The agreement struck between the EU and US governments to abolish the trade barriers for steel introduced under Donald Trump will not mean massive increases in US-bound exports, consultant Andreas Schneider believes. There will not be a significant redirection of volumes from the domestic European market, contrary to some mills using this to justify recent price hikes, Kallanish hears from him.
As of 1 January, 3.5 million tonnes/year of European steel can be imported into the USA duty free, corresponding with the average volumes of 2015-17. In addition, exemptions negotiated under the Trump government will be extended until end-2023, which applies to a volume estimated at 1.1mt.
Despite penalty duties for EU-origin steel imports, trade to the US remained at a high level throughout the Trump years, with exports in 2021 already reaching two thirds of the agreed 3.5mt. Existing business relations and ongoing projects have been continued, by taking into account the extra 25% customs imposed, or by successfully reaching exemptions, Schneider points out. Also, the very favourable price levels in the USA encouraged the intake of EU material in 2021, he adds.
On the basis of current deliveries, the post-trade deal increase would be 500,000t for long products and 600,000t for flat products. This is less than 1% of European steel production, meaning the domestic European market will hardly suffer from volumes going abroad, Schneider concludes.
Christian Koehl Germany