The era of hyper-globalization in steel is over
A commodity analyst on the panel argued that the past two decades were an anomaly, driven largely by China’s explosive growth.
“China dominated world trade through ballooning exports,” he said. “But what’s changing is that growth is moderating. This feels like pre-2000. We’re going back to a collection of regionalized markets. The globalisation bit was just an anomaly.”
An economist, however, attributed the fragmentation not to market forces but to regulation.
“Fragmentation has been produced by lawmakers and politicians,” he said, pointing to Europe’s unique regulatory trajectory, particularly on climate policy. “We are starting to become something of an island because we want things to be done differently. That’s inevitable.”
A third panellist confirmed the shift from a commercial perspective, noting that purchasing decisions have fundamentally changed. “Previously, pricing was everything. Now, because of trade barriers and other measures, buying decisions are being elevated to the top-management level, making them more strategic,” he said, highlighting a growing focus on maintaining optionality and diversifying sourcing to improve supply-chain resilience.
Is China’s increasing steel export cyclical or structural?
A significant portion of the debate centered on China’s role, with its steel exports exceeding 100 million tonnes amid weakening domestic demand.
The commodity analyst described the move as structural, stating, “I’m a bear on China’s economy and China’s steel demand.”
He noted that China’s commodity intensity had peaked and that its steel industry is increasingly competing in global markets through initiatives such as the Belt and Road Initiative.
Adding context to the scale of the pressure, another panellist said: “China is exporting about 130 million tonnes a year. If we look at the world excluding China, consumption is about 900 million tonnes. China exports roughly 15% of the consumption of the rest of the world.”
Green steel: A new trade barrier and its unintended consequences
The discussion also turned to how trade barriers are evolving beyond traditional trade measures, with climate policy increasingly influencing competitiveness. The EU’s Carbon Border Adjustment Mechanism (CBAM) was a key point of contention.
The economist framed CBAM primarily as a climate measure, but acknowledged its industrial implications.
From a commercial standpoint, however, another panellist suggested the impact is becoming more “manageable.”
He explained: “It’s a new cost layer that customers are adapting to. Steel mills that want to export to Europe have to provide some data, and many companies are already collecting it. From my point of view, it will become a manageable measure sooner or later.”
The commodity analyst offered a more cautionary take, warning of a broader economic drag.
“It raises the cost of steel for European end-users. Their goods are probably going to be less competitive on a cost basis if they’re exporting to the world,” he said. “Unless they’re selling entirely within Europe, they have to compete with China anyway. So they’ve got to figure out how to adjust their costs across all other inputs to remain competitive.”
