quota allocation should be determined by the country of “melt and pour”, supported by robust and verifiable documentation, such as mill test certificates, European steel association Eurofer said in a note following the vote.

INTA also imposed a complete ban on Russian and Belarusian steel, as the EU moves to shield its struggling industry from global overcapacity ahead of expiring World Trade Organization safeguards

“Steel production is a strategic priority for Europe,” according to MEP Karin Karlsbro, part of Renew Europe Group. “In times of geopolitical uncertainty, the strength of our steel industry is central to Europe’s resilience. Today, we have said yes to continued tariff-free trade with Ukraine and no to Russian steel imports into the EU. This is a clear demonstration of European resolve.”

The committee said negotiations with the European Council will now start, with the aim of reaching agreement on a final version of the bill in the spring.

Platts, part of S&P Global Energy, assessed on Jan 27 domestic HRC in Northern Europe at Eur640/mt ex-works Ruhr and in Southern Europe at Eur630/mt ex-works Italy, both unchanged day over day.

The endorsement of the “Towards 2030: A Joint India-European Union Comprehensive Strategic Agenda” on Tuesday marks a structural shift in how steel features in the bilateral relationship. The framework moves beyond trade volumes and places steel within a wider agenda covering decarbonisation, standards alignment and steel-intensive downstream demand, Kallanish notes.

This agenda builds on the India-EU FTA announcement on 27 January, where the end-user steel outlook is expected to see an uplift, while near-term steel trade upside remains capped by CBAM constraints.

The new EU trade regime, expected to come into effect from 1 July, proposes no favourable treatment for FTA partners in quota negotiations. However, Commissioner Sefcovic implied India will get preferential treatment as a new FTA partner, indicating there are some tough negotiations ahead before the FTA comes into effect from 2027. Sources estimate a tariff-rate quota (TRQ) relaxation under the FTA may be “possible” by 30 June.

Direct steel trade impact remains limited. The strategic agenda does not alter CBAM or tariff treatment for steel. Instead, its relevance for the sector lies in regulatory convergence and long-term investment signals.

Steel is explicitly identified as a hard-to-abate, energy-intensive industry. Both sides have committed to cooperation on low-carbon material definitions, including steel, with the aim of creating comparable benchmarks and a level playing field. This is paired with experience-sharing between India’s Carbon Credit Trading Scheme (CCTS) and the EU Emissions Trading System (ETS).

This builds on earlier EU confirmation that any carbon price effectively paid in India under its CCTS would be deductible against CBAM liabilities, subject to alignment on pricing, timelines and verification frameworks. While this does not ease near-term export costs, it improves planning visibility for Indian producers investing in decarbonisation.

Hydrogen forms another core pillar. The India-EU Task Force on Green Hydrogen focuses on heavy industry applications, providing a technology bridge for hydrogen-based direct reduced iron and lower-emission steelmaking over the medium term.

The more immediate transmission channel is downstream end-user demand. Infrastructure and connectivity feature prominently, including the India-Middle East-Europe Economic Corridor. Rail cooperation, covering high-speed standards, automation and maintenance systems, supports long-term demand for steel rails, structural sections and specialised plate.

Maritime cooperation also carries steel implications. The agenda promotes a green shipbuilding ecosystem and green shipping corridors. Recognition of Indian ship recycling yards under EU-compliant frameworks is expected to support domestic scrap availability and circularity.

Energy transition initiatives add further support. Cooperation on wind energy, smart grids and energy storage is steel-intensive, lifting demand for heavy plate, electrical steel and more.

Defence manufacturing emerges as a growing end-user. Deeper industrial cooperation, co-development and localisation under the strategic partnership are likely to raise demand for alloy steel, special grades and precision forgings over time.

India-EU Strategic Agenda: steel-relevant markers

Sector/Driver	Strategic action point	Impact on Indian steel industry
Regulation	Low-carbon material definitions & CCTS/ETS alignment	Standardises “green steel” for global exports
Railways	High-speed rail standards & IMEC links	Drives demand for high-tensile and specialised rail steel
Maritime	Green shipbuilding ecosystem & ship recycling	Increases marine-grade demand and scrap availability
Energy	Wind energy scaling & Green Hydrogen Task Force	Transitions mills to H2-DRI and supports renewable infra
Innovation	Horizon Europe & advanced materials research	Supports R&D for next-generation steel alloys

Source: India external affairs ministry, Kallanish

The agenda deploys a multi-pronged financial strategy which could bridge the significant capital expenditure gap for India’s “green” steel transition.

An Investment Protection Agreement (IPA) anchors investor confidence with predictable standards, while the Team Europe Global Gateway and European Investment Bank may provide large-scale project funding. The Global Green Bonds Initiative and the Blue Valleys programme can also collectively ensure liquidity and accelerate private sector engagement in hard-to-abate sectors.

The strategic agenda thus amplifies the impact of the FTA by reframing steel exposure towards financing, inputs and standards.

 

 

Leonard spoke during the “Automotive and Construction Demand Outlook” panel at Fastmarkets’ Circular Steel Summit 2026 on Wednesday January 28 in Houston, Texas, offering a forward-looking assessment of the main demand drivers for steel.

Steel production and prices
Section 232 tariffs have supported US steel production, which increased through 2025 even amid subdued end-market demand, Leonard said, adding that this has come at the expense of output in other developed regions, particularly Europe.

Looking ahead, the firm expects US steel production growth to remain positive but muted, reflecting sluggish automotive demand and only selective strength in construction.

Steel prices have risen following recent tariff measures, but not to the same extent seen after the initial Section 232 tariffs in 2018. Leonard attributed this to weaker underlying demand conditions and greater cost absorption within supply chains.

“Compared with previous cycles, the demand environment today is fundamentally different,” Leonard said, adding that steel prices are expected to edge higher, but without sharp upside.

Automotive: Demand resilient but structurally constrained
Oxford Economics maintains a relatively bullish outlook for the US economy overall, with gross domestic product growth expected to outpace most other developed economies. But Leonard cautioned that this strength is narrowly concentrated in areas such as data centers and artificial intelligence (AI), rather than broad-based consumer demand.

In the automotive sector, fears that tariffs and inflation would significantly curb vehicle demand have not materialized so far. Leonard said that higher costs linked to tariffs have largely been absorbed by automakers and overseas suppliers, limiting the impact on final vehicle prices.

Oxford Economics estimates that roughly $20 billion in costs have been absorbed upstream in automotive supply chains, supporting demand in the short term. But Leonard warned that this dynamic is unsustainable and said price pressures could intensify if tariffs persist.

Automotive demand remains constrained by high financing costs, which have not fallen meaningfully despite a stabilization in the Federal Reserve’s policy rate. Vehicle affordability remains weaker than pre-pandemic levels, particularly as electric vehicle (EV) tax credits expire and interest costs stay elevated.

Looking ahead, Oxford Economics’ forecast for US automotive production through 2027 is flat, with total output growth of around 1% — well below historical norms. Any incremental growth is expected to come primarily from hybrid and electric vehicles.

Leonard highlighted that EVs, while lighter in steel share, actually contain more steel per unit on a weight basis due to heavier battery systems, creating limited but positive tailwinds for steel demand.

Construction: Cost pressures and uneven growth
Construction remains the largest single source of steel demand, accounting for roughly half of total consumption, Leonard said. But the outlook is mixed and uneven across segments.

Effective tariff rates on building materials remain elevated due to Section 232 tariffs on steel and additional duties on lumber imports, particularly from Canada. These material cost pressures, combined with persistent labor shortages, continue to weigh on project viability.

Structural labor tightness in construction has been exacerbated by demographic trends and immigration enforcement, Leonard said, further pushing up project costs and limiting new starts.

While residential construction is expected to recover modestly as long-term interest rates ease, growth is concentrated in less steel-intensive segments, such as single-family housing. High-rise residential construction — a more steel-intensive segment — is not expected to see meaningful growth, Leonard said.

Non-residential construction presents a more complex picture. Manufacturing-related construction surged following policy support such as the CHIPS and Science Act, driving strong steel demand in recent years. Meanwhile, traditional office construction remains structurally weak.

Leonard said that growth in commercial construction is now being driven almost entirely by data centers linked to AI and cloud computing. These projects are classified as office construction but differ significantly in structure and steel usage.

Energy and infrastructure support steel demand
The expansion of data centers is also driving strong demand for power generation and grid infrastructure, creating indirect but meaningful steel demand. Oxford Economics expects substantial investment in power generation capacity toward the end of the decade, although permitting constraints will slow deployment.

Transport infrastructure is another source of growth, supported by government spending programs.

At a regional level, Oxford Economics sees non-residential construction growth concentrated in states such as Pennsylvania, Nebraska and Louisiana, with other pockets of growth across the western US.

Spanish seamless tube supplier Tubos Reunidos (TR) is developing a seamless pipe capable of meeting the specific requirements of the hydrogen sector. As part of its participation in the H2SKID project, the company aims to support the expansion of “green” hydrogen use and industrial decarbonisation in Spain, Kallanish notes.

The project aims to develop a 1.25 MW experimental portable electrolyser, conceived as an enabling solution for the supply of green hydrogen to final industrial users. The initiative is being led by a Basque consortium including Tubos Reunidos, ArcelorMittal Sestao, Sarralle, ABC Compresores, Matz-Erreka, Flubetech Coatings, Mugape, Sener, Team Group, Torraval Cooling, and Zigor Corporación.

“Material performance in hydrogen environments is a critical factor in ensuring the safety, reliability and durability of industrial infrastructures, making this contribution essential to transforming technological innovation into solutions ready to operate under real conditions,” TR says. “Through initiatives such as this, the Group consolidates its role as a technological partner in the development of advanced industrial solutions that drive the energy transition and enhance the industrial competitiveness.”

The H2SKID project will validate the use of green hydrogen in a controlled environment in the ladle preheating burner and/or tunnel furnace area at ArcelorMittal Sestao.