As EU steelmaker associations celebrate the European Commission’s new safeguard proposal, long product buyers are beginning to question the potential impact on their segment. While most market participants agree flats prices are likely to rise sharply, many doubt the impact on longs as import quotas from several countries remain underutilised, Kallanish notes.
In key markets such as Italy, France, and Germany, imports of rebar and merchant bar from outside the EU are already very limited. European prices for long products are largely driven by competition among EU-based producers, rather than by external import pressure.
While the rebar market remains largely regional, with some flows between Italy, southern Germany, and France, the presence of Spanish merchant bar and sections in both Italy and France remains particularly strong. Certain low-priced products, such as rebar from outside the EU, reportedly do not possess the required European certification, making them non-compliant for sale or use within the EU market.
The Commission’s proposal is expected to substantially reduce import volumes across all products, with rebar and wire rod imports expected to fall each by some 40% and merchant bar and light sections by 55%.
However, exposure to imports varies by country. Italian and French longs buyers say that national import data should be reviewed before drawing conclusions. Both Italy and France reportedly do not experience significant distortions from long product imports originating outside Europe.
An Italian wire rod buyer suggests the new safeguard appears to be a “copy and paste” of the US tariff approach. Longs makers may be over optimistic when interpreting European data, which could lead to a temporary increase in prices that would quickly deflate in the current stagnant market.
While wire rod prices have occasionally been influenced by Algerian, Egyptian or Turkish material, recent protectionist measures have not prevented values from declining in both southern and northern Europe.
Another source in Italy considers the new safeguard as a temporary buffer, noting that the European Commission, having been delayed in clarifying the CBAM measure, may have chosen to adopt what amounts to a “copy and paste” of the US tariffs.
Eurofer pointed out last week that the new trade system comprises a WTO-compliant tariff-rate-quota system, unlike US 50% duties on all steel imports justified on unilateral national security grounds. This came after the Commission clarified that “upfront high duties” would have hurt EU downstream players. Some observers have nevertheless warned the new measure pushes the boundaries of WTO acceptance.
Natalia Capra France
