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| S&P Global Commodity Insights |
EU Steel Industry Faces Major Export Losses
The US government's decision to impose blanket 25% tariffs on all steel imports could lead to the loss of up to 3.7 million metric tons (mt) of EU steel exports to the US, according to Henrik Adam, President of Eurofer. The tariffs, set to take effect in early March, represent a radical escalation of previous trade policies and pose a severe threat to European steel producers.
The US is the second-largest export market for EU steel, accounting for 16% of total exports in 2024. EU steel shipments to the US peaked at 3.352 million mt in 2022, but have since declined to an estimated 2.688 million mt in 2024. The loss of a significant portion of these exports cannot be easily offset by diverting shipments to other markets, Adam warned.
Beyond direct losses, the diversion of 23 million mt of steel imports from third countries into the European market could further disrupt the industry. The global steel market is already experiencing an overcapacity crisis, with excess production rising from 514 million mt in 2019 to nearly 560 million mt in 2023. The EU steel sector, in contrast, has closed 9 million mt of capacity in 2024, leading to 18,000 job losses.
EU Responds with Countermeasures as Prices Rise
European Commission President Ursula von der Leyen has vowed to implement firm and proportionate countermeasures against the US tariffs. She emphasized that tariffs hurt businesses and consumers, while analysts warn of higher costs and potential demand destruction in the US market.
Despite concerns, US steel prices have risen sharply in response to the tariff news. The Platts US hot-rolled coil price has climbed from $690/mt on January 2 to $775/mt on February 10. Meanwhile, European hot-rolled coil prices ex-works Ruhr have increased by €32.50/mt since the start of 2025.
Industry analysts note that previous tariffs failed to boost US steel and aluminum production, with steel output declining by 1% and aluminum production falling by 10% compared to pre-2017 levels. The risk of a global trade war and prolonged inflationary pressures could further weigh on industrial metals markets.
