Trade Measures to Dominate Steel Industry in 2025: Focus on Imports and Global Overcapacity

China Steel Factory

Trade protection measures have been the focal point of the global steel industry throughout 2024, with little indication of this trend slowing down in 2025. Steel producers, industry associations, and governments worldwide are increasingly advocating for stronger import barriers to safeguard domestic markets and improve the competitiveness of their industries. In particular, European steel mills have been at the forefront of this movement, calling for more robust action to combat what they view as unfair imports and growing overcapacity in the global market.

European Steel Industry Pushes for Stronger Import Protection

Eurofer, the industry association for European steel manufacturers, has been particularly vocal about the need for stronger trade defence instruments. The association has urged the European Union to implement short-term emergency measures, including import tariffication, to curb the influx of low-cost steel products. Eurofer's stance has been largely driven by the EU’s ambitious decarbonisation goals, with the bloc committing billions of euros in investment. Steel producers argue that the EU's current measures are insufficient, particularly in light of increasing steel imports from countries with lower production costs and fewer environmental regulations.

Significant progress has already been made, with Eurofer helping secure changes to the EU’s safeguard system for key products like hot-rolled coils (HRC) and wire rods. Additionally, the EU anti-dumping investigation targeting several HRC suppliers has gained traction, and further investigations are planned on downstream steel products. As European steel suppliers continue to collect evidence of unfair trade practices, more scrutiny is expected on countries like China, India, and Vietnam.

The Impact of Global Overcapacity and Chinese Steel Exports

The issue of global steel overcapacity has also been a major concern. The OECD has raised alarms about the growing steel production capacity, projecting a 158 million tonnes per year increase in global capacity between 2024 and 2026. This expansion, however, comes at a time when global steel demand remains uncertain. Despite this, steel exports from non-OECD countries have been recovering since 2023, particularly from China, whose steel exports surged by 22.6% from January to November 2024.

China has also been exporting record volumes of semi-finished steel, despite the country’s preference for exporting higher-value products. As China continues to ramp up exports, it has attracted the attention of both European and global policymakers, leading to new protectionist measures targeting Chinese steel. This includes potential investigations and pending duties on Chinese steel, which could affect up to 15 million tonnes per year of exports.

Countries like India, Vietnam, Indonesia, and Malaysia are also seeing increases in steel exports, contributing to the global capacity glut. Turkey, a major market for Chinese steel, has already imposed duties on imports from China, India, Russia, and Japan in response to the increasing influx of steel from these regions. The EU is similarly considering the inclusion of Indonesia in its safeguard measures due to the country’s rising steel exports to Europe. From July to October 2024, Indonesia exported 494,650 tonnes of HRC to the EU, surpassing the previous half-year period, a trend that is expected to continue.

Investigations and Measures Targeting Global Steel Exporters

The growing export volumes from India and Vietnam, along with the rise in Indonesia’s exports to Europe, have prompted investigations into dumping practices in these countries. The EU has already initiated anti-dumping investigations on steel products from Egypt, Japan, India, and Vietnam, with the preliminary results of these investigations expected in March 2025. If these investigations lead to findings of unfair trade practices, retroactive duties could be applied, further tightening global trade conditions.

In response, producers are gearing up for a potential wave of new safeguard measures and anti-dumping duties. Countries that are impacted by these measures may look to retaliate, creating a complex global trade landscape for steel. As trade protectionism increases, the global steel market is expected to undergo significant shifts in the coming years.