Assofermet: steel demand-boosting measures needed in EU amid declining demand
Italian distributor and service center association Assofermet called May 13 for action to stimulate steel consumption across the European Union, as demand declines due to intense global competition and the urgent need for the industry to transition towards decarbonization.
“The EU steel Industry … is certainly experiencing one of the most significant historical moments due to the continuous growth of new generation sites in third countries capable of producing steel at lower cost … and is facing epochal challenges of transformation towards decarbonization that, not only should be recognized, but should be supported and backed by the European Commission with effective, rapid and concrete measures,” Assofermet said in a statement.
European manufacturers are finding it increasingly difficult to maintain their market position and produce steel at competitive prices, in particular with new generation steel production sites emerging in third countries. The decline not only threatens the steel industry itself but also jeopardizes the entire supply chain, including key sectors such as automotive, construction and infrastructure.
While the organization welcomed the EC’s Steel and Metals Action Plan as a necessary and important document signaling that Europe is ready to act to protect strategically important industries, it proposed several targeted measures aimed at boosting demand, including tax credits, non-repayable loans, and reduced VAT rates for steel products.
Echoing steel producers Assofermet advocated for the extension of the Carbon Border Adjustment Mechanism to cover certain steel-intensive finished products, which would help level the playing field for EU manufacturers against cheaper imports as well as introducing an obligation to favor the use of machinery, vehicles and products with high steel content produced in the EU in the bloc’s public procurement tenders.
Assofermet underlined the crucial role of end-users, as stimulating demand in sectors that rely heavily on steel would not only support Europe’s manufacturing base but also foster its economic growth.
In its proposal, the trade body outlined the need for a robust domestic supply chain, especially highlighted during crises like the COVID-19 pandemic, when the EU relied on imports to meet demand.
Platts assessed the southern European domestic hot-rolled coil price at Eur620/mt ($690/mt) EXW Italy on May 12, stable over the day.
EU steel consumption was expected to decline by 2.3% year on year in 2024 to 127 million mt due to the recession in the two major steel-consuming sectors, namely construction and automotive, European steel association Eurofer said in its latest report published in February.
EU protectionism to impact Italian quality coil procurement
Increasing European import restrictions pose a risk to the availability of specific coil grades and sizes that are not widely manufactured in Europe, Riccardo Benso, chief executive of coil service centre Albasider, told Kallanish during the Made in Steel tradeshow in Milan last week.
Certain high-quality products in Europe are priced at a premium and face limited availability. There are concerns regarding the willingness and capability of European mills to provide specific dimensions and qualities to small to mid-sized buyers.
“The rules imposed from above do not align with the needs of our complicated economic system. I’m concerned about the potential detrimental impact on quality,” said Benso, who is also a former president of Italian steel trade association Assofermet. “We had been around the world to select [coils] from the best origins; we formed partnerships that will have to be rethought, and now we will have to spend a lot of time researching new origins.”
“It is not certain that all new origins will offer the quality that our customers demand and, therefore, in my opinion, there will be an issue linked to the offer of high-end products that could, in any case, generate some perplexity among customers, some issues for the European industrial system,” he continued. “If Europe wants to be competitive on global markets, knowing that it has higher costs, it must in any case offer a product that has added value.”
Benso anticipates a transitional period will be required to adapt to the emerging protectionist landscape; however, he asserts that the downstream supply chain will implement appropriate countermeasures and successfully maintain equivalent quality standards.
The European Commission is currently revising the Carbon Border Adjustment Mechanism (CBAM). However, there is a significant risk the new framework may overlook the implications for Europe’s downstream and manufacturing sectors.
“Europe is a strong exporter … We excel at creating outstanding products and selling them, even if they are slightly pricier than others. We have to preserve our extraordinary ability to offer our products in global markets … We must pay attention to competitiveness variables, so we must not design a tool, CBAM, that only protects the upstream supply chain,” Benso noted.
Assofermet’s engagement with Europe and other steelmakers in the supply chain has improved, with collaboration beneficial to all parties. At the same time, the international trade war and the danger of US President Donald Trump’s tariffs are gradually easing.
“I am convinced that for him [Trump], the game has only just begun, and he will use it to bring as many parties as possible to the negotiating table. He has a strong vision for his country. During his presidency, he intends to do everything possible to restore the United States’ position, including an industrial one. I believe he has significantly underestimated the time and challenges associated with industrial restructuring that are required in the long run, to reallocate specific production once it has been dismantled and transferred,” Benso said.
He expects the market to require a period to absorb the existing overcapacity. The service centre sector is notably well-stocked. The current market conditions indicate an oversupply primarily in commodity grades; however, mills are reporting extended lead times for quality products and specific dimensions.
Despite subdued interest from service centres in acquiring coils, there are indications of a modest uptick in demand. Although automotive production remains subdued, the industry saw some improvement in the first quarter as car sales rose. Car component makers slightly increased their orders in Q1.
Benso anticipates a rebound in consumption in the upcoming year, with indications of a potential return of downstream demand emerging around September or October, following the summer period.
Natalia Capra France
Assofermet urges EU to support steel consumption and entire value chain
Assofermet, the association representing Italian distributors of scrap, raw materials, and steel products has welcomed the European Union’s Action Plan on Steel and Metals, viewing it as an important signal in support of strategic industries. However, in a statement released this week, the association criticized the document for its lack of concreteness and detail, deeming it insufficient to resolve the deep crisis affecting the European steel industry, the primary cause of which is identified as the drastic decline in domestic steel demand.
According to Assofermet, the current plan focuses excessively on production, while entirely neglecting the downstream supply chain – comprising trade, distribution, processing, and end-use of steel – which constitutes the most extensive and strategic part of the industry. The entire European manufacturing sector, which heavily relies on steel, is now severely weakened by offshoring to third countries and by foreign competition, both in terms of price and quality, Assofermet said.
The transition of the sector toward decarbonization is recognized as necessary, but it must be accompanied by effective and immediate measures, the association argues. Assofermet highlights that companies in the supply chain, often SMEs (small and medium-sized enterprises), played a crucial role in ensuring steel supply during the post-Covid crisis, compensating for domestic shortages through imports from non-EU countries.
Assofermet therefore proposes a series of economic and fiscal measures to stimulate domestic steel demand and strengthen the entire industrial value chain, with the goal of preventing further declines in production and employment. These include:
- Tax credits for replacing obsolete machinery and equipment with new ones that have a high steel content.
- Non-repayable grants and low-interest loans for investments in plants and equipment by SMEs.
- Capital, operating, plant and interest subsidies to support the activities of businesses involved in steel usage.
Additionally, Assofermet calls for:
- The introduction of targeted tax incentives and a reduced VAT rate for products with a high content of steel produced in the EU.
- The inclusion of clauses in public procurement tenders that favor the use of EU-origin steel.
- The extension of the Carbon Border Adjustment Mechanism (CBAM) to certain finished products with high steel content.
- Protective trade measures against imports of steel-intensive goods from third countries.
Assofermet also considers it essential to implement a three-year emergency economic plan to revive European manufacturing and structurally stimulate steel consumption, in line with the EU budget resource use guidelines proposed by Mario Draghi.
The association identifies several priority sectors to be relaunched in order to boost demand: automotive, transport, construction, infrastructure, energy, mechanical engineering, home appliances, chemicals, and the food industry.
Finally, Assofermet warns that the current weakness in domestic demand, combined with shrinking distribution margins and excess production capacity, risks triggering a serious slowdown in EU manufacturing, transforming companies into mere importers and sparking a new wave of industrial offshoring.
Hence, the association makes an urgent appeal for coordinated industrial policies capable of reactivating internal demand, strengthening competitiveness, and opening a new phase of economic expansion for the entire European steel supply chain.
Assofermet: Italian steel market’s weak recovery in March disrupted by tariffs
March and the first days of April were characterized by strong uncertainty in the Italian steel market due to the introduction of import tariffs by the US. This is what emerges from the monthly analysis of Assofermet Acciai, the steel division of Assofermet, the association representing Italian distributors of scrap, raw materials, and steel products.
Starting from flat products, Assofermet described an uptrend in March. The slight recovery of consumption, however, has been jeopardized by the possible outcome of a global trade war. Moreover, new EU safeguard policies – which hamper steel inflow into the territory – may divert import volumes, hence generating possible price increases. “Since they are dealing with low demand, we have yet to understand if finished steel users will be able to support such rises without losing competitiveness in the international market,” Assofermet stated. End-users’ sales volumes, in fact, are still suffering from the automotive and white goods crisis, and there are no signs of a possible recovery in the month of April.
In the stainless steel segment, both longs and flat products are experiencing low levels of demand. Offers, however, are still abundant and this keeps prices under pressure. Nonetheless, Assofermet reports weak signals of stabilization, which could suggest a gradual rebalance. The scenario is rather complicated, Assofermet concluded, but “it offers some ease for those who will be able to be resilient to the market’s evolutions”.
As for warehouses, March recorded a negative performance overall, with the exception of seamless pipes. Steel sheets, on the other hand, seem to be the most affected category. The prospects, unfortunately, are not bright: with the introduction of new tariffs by the United States, some sectors such as mechanics could decide to revise their investment plans by reducing the volumes purchased in the face of a foreseeable drop in turnover due to the reduction in exports.
Finally, in the tinplate segment, there was a recovery in demand in Europe due to the introduction of a 20 percent cap for each country in the “Other Countries” quota. “Some tin coating plants, which remained inactive throughout last year, are gradually returning to full operation,” Assofermet reported.
Assofermet sees slight recovery in March long volumes
There have been signs of recovery in the volumes of merchant bars products and sections in recent weeks due to new construction projects commencing in March with the start of favourable weather conditions, Italian trade association Assofermet says in a market note seen by Kallanish.
Conversely, last month flat products experienced a modest downturn in both volumes and pricing.
“We are witnessing a market downstream that, due to global geopolitical tensions, is struggling to recover,” the note states.
It adds that in February, the automotive, household appliance and construction sectors recorded a sharp slowdown. However, in March there were timid signs of recovery, fuelled by the interest of several companies in covering their flat needs for the coming months with scheduled supplies.
“We look with great interest at the strategic dialogue on steel recently promoted by the EU Commission and we hope to be able to give our contribution as representatives of the pre-processing and distribution sectors on the national territory. We really hope that attention will also be focused on the problems of EU manufacturing, because without orders from it the steel industry is also destined to collapse,” Assofermet warns.
“Effective countermeasures to the ongoing industrial delocalisation must be adopted as soon as possible, with measures to stimulate demand, while slowing down the unbridled rush to green production, extending deadlines and reviewing programmes,” it adds.
In a recently released position paper on US president Donald Trump’s enhanced protectionist policies the association warned that the trade war could potentially lead to significant market distortions for Europe. The execution of US policies is expected to lead to an redirection of global steel exports to the European Union, potentially prompting the bloc to consider countermeasures aimed at Asian countries.
Assofermet proposes rethinking the existing EU protection mechanism and extending it downstream. Currently, Europe is focusing its defensive strategies solely on safeguarding the upstream segment of the supply chain.
Natalia Capra France
Assofermet: EU should extend safeguards to downstream market
The trade war initiated by the Trump administration could potentially lead to significant market distortions for Europe, Italian steel trade association Assofermet states in its recently released position paper on US president Donald Trump’s enhanced protectionist policies.
The report obtained by Kallanish expresses concerns about the potential short, medium, and long-term effects of the US’s protectionist stance. The execution of US policies is expected to lead to an important redirection of global steel exports to the European Union, potentially prompting the EU to consider countermeasures aimed at Asian countries.
“A similar scenario, which already occurred in 2018, could have particularly serious consequences, since the delicate European economic balance is no longer able to sustain further [domestic] price increases, without risking a further and irreversible loss of competitiveness,” Assofermet warns.
“The part of the economy most at risk is therefore… the EU manufacturing industry that regularly uses steel… in its production. If we continue to protect only the upstream sector, triggering inflationary scenarios…we will continue to destroy the domestic EU market demand as well as exports of EU finished products,” it adds.
It proposes rethinking the existing protection mechanism and extending it downstream. Currently, Europe is focusing its defensive strategies solely on safeguarding the upstream segment of the supply chain.
The US ranks as the second largest export market for European steel producers, representing 16% of total steel exports in 2024. Europe primarily exports premium steel products to the United States that are not produced on the American soil, distinguished by very high costs and performance.
“Consequently, the application of import duties could be easily absorbed by the importer,” the paper suggests.
The ramifications of these tariffs on Europe may result in a notable reduction in EU exports to the US. This could subsequently diminish the demand for raw materials such as scrap and pig iron from mills that might face challenges in finding alternative export markets.
Production levels in the EU are anticipated to decline and the region may need to extend its safeguard measures and anti-dumping duties on imports from the US. The cessation of steel exports from non-EU countries to the US could result in a substantial influx of these materials into the EU, which may lead to considerable market distortions.
In reaction to the US tariffs, it is also plausible that some steel manufacturers in the EU will consider relocating their production operations to the United States.
Natalia Capra France
Assofermet: new US tariffs threaten EU Steel Industry and market stability
Italian steel trade association Assofermet has expressed concerns following US President Trump’s announcement to impose 25% tariffs on steel and aluminum imports as of March 12, 2025.
Assofermet emphasized that the US tariffs could seriously threaten the European Union (EU) steel industry. The US is the second largest export market for EU steel producers, accounting for 16% of total steel exports in 2024. However, the new tariffs could lead to a drop in production in the EU steel and aluminum sector and domestic demand may be insufficient to cover this gap.
The Association also pointed to the risk of shifting steel flows from Asian countries to the EU market. “Our main concern is the possible domino effect of the new tariffs against Asian countries,” Assofermet stated, adding that this could lead to an increase in prices and a decrease in the competitiveness of the European steel industry. On the other hand, some EU steel producers have already started direct production in the US to overcome the tariffs.
Assofermet mentioned the possibility of the US administration imposing reciprocal tariffs on countries that impose trade barriers against the US, which could further complicate trade relations between the EU and the US. This situation could also slow down the EU’s green transformation process. Industry representatives emphasized that the EU should keep domestic demand alive by taking more comprehensive measures instead of only protecting the production phase.
Industry representatives underlined that the EU should take more comprehensive measures to protect the domestic market. If the measures are aimed only at the production phase, production assets in Europe may be damaged due to high costs and competitiveness may be lost in the long run.
EU protectionism to weaken entire value chain
According to Italian flat steel processors, a turn on the screw on the current protectionist measures are likely to bolster European steelmakers’ price increases; however, this trend is unsustainable without a resurgence in downstream consumption, multiple sources tell Kallanish.
All eyes are on the implications of the recent European Steel Association (Eurofer) proposals submitted to the European Commission regarding the enhancement of safeguard and other protectionist measures.
“In addition to other demands, Eurofer is suggesting halving the safeguard quotas. If their requests are accepted, it would represent a significant setback for the European manufacturing sector,” states a representative from the Italian trade association Assofermet. “We are collaborating with the politicians representing us in Europe to ensure that EU officials take into account the potential impact on manufacturing. Steel consumers are likely to scale back their capacities as they will struggle to keep up with the accelerating price increases in Europe. A boomerang effect is likely to affect European producers if the EU complies with all of Eurofer’s requests. They may enjoy high prices in the future, but since this will destroy the manufacturing sector, orders will be reduced. This is what happens when only one area of the industry is protected.”
Assofermet is advocating for the European Commission to archive the existing safeguard measures and refrain from extending them beyond 31 December 2025. This is to avoid any overlap with the Carbon Border Adjustment Mechanism (CBAM), which could result in further cost increases for the EU steel processing sector (see separate article).
A large re-roller expects that Eurofer demands will be granted and is implementing price increases in line with hiking hot rolled coil prices.
A mid-size service centre also notes widespread apprehension that demands will be granted.
“This will lead to a significant decline in imports, resulting in a substantial loss of competitiveness for both service centres and our clients,” he comments.
Amidst the ongoing review of EU steel import safeguard measures, Eurofer has provided recommendations to the European Commission on making the measures more restrictive, according to Yuriy Rudyuk, partner at Van Bael & Bellis. Eurofer is proposing reducing tariff-rate quota volumes to reflect declining EU steel demand, raising the safeguard duty to 32-41%. It is capping quotas for other product categories at 15%, as was done from July for HRC and wire rod, Rudyuk indicates in a LinkedIn post.
The association has suggested removing the carry-over option and replacing residual quotas with country-specific ones. It also advocates halting new exemptions for developing countries in the final year of the measures (see Kallanish passim).
Natalia Capra France
Assofermet asks EU not to extend safeguard measures
Italian steel trade association Assofermet is advocating for the European Commission to archive the existing safeguard measures and refrain from extending them beyond 31 December 2025.
This is to avoid any overlap with the Carbon Border Adjustment Mechanism (CBAM), which could result in further cost increases for the EU steel processing sector.
In a statement obtained by Kallanish, the association indicates that any modifications to the safeguard system should ensure that the current level of import liberalisation remains intact.
The EC should eliminate the country-specific quotas and replace them with a singular global share for each product category. To optimise the utilisation of quotas, Assofermet also recommends the implementation of a more flexible management system that permits the redistribution of unused quotas between nations at the conclusion of each quarter.
The prospect for extending or intensifying safeguard measures on imports fails to address the structural issues present in the European steel market. The ongoing lack in demand from end-user sectors cannot be resolved by additional import restrictions, the statement argues and adds that it is essential to encourage demand growth through broad economic policies, rather than relying solely on trade defence measures.
The EU steel processing sector has suffered as a result of the present safeguard in place since July 2018. The sector is facing significant challenges due to rising costs, restrictions on duty-free steel imports, and the influx of low-cost finished products from non-EU countries.
Any further safeguard revisions would introduce additional uncertainties into the entire system and supply chain.
In accordance with current EU legislation and World Trade Organisation regulations, Assofermet proposes that the safeguard legislative framework be restored to its original purpose and encourages the EC to prioritise structural solutions that boost demand and competitiveness within the European steel industry.
Last year the EC initiated an investigation to determine whether EU safeguard measures on steel imports need amending to reflect recent market developments, following a request by 13 Member States.
Natalia Capra France
Slow start to 2025 adds more uncertainty: Assofermet
January has reflected the market slackness that existed before the year-end production halts, Italian trade association Assofermet says in a market note seen by Kallanish.
In Asia, despite the weakness of the Chinese steel market, few production stoppages have happened, while India ended November with a 5.8% on-year production increase. These elevated production levels in Asia represent a significant area of concern for the global steel sector.
In response to higher production costs, European steelmakers have announced price hikes on finished longs and flats, even in the face of subdued demand, particularly from the white goods and automotive sectors. The recent coil increases are supported by the diminished interest in importing material from third countries, attributed to restrictive safeguards, anti-dumping, and anti-subsidy measures.
Market participants are closely monitoring the initial actions of the newly elected US president, Donald Trump, who has repeatedly indicated intentions to enhance customs barriers as a means of safeguarding the domestic market.
“The ghost of US tariffs promised by the next occupant of the White House significantly undermines the prospects for this first quarter… Furthermore, there is great interest in the future of Acciaierie d’Italia for which the appointed Commissioners have received purchase proposals from foreign groups and national consortiums in recent days,” the note states.
In 2024 flat products experienced the most substantial declines in volume, whereas long products observed a more pronounced decrease in average pricing. Uncertainty continues to loom over Europe, especially concerning the outlook for significant economies such as France and Germany, Assofermet concludes.
Natalia Capra France