Recent safeguard measure adjustments and anti-dumping duties will reduce EU flat steel imports by 5-6 million tonnes/year. This encompasses hot and cold rolled coil, as well as coated flats, EU steelmaker sources tell Kallanish.
“We believe the market perception following the publication of the safeguard review may have been overly pessimistic, influenced by exceptionally high expectations. Because the document is very technical, market participants had the tendency to talk it down … When you read every detail and try to simulate what it means product by product, you end up realising this means several million tonnes of lower imports,” a European steelmaker says.
The steelmaker expresses optimism regarding the short to medium-term effects of the adjustments on the domestic market.
Several market participants initially expressed dissatisfaction with the safeguard review but are now realising its significance, the source continues.
“The EU communication is not [US President Donald] Trump’s style; they don’t say they will build a concrete wall and impose 25% for every tonne imported, but if we add up everything, we come to this significant 5-6 million tonnes figure,” the source explains.
Estimates from the steelmaker and a significant European coil buyer suggest some 3m t/y of HRC imports could be removed from the EU market as a result of the review.
Buyers are exploring alternative sources, including Indonesia, Malaysia, and Algeria. Multiple buyers, however, have reported the initial feedback regarding Indonesian material is unfavourable and the relationship with producers from these countries could be complex. “The good quality suppliers from Asia are already booked out for two quarters, so reliable material is no longer available,” the buyer says.
The steelmaker source acknowledges the safeguard document contains certain omissions that indicate potential counter-lobbying from various buyers, including Vietnam’s position and the reallocation of the Russian quota.
However, “overall, we think it’s effective, and we will feel the impact in the next months,” the source continues. He has observed a significant shift in tone and language within European Commission circles, indicating authorities’ intent to achieve “appropriate and effective protective measures and a highly effective level of protection”.
The Commission published its long-anticipated Steel and Metals Action Plan on 19 March.
“These words are there and are not there by coincidence … I find it very interesting that you see in the document a real action plan; they now have a timeline and actions which I have never seen in such a document. For instance, the circumvention [measure] has to be in action by the end of Q3 2025. This is a shift in attitude that gives us more confidence. They now have a real working plan with clear objectives. Certainly, we still have to work a lot to make sure they stay on track,” the source comments.
The “melted and poured” rule will also stop unfair practices, he adds.
“There are question marks about CBAM; it is unclear how the design will evolve and there are still a lot of flaws.” However, the Commission is looking to find practical solutions to the overly complex mechanism.
Customers have been used in recent years to procuring any product available with a short lead time at the lowest price, but “now this is changing. We are starting to get more enquiries and more pricing power because buyers do not have so many options. The few import origins available also have a long lead time and sometimes limited range,” the steelmaker believes.
He sees an increasing sense of optimism in the market, particularly emanating from Germany. The national infrastructure fund is poised to significantly influence steel demand, especially for long products and plate, which will likely yield a favourable effect on the overall market.
“It will have a multiplicator effect on the economy and that cannot be underestimated. I think the biggest news is that Germany has said the era of frugality is behind us, we understand what’s ahead of us … which is a huge political change. The country has decided to use its power and has all the financial means under the elbow required; this is the biggest thing for Europe,” the source concludes.
The European Commission’s steel safeguard measure review has resulted in new residual quota caps, the reduction of liberalisation rates and scrapping of quota carry-over, among other measures (see Kallanish passim). The Action Plan has so far promised to assess the melted and poured rule and consider proposing scrap export duties, as well as present a legislative proposal to amend CBAM in Q4, besides other proposals. However, numerous proposed measures are yet to be confirmed or detailed.
Natalia Capra France
