EU steel producers feel impact of US tariffs

US tariffs on steel have ‘dealt a severe blow’ to hopes of a recovery in the European steel market, according to producers.

The European Steel Association (Eurofer) says the general economic situation remains weak, affecting both steel demand and consumption. Any recovery is not expected until next year.

The new 50% tariffs imposed by President Trump on 4 June are seen as a further blow to an already weak European steel market. Axel Eggert, Eurofer dg, says: ‘External factors such as global overcapacity, high energy prices and geopolitical tensions, continue to affect EU producers, who can no longer bear this situation and are left with no choice but close capacity, lay off workers and halt decarbonisation projects.’

Emergency call

Eurofer is calling on the European Commission to consider emergency trade actions to safeguard the stability of the EU steel market should EU-US trade negotiations fail.

According to Eurofer’s latest Economic and Steel Market Outlook, the recession in apparent steel consumption will continue in 2025 for the fourth consecutive year, the decline of 0.9% contrasting with earlier forecasts of around 2.2% growth. A similar trend is expected for steel-using sectors, with a 0.5% fall this year instead of a projected recovery of 1.6%.

‘The overall evolution of steel demand remains subject to very high uncertainty, with no improvement expected before the first quarter of 2026,’ the outlook says. ‘Consumption volumes are expected to remain far below pre-pandemic levels.

Automotive slump

The performance of steel-using sectors last year was negative with a 4.9% drop in the fourth quarter. All steel-using sectors underperformed, particularly automotive (down 2.6%) and construction (flat), contributing to a deeper-than-projected recession of 3.7% for the whole of 2024.

‘US tariffs and associated uncertainty are now expected to impact the Steel Weighted Industrial Production index in 2025, with another projected recession (down 0.5%), versus previous expectations of 0.9% growth. A modest rebound of 1.3% is expected in 2026.