In the first week of December, McCloskey attended and was one of the sponsors of the EUROMETAL Steel Trade Day, held in Dusseldorf, Germany.
As probably the last conference of the calendar year for members of the steel supply chain in the EU, this event has become an opportunity to take stock of the outgoing year and discuss trends that will shape the next year.
Unsurprisingly, this year’s event was dominated by the topic of structural changes to steel trade in Europe, namely by the Carbon Border Adjustment Mechanism (CBAM) and the trade of steel-containing goods.
The mood was far from festive, with presenters vividly describing the current state of the European market as an “existential crisis” and an “industrial death spiral”. The industry is largely seeking answers to this grave situation from legislators, asking for an expansion of trade protection barriers and measures to stimulate demand for low-emission steel.
Steel-containing goods trade: “the hidden threat driving Europe’s deindustrialisation”
Alexander Julius, president of EUROMETAL, raised this issue in his welcome speech, and the topic was addressed in three separate presentations. The steel industry’s view is that to guarantee a level playing field, EU trade protection measures must also cover steel derivatives – goods containing steel, such as prefabricated steel structures, appliances and machinery.
European manufacturers saw a decline in export sales partly because of competition from lower-cost suppliers such as China, India or Turkey, and also recently due to sanctions on trade with Russia and tariffs in the US, hitting demand for steel. At the same time, EU’s imports of steel-containing goods have surged, with China being the prime supplier. The solution, according to the event presenters, lies in extending trade protection barriers to final goods, but also in addressing the issues pushing up manufacturing costs in Europe, such as high energy prices and regulatory burden.
Steel trade: new era amid a “never seen level of uncertainty”
In his presentation, Yuriy Rudyuk, a partner at the legal firm Van Bael & Bellis, gave a run-through of some of the issues that the new regulation replacing safeguards will face.
One of the biggest questions is how European authorities will address inconsistencies arising from imposing quotas and tariffs on countries with whom the EU has free trade agreements and on what legal basis these new restrictions will be granted. The legislation also needs to pass through the European Parliament and be approved by the member states, meaning there are bound to be amendments and additions to the initial draft measures. After that, there will be the WTO consultation process, where WTO members will be able to claim compensation for lost trade access or impose retaliatory measures on the EU. One of the potential solutions discussed was the EU forming a coalition with like-minded trade partners to address issues of steel overcapacity.
And, of course, steel importers face a concurrent challenge emanating from CBAM introduction. On a question of whether the industry is ready for CBAM just three weeks before it comes into force, Gabriel Rozenberg, CEO of consultancy CBAMBOO, gave a firm “no”.
The fact that the market had to operate based on leaked documents has already led to contractual uncertainty and confusion over costs. Even if all CBAM-related documents are published by January 1, the complicated setup of CBAM means that important questions will remain unanswered for at least another year. For example, as McCloskey reported in November, emission levels at all installation will need to be verified by a physical site visit during 2026, and there are doubts that this is feasible.
Tayfun İşeri, representing Turkish industry association YISAD, commented that Turkish companies are unlikely to export to Europe during Q1 2026 until there is more clarity on the regulatory issues. They will try to find alternative outlets elsewhere, but that will not be easy, given the 50% duties in the US and high levels of competition in markets where trade barriers remain low.
Market participants also pointed out that current levels of risks meant that banks and insurance companies became very cautious, creating a liquidity crunch that will hurt smaller independent traders and distributors to a larger extent.
Outlook: “visibility is not there, it’s deep fog”
Closing the event, McCloskey’s Benjamin Steven moderated the final panel, asking where the European steel trading and distribution community sees the industry in five years’ time. The most damning verdict of the state of the industry was that none of the panellists was able to give an answer to this question. Panellists stated that the next 12 to 18 months will be crucial for the industry, and only then the market will be able to judge how it can move forward.
