Overcapacity and protectionist measures are exacerbating pressure on the European steel industry, Kallanish heard at the Steel Tech 2025 conference in Bilbao last week.
In recent years, China, along with Southeast Asia and North Africa, has significantly increased its installed capacity, while no answer has been found on how to contain the new volume within the countries where it is generated.
“The sector is witnessing a global increase in trade protectionism measures. Furthermore, the constant increase in capacity in certain regions and increasingly aggressive export behaviour are having an impact on the trading environment,” Enrique Arrieta, European Commission policy officer for trade and economic security, said at the event.
Currently, countries such as the United States, Canada, Mexico, Colombia, the United Kingdom, Turkey, India and Egypt have adopted protective measures to safeguard their markets. China is meanwhile attaining export records every year, resulting in the disruption of traditional markets.
One of the most illustrative cases is Vietnam, which in the last eight years has doubled its installed capacity from around 15 million tonnes/year to almost 30mt. “The problem arises because, given China’s aggressive export behaviour, the Asian country is not only flooding the Vietnamese market, but also displacing Vietnam from its traditional export destinations, such as Thailand or the United Arab Emirates,” the expert explained.
As a result, Vietnamese steel exports to the EU have increased by 70% since the pandemic, making the country the fourth largest steel supplier to Europe, a shift that occurred “very quickly”, according to the official.
A similar phenomenon can be observed in Japan, which, despite not having increased capacity in recent years, has redirected volumes to Europe after losing influence in key markets such as Indonesia, South Korea and Thailand, which are now dominated by Chinese steel. Japan went from exporting marginal quantities to the EU to shipping close to 2mt between 2023 and 2024.
“These trends are occurring while the EU maintains a quota-based system of safeguards, which limits its capacity to respond. The combination of third-country protectionism and the effects of global overcapacity are creating a very unsustainable situation for Europe,” Arrieta said. “Ideally, the problem of overcapacity should be addressed globally. But as the past has shown, this has not been possible. If overcapacity is not discussed, it is very difficult to attack its causes without punishing those who create the problem.”
The European Commission is open to the possibility of reopening the debate on overcapacity, intending to seek a global solution that reinforces the protection of European industries while minimising the impact on international supply chains, Arrieta confirmed.
Todor Kirkov Bulgaria
