Category: Latest Updates

Global steel excess capacity is projected to surge to 745 million metric tons by 2028, worsening an overcapacity crisis that threatens the viability of market-oriented producers worldwide, according to the OECD Steel Outlook 2026, released June 4.

The forecast comes as global steelmaking capacity reached a record 2.445 billion mt in 2025—its fifth consecutive year of expansion—even as steel demand contracted for the fourth straight year. Excess capacity climbed to 640 million mt in 2025, already exceeding total OECD steel production by more than 200 million mt.

The widening gap between capacity and demand will push utilization rates down to 74% or lower by 2028, from 76% in 2025, intensifying financial pressure across the industry. Planned capacity additions of up to 138.8 million mt through 2028 represent a 5.7% increase from 2025 levels, with most expansion occurring outside the OECD area.

 

Demand stagnation

The capacity buildup is colliding with persistently weak demand. Global steel consumption declined 2.6% in 2025 and is projected to remain nearly flat in 2026, with growth averaging just 0.9% annually through 2030, reaching 1.89 billion mt.

China, the world’s largest steel consumer, saw demand plunge 6.9% in 2025 as its property sector downturn deepened. Chinese demand is expected to contract by another 0.6% in 2026 and continue to decline through 2030, the OECD said.

The weakness in China has triggered a massive export surge, with Chinese steelmakers shipping a record 131.2 million mt to foreign markets in 2025, up 13.8%, in contrast to the 6.2% decline in worldsteel exports. China’s exports have more than doubled during 2019-2025, and the country’s share of world exports has soared to 41% in 2025 from 19% in 2019. Association of Southeast Asian Nations (ASEAN) exporters also saw their exports more than double during 2019-2025, reaching 20.8 million mt in 2025.

India and Southeast Asia showed stronger growth prospects, with Indian demand rising 9.8% in 2025 and projected to grow 5.1% annually through 2030. Both regions, however, are also adding significant capacity, with India planning up to 31.8 million mt of new capacity by 2028 after adding 41.4 million mt during 2021-2025.

 

Subsidy distortions

The OECD report highlighted growing distortions from government subsidies, particularly in China. The median Chinese steel company received 15 times more subsidies relative to asset size than producers elsewhere in 2024, the report said.

Less-subsidized steel firms are losing market share to more heavily subsidized competitors, despite stronger financial performance, the OECD said.

Trade actions have intensified in response to import surges, with antidumping and countervailing duty investigations increasing globally. The OECD, however, warned of growing evidence of trade remedy circumvention and diversion.

The report also flagged rising export restrictions on steelmaking materials, particularly ferrous scrap, which are compounding pressure on raw material prices and threatening industry viability.

 

Author: Annalisa Villa

spglobal.com

European steel exports to the US have declined by one-third since the introduction of the US administration’s 50 percent steel tariffs, according to new data released by the European Steel Association (EUROFER).

The association reported that EU steel exports to the US fell by 34 percent year on year during the three quarters following the implementation of the tariffs on June 4, 2025. Export volumes declined from 2.93 million mt to 1.94 million mt over the period.

Tariffs continue to weigh on European steel sector

The 50 percent tariffs were introduced under the US Section 232 framework and were later expanded to cover a range of steel-intensive downstream products. According to EUROFER, steel and aluminum remain the only sectors still subject to the full 50 percent US tariff rate, with the measures continuing to affect both European steel producers and manufacturing supply chains.

The association stated that the sharp decline in exports demonstrates the ongoing impact of the tariffs on transatlantic steel trade.

EU-US trade agreement includes safeguard provisions

The figures were released shortly after EU member states approved legislation implementing the latest EU-US trade arrangement.

Under the agreement, the European Commission has the authority to suspend parts of the deal if the United States continues applying tariffs above 15% beyond the end of 2026 on steel- and aluminum-intensive derivative products that became subject to US tariffs after June 4, 2025.

The arrangement also foresees further discussions between Brussels and Washington regarding:

• tariff-rate quota (TRQ) solutions,
• steel and aluminum trade,
• cooperation to address global overcapacity.

EUROFER calls for permanent solution

Axel Eggert, general director of EUROFER, said the data clearly illustrates the impact of the tariffs on European exports and argued that market access issues remain unresolved one year after the measures took effect.

According to Eggert, both sides share an interest in maintaining strong transatlantic cooperation, but he stressed that balanced trading conditions have not yet been restored.

The Romanian long steel spot market has moved slightly lower this week, with traders gradually reducing prices after the sharp increases recorded in recent weeks.

Market participants indicate that overall demand remains subdued, despite ongoing activity from selected infrastructure and construction projects, while most buyers continue to limit purchases to immediate requirements. As a result, the higher price levels reached previously have become increasingly difficult to sustain, prompting retailers to adopt a more competitive pricing approach in an effort to stimulate sales. Meanwhile, sentiment in the import market remains cautious, with safeguard quota restrictions and CBAM-related uncertainties continuing to discourage buying interest. On the other hand, Romania’s sole domestic rebar producer, Beltrame Group, has maintained its offer levels despite the softer market conditions, although sources report limited sales activity and continued shortages of some commonly requested rebar dimensions.

Consequently, rebar spot prices in Romania have declined from €650-665/mt ex-warehouse last week to €635-640/mt ex-warehouse, while wire rod prices have softened from €690-700/mt to €685-690/mt ex-warehouse.

On the production side, Beltrame Group is still indicating rebar prices at around €640-650/mt ex-works.

Meanwhile, in the import segment, Romanian buyers remain largely quiet, with no significant non-EU transactions reported recently as buyers continue to act cautiously amid CBAM- and quota-related uncertainties, as well as weak demand. However, some buying activity was heard last week, with Romanian buyers sourcing material from nearby EU suppliers, particularly Bulgaria, benefiting from shorter lead times and easier procurement procedures. Meanwhile, Italian rebar offers have been heard at around €650-665/mt CFR. On the other hand, Greek suppliers have offered rebar at €655-665/mt CFR and wire rod at €665-675/mt CFR. Previously, their offers were reported at around €670-680/mt CFR for rebar and €660-670/mt CFR for wire rod. Meanwhile, on the non-EU side, offers from Egyptian suppliers have been heard at €545-550/mt CFR for rebar and €560-565/mt CFR for wire rod, down from €550-560/mt CFR for rebar and €560-570/mt CFR for wire rod last week. Turkish suppliers have, meanwhile, raised their rebar offers slightly to €535-545/mt CFR Romania, compared to €530-545/mt CFR heard last week, based on an exchange rate of €1 = $1.16 and estimated freight costs of €25-30/mt.

The Bulgarian longs market has shown mixed trends this week, with weaker domestic demand weighing on rebar prices, while wire rod values have remained relatively firm.

Market participants report that business activities have slowed amid growing financial uncertainty following recent political developments and the revision of several state funding programs. As a result, purchasing activity has remained cautious, with most buyers limiting orders to immediate requirements and avoiding significant restocking. Despite the subdued domestic market, some attractive offers have been observed in the import segment, particularly regarding EU-origin material. Sources indicate that Italian suppliers have become increasingly aggressive in their rebar pricing strategies, seeking to attract buyers in a market where overall consumption remains weak. In contrast, interest in non-EU imports continues to be limited, as safeguard quota restrictions and CBAM-related concerns discourage new bookings and reduce the competitiveness of import material.

Against this backdrop, workable rebar prices in Bulgaria have softened slightly and are currently reported at around €630-640/mt CPT, compared to €640-650/mt CPT recorded previously. The wire rod segment has, meanwhile, remained more resilient, supported by relatively balanced supply conditions and the absence of significant selling pressure. Current offers are reported at €680-700/mt CPT, up from €680-690/mt CPT, although most transactions continue to be concluded closer to €680-690/mt CPT.

In the import market, Turkish rebar offers are currently estimated at around $590-600/mt FOB. After accounting for freight costs of approximately €20-25/mt, these levels would translate to roughly €530-540/mt CFR Bulgaria, compared to €525-545/mt CFR heard a week earlier. Egyptian suppliers are, meanwhile, estimated to be offering rebar at around $600-610/mt FOB and wire rod at approximately $620-625/mt FOB. Based on prevailing freight rates of around €25-30/mt, these indications would correspond to approximately €535-550/mt CFR Bulgaria for rebar and €555-565/mt CFR Bulgaria for wire rod.

As for EU-origin material, Italian rebar offers have recently been heard at around €665/mt CPT Bulgaria. Meanwhile, Romanian rebar is estimated at approximately €660-670/mt delivered to Bulgaria, reflecting current domestic levels in Romania and transportation costs of roughly €30/mt. However, market participants indicate that workable levels around €20/mt lower may still be achievable in selected transactions.

Domestic steel heavy plate prices decreased in Italy in the week to Thursday June 4, reflecting weak demand for summer deliveries, while prices in Northern Europe remained stable amid slow trading, Fastmarkets was told.

Italy

Deals for steel heavy plate in Italy were reported in the range of €730-750 ($849-873) per tonne ex-works on June 4, unchanged from bookings heard a week earlier.

Market sources said that offers were at heard €730-760 per tonne, slightly lower than previous pffers at €740-760 per tonne ex-works, with the lower end reflecting competition for commodity-grade volumes.

“Demand is limited. There is no rush on the distributors’ side to book for July and August delivery. Their sales from stocks are also limited,” a producer said on Thursday, adding that other suppliers “compete a lot on all levels.”

“I do not see a sudden resolution for July-August, we’ll most probably be conditioned by the demand, and no price strength is in sight,” the producer added.

A trader source also noted that trading was still subdued, and insufficient to fill mills’ summer order books, “leading market participants to expect extended maintenance shutdowns during July and August.”

Fastmarkets’ weekly price assessment for steel domestic plate 8-40mm, exw Southern Europe, was €730-750 per tonne on Thursday, narrowing downward from €730-755 pert tonne a week earlier.

Northern Europe

Offers of heavy plate in Germany were heard in the range of €800-850 per tonne ex-works. The lower end around €800-820 per tonne ex-works was linked to material delivered to Belgium, Italy and France, a producer said.

Indications were reported within the range of €830-850 per tonne ex-works, but no significant trading was heard during the week.

The producer said that some deals for German plate at €790-800 per tonne ex-works had been concluded, also for deliveries to Belgium, Italy and France, but some of these destinations fall outside the Northern Europe assessment scope.

“We did not see any competing offers from German mills. These are the prices confirmed from Italy, Belgium and France by re-rollers,” the producer said on Thursday. “I would not exclude that Germans prices [are] higher but they are not really visible in [the] daily spot commodity market.”

A distributor said that the cost of freight from Italy to Germany was quite high, making Italian plate less competitive in Northern Europe. “You can get cheaper plate in Germany, Denmark and Belgium,” the source said.

The distributor added that prices were mostly stable, but mills were “not so satisfied” with booked volumes and were expecting more orders. “Order books are low, especially in Germany, because stockholders are not buying much because of the [seasonal lull in] summer,” the source said.

Meanwhile, a trader noted that demand in Germany remained weak, partly due to delays to wind-energy projects. “While the defense sector continues to generate solid demand, competition for these volumes is intense and has not been sufficient to alter the overall market trend,” the source added.

Fastmarkets’ weekly price assessment for steel domestic plate 8-40mm, exw Northern Europe, was €800-850 per tonne on Thursday, unchanged week on week.

 

The World Stainless Association (worldstainless) has elected Bernardo Velázquez, executive of the Acerinox Group, as its new chairman during the organisation’s 30th annual conference in Johannesburg, South Africa, Kallanish notes.

Yosuke Sakai, the executive officer and head of Stainless Steel & Titanium unit of Nippon Steel Corp, Sudhakar Sivaji, chief executive of Aperam, and Lee Jieun, head of Posco’s marketing, have been elected as vice chairmen. The ceo of Swiss Steel Group, Frank Koch, will serve as treasurer.

The Board includes an additional six representatives from China Baowu Tisco, Acerinox Europa, Daido Steel, JFE Steel and North American Stainless.

Tim Collins continues in his role as secretary-general of worldstainless, while Edwin Basson, the director general of the World Steel Association, remains an ex officio member of the board.

Italian re-roller Padana Tubi is creating two dedicated business units to strengthen its commercial operations.

The new stainless steel business unit will be led by Luca Cavallari, while the carbon steel division will be jointly managed by Giorgia Benetti and Marco Fornasari, the company says in a note obtained by Kallanish.

The reorganisation will be “strengthening our strategic focus and commercial specialisation,” the note says. It will enable integrated end-to-end management of commercial activities, with greater focus on customers, markets and results.

In May, UK-based investment firm Attestor completed its acquisition of the firm, appointing Mariano Armengol as chief executive and announcing a new board of directors.

The new governance structure coincides with Attestor’s entry as Padana Tubi’s majority shareholder (see Kallanish passim).

In the last financial year, Padana Tubi achieved a turnover of €900 million ($1 billion) and employs 800 workers.

Global excess steelmaking capacity is projected to reach 745 million tonnes by 2028, as planned capacity growth of 5.7% continues to outpace demand growth of just 0.9% annually, according to the Organisation for Economic Co-operation and Development’s (OECD) Steel Outlook 2026, monitored by Kallanish.

The figure would exceed current OECD steel production by 319mt and approach the peak levels seen during the last global steel crisis.

Subsidies and other non-market policies continue to drive excess capacity and distort competition. In 2024, the median Chinese steel producer received support equivalent to 15 times that of producers elsewhere relative to asset size. Chinese steel exports reached a record 131mt in 2025, exceeding the European Union’s total steel production that year, as weak domestic demand pushed producers to seek export markets.

Following antidumping and countervailing duty actions against Chinese steel products, exports of the same products from China to Southeast Asia increased, while shipments of those products from Southeast Asian countries to OECD markets rose. The OECD says these trends point to growing concerns over trade diversion and the circumvention of trade measures.

China’s semi-finished steel exports to Southeast Asia surged 300% in 2025, suggesting that material may be processed in third countries before being re-exported to markets where trade restrictions are in place.

The OECD warns that excess capacity is eroding the competitiveness of market-oriented producers, depressing prices and keeping capacity utilisation rates at unsustainable levels. Global utilisation rates could fall from 76% in 2025 to 74% or lower by 2028, intensifying financial pressure across the industry. The organisation further cautions that excess capacity is delaying investment in lower-emission steelmaking technologies and has already contributed to the postponement of several decarbonisation projects worldwide.

Additional pressures stem from rising energy costs, supply chain disruptions, growing raw material constraints and expanding export restrictions. Scrap exports are now restricted by 42 countries, while controls on chromium and nickel ores are becoming common, adding further uncertainty for steelmakers.

The UK Department for Business & Trade has announced changes to the soon-to-be introduced tariff rate quotas on steel imports, Kallanish learns.

The time-limited transitional arrangement means that relevant goods under contract before 14 March will be fully exempt from 50% out-of-quota duty between 1 July and 30 September. The new steel tariffs will not apply to goods imported into the UK between the above-mentioned dates or imported in satisfaction of an obligation under a contract entered into before 14 March. For the latter part of the arrangement, this includes goods released to the UK market from a customs warehouse between the same dates.

The department adds that goods that make use of this transitional exemption will not count towards quota allocations for the first quarter. To access this, traders must hold verifiable evidence demonstrating that the consignment was ordered before the cut-off date.

One trader expresses concerns that some market participants could try to circumvent the rules with faked documents in a bid to avoid the duties. However, for those who do not break the rules, there are indirect benefits as this would free up some quota availability and potentially reduce their duty burden by up to £400,000 ($537,956) across its vessels.

The trader expresses annoyance over this rule being announced just 27 days before implementation but acknowledges this will apply only for one quarter, limiting the impact.

An HM Revenue & Customs spokesperson tells Kallanish: “We take customs compliance very seriously and have robust processes in place to tackle fraud. Traders must retain supporting evidence for their declarations and provide it when requested.”

This comes as calls have grown for revisions to be made to the proposed changes over concerns on availability and price. Additionally, the new trade measure will not apply to steel goods originating in Ukraine. The UK government says this reflects the country’s “continued support in light of Russia’s ongoing invasion”.

Instead, existing preferential tariff arrangements for UK-Ukraine trade in steel will remain in place, as set out in the Political, Free Trade and Strategic Partnership Agreement with Ukraine.

A fire at Tata Steel’s UK site in Port Talbot has damaged some of its operations, Kallanish learns.

The Mid and West Wales Fire Service attended the site on Wednesday evening at around 20:00 to deal with a fire at one of the site’s processing lines. As of 07:00 local time Thursday, the emergency services remained on site and were working with local teams to completely extinguish the fire, a Tata Steel spokesperson states.

The fire service retains control of the area of the cold mill where the fire first took place, an updated Tata Steel statement says.

The steelmaker adds: “We are therefore currently unable to assess the cause of the fire, the scale of the damage or the potential impact on operations. Nevertheless, the company is investigating a number of options in order to minimise the potential impact on its downstream businesses and external customers.”

Tata notes that the fire was restricted to a confined area. While the site’s hot rolling mill was paused as a precaution, it was unaffected and is expected to re-start production shortly.

All personnel have been accounted for and evacuated from the area safely.

Tata says the incident is not related to the safe and successful demolition of the empty, redundant gas holder earlier yesterday evening.

In a statement, Sharon Graham, general secretary of workers union Unite, says that the fire has caused “substantial damage to a vital production line”. She is calling for Tata and the government to ensure that operations are rebuilt as swiftly as possible and that jobs are protected during any period of disruption.

Photo Credit: Mid and West Wales Fire and Rescue Service

Author: Carrie Bone

kallanish.com