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Chinese steel exports are expected to remain high in 2025, exerting continued pressure on global markets. Overcapacity is prompting certain third countries to seek alternative outlets, leading to increased import pressure on the European Union (EU), according to the European Commission's safeguard measure review.
EU Safeguard Measures Adjusted
Following a review initiated in December, the Commission confirmed adjustments to its safeguard measures, effective April 1. The review highlighted that imports from key steel-producing regions—ASEAN, India, China, the Middle East, and North Africa—remain elevated or have grown.
“The data showed a correlation between capacity developments and import pressure from these origins on the Union market,” the Commission stated. Overcapacity and trade defence measures, such as US tariffs, further justified the EU's safeguard adjustments.
Impact of Global Trade Policies
By the end of 2024, the number of global trade defence measures exceeded previous levels. Several countries, including Türkiye, Colombia, and Canada, increased tariff measures, while South Africa implemented safeguards on certain steel products. India also launched a safeguard investigation on flat steel.
The US imposed a 25% blanket steel tariff, which the Commission believes will heighten tensions in the steel markets and increase trade diversion risks into the EU.
Declining EU Capacity Utilization and Market Share
The Commission's investigation found that EU production capacity utilization for affected steel products dropped to 67% in 2023-2024, down from 78% in 2021. Long steel products experienced the sharpest decline, with utilization falling to 61.3% in 2024 from 74.7% in 2021.
Steel consumption in the EU declined by 14% in 2024 compared to 2021, reaching 143.9 million tonnes. Despite this, domestic sales' market share only slightly fell to 79% from 79.7% in 2021. However, Union industry profitability turned negative at -0.4% in 2024, a sharp contrast from 9.1% in 2021.
Rising Import Market Share and Affected Steel Categories
The import market share for flat steel products rose to 25.6% in 2024 from 24.8% in 2021, while long products remained at 12.8%. The share for tube products saw a marginal increase to 21.9%.
The Commission identified specific product categories facing the most import pressure:
- Category 1A: Hot rolled coil
- Category 4A: Metallic coated sheet
- Category 7: Plate
- Category 21: Hollow sections
- Category 24: Other seamless tube
Between 2021 and 2024, consumption fell by 27% in category 4A, 17% in categories 1A and 24, and 7% in categories 7 and 21. Import shares rose significantly across all these categories.
With global trade restrictions tightening and steel overcapacity persisting, the EU is set to face continued challenges in balancing domestic production with increasing import pressures.
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