The outlook for long steel consumption in 2025 and 2026 is positive, driven by growth in the construction sector and relatively low import penetration, except for wire rod, rebar and structural sections, Kallanish hears from a speaker at the the EUROMETAL Steel Net Forum Iberia in Vilamoura, Algarve.
Fernando Espada, chief executive of Layde Steel, part of Tata Steel Nederland’s distribution business, predicts that demand for flat steel will remain stagnant.
“Long steel consumption should recover alongside the increase in public infrastructure projects. Demand is expected to return to pre-Covid levels, particularly in Spain and Portugal, where the recovery has been significantly delayed,” says Espada.
According to Espada, whilst import penetration is generally higher across Europe, Spain and Portugal stand out as exceptions due to their strong long steel production.
“It’s like trying to sell Parma ham in a region where we already have Iberian ham,” remarks the executive, who is also vice president of EUROMETAL.
The situation for flat steel is quite different and even calling demand stagnant might be overly optimistic, according to Espada.
“The market is declining at an alarming rate. The level of import penetration in the coil segment is outrageous and is severely impacting flat steel. However, it’s not that total import volumes are skyrocketing, the real issue is that demand is disappearing. As a result, the same import volume represents an increasingly larger share of consumption,” he observes.
The executive argues that the industry should not focus solely on monitoring import volumes but should also implement measures to stimulate demand for domestically produced material, as steel suppliers are shifting market dynamics.
“With import restrictions on coils, suppliers are responding by importing the entire finished product instead, just as we see with steel structures used in the wind energy sector. These come pre-formed and welded, mainly from Asian countries,” he explains.
The automotive sector continues its recovery trend, although the penetration rate of electric vehicles is slowing. There is a noticeable increase in car imports from Asia, alongside a growing influx of component supplies.
“I’ve heard that some of the major automakers, in all their new models, have been setting targets of up to 50% imported parts. Why? Because steel is simply not competitive in Europe. And I believe that’s the real issue we need to address with the European Commission,” the executive comments.
He remains optimistic that the EC is beginning to recognise the need to protect not just consumers, but also manufacturers, similar to the delayed implementation of emissions penalties for internal combustion vehicle makers. “This is expected to stimulate the market and boost coil consumption, which in turn will drive higher demand, price recovery, and improved margins,” Espada notes.
The European Union’s trade protectionism is creating legal uncertainty, warns Espada.
“Receiving a notification from the European Commission in late May stating that a new tariff will be imposed by July 1, which suppliers were not expecting, has severe negative effects on their operations. Any changes to import regulations must be implemented carefully and gradually. We have requested that the EC grant a one-quarter adjustment period because the market needs time to adapt,” he explains.
Espada also urges caution regarding the introduction of the Carbon Border Adjustment Mechanism (CBAM), which, although promising in theory, could turn into a regulatory disaster in practice. “The European Commission is beginning to realise this risk,” he adds.
Participants in the Steel Net Forum Iberia agree that governments should support domestic steel suppliers in public infrastructure projects by offering a premium to those who can produce steel with lower CO₂ emissions.
“This would increase the value of local production over imports from countries that can compete with us on price alone. If you incentivise a market where lower CO₂ emissions are rewarded, supply will naturally increase to meet demand,” Espada concludes.
