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The global steel market faced challenging conditions throughout 2024, with 2025 presenting new hurdles and opportunities for the struggling sector. Global steelmaking overcapacity, economic and political woes, growing protectionism around the world, the strive for decarbonization and evolving green steel markets were some of those challenges.
The signature move of US President-elect Donald Trump’s first term in 2016 was the implementation of Section 232 tariffs, which imposed a 25% tariff on steel imports from nearly all countries, invoking legislation that dates back to the Cold War.
The move was contentious from the start, prompting several legal challenges by affected countries, and sparked further controversy when it was used as leverage for foreign policy purposes.
That did not prevent Section 232 tariffs from gaining popularity among market participants of the US steel industry, however, as they watched prices – and profits – rise in the tariffs’ wake, Fastmarkets reported.
Trump is threatening to introduce a new round of tariffs in his second term in the White House. This time, free-trade partners Canada and Mexico would not be left out, a move that would defy the United States-Mexico-Canada Agreement (USMCA), which Trump himself signed during his first term.
China, the US’ perennial villain in the steel market, is also in the President-elect’s crosshairs.
A new round of protectionist measures could change trade flows in unpredictable ways, particularly if reciprocal tariffs are put in place, Fastmarkets understands.
Drama swirled around US Steel’s decision to put itself up for sale in 2023. Rival Cleveland-Cliffs was outbid by Japan’s Nippon Steel in December of that year, sparking a national outcry from members of Congress and politicians across the political spectrum.
President Joe Biden, President-elect Trump and Vice-president and former presidential candidate Kamala Harris all vowed to block the deal, which also faces opposition from the United Steelworkers (USW) union.
Nippon Steel has pledged to invest billions of dollars into the company should the deal go through. If not, US Steel has warned that it may be forced to shut down some mills and relocate its headquarters from Pittsburgh, Pennsylvania.
President-elect Trump, who has strongly opposed the deal in several instances, is now in a position to decide US Steel’s fate.
Negotiations have been in limbo for some time, with millions of tons of steel and thousands of jobs hanging in the balance.
European and Asian low-carbon steel producers are collecting healthy premiums in their respective markets, while the US premium has remained at zero since it was launched in May 2024.
A webinar hosted by Fastmarkets in early December suggested why that might be. Greenway Steel founder and CEO Randy Charles and American Iron and Steel Institute president and CEO Kevin Dempsey agreed that the market is still experiencing growing pains.
Steelmaking in the US, however, is already greener than in most countries due to the broad use of electric-arc furnaces (EAFs), which account for 70% of the country’s steel production. It is also one of the priciest places to buy steel in the world.Those two factors are working against the acceptance of a green steel premium, sources have told Fastmarkets. But this should not last long, Charles and Dempsey said. While a top-down regulatory push is unlikely in the second Trump administration, customers in the automotive and construction sectors are demonstrating growing interest in green steel.
From chrome and manganese to molybdenum and vanadium markets, participants have reported a significant decrease in end-user demand prompted by persistent weakness across the European steel market.
Steel association Eurofer has warned of the potential for an irreversible decline in the industry – with steelmakers already cutting production and putting green investments on hold – unless the European Union and its member states take urgent action.
In the ferro-vanadium market, the lack of demand due to factors such as sanctions against Russia-related entities has capped the potential for upside, while it has contributed to substantial price declines in the ferro-chrome market.
In the molybdenum market, in addition to declining demand, shifting buying patterns and waning spot activity have kept prices in check in 2024.
Steel producers have reportedly been reducing alloy intake requirements across products, Fastmarkets heard, prompting sluggishness in spot markets and leaving market participants with little expectation of a significant uptick in buying appetite for 2025.
Construction and installation of new steel production capacities will continue in the Middle East North Africa (MENA) region in 2025, and new projects slated to start production from 2027 onward are likely to be announced, Fastmarkets has reported.
What is common among the new capacities is their focus on low-carbon emissions. This will provide a significant edge in global markets, along with their competitive advantage from using renewable energy sources, the Institute of Energy Economic and Financial Analysis (IEEFA) said in a report published in September.
As a result, MENA steelmakers will be able to offer steel with low-carbon emissions at competitive prices in export markets, especially in Europe, where the approaching implementation of the Carbon Border Adjustment Mechanism (CBAM) is set to boost demand for this type of material, Fastmarkets has heard.
Middle Eastern steelmakers have focused their efforts in producing greener steel in the past years.
In addition to high costs, however, availability of green raw materials will be a challenge for the region in 2025 and onward.
There is sufficient pellet supply in the Middle East to feed the regions’ steelmaking demand for at least another 10 years, but scrap will become scarcer, Fastmarkets heard during the Middle East Iron and Steel Conference in Dubai on November 18-20.
Several investments in direct-reduced iron (DRI) production have been put on pause recently in Europe, with sources suggesting the region might have to split iron and steelmaking to remain competitive.
Europe’s largest steelmaker ArcelorMittal has put on hold several green investment decisions across the region amid the unfolding economic crisis, as well as high energy and carbon costs.
Sources fear that the market leader’s move might have a domino effect.
More than 50 million tonnes of new green steelmaking capacity – using the EAF or the DRI-EAF route – is expected to come online in Europe in 2025-2030, Fastmarkets reported.
Switching to DRI-EAF production, however, raises concerns in the European market, due to the energy-intensive nature of DRIs and the lack of energy infrastructure in the region to support such a transition.
Several market participants have said that, in this scenario, it would make sense to split iron and steelmaking in Europe and to import hot-briquetted iron (HBI) and DRI from the Middle East-North Africa region, for example, where HBI and DRI production is more commercially viable.
Europe has toughened trade measures against steel imports in 2024 and provisional anti-dumping (AD) duties affecting nearly half of region’s hot-rolled coil imports are expected to be introduced in 2025, Fastmarkets heard.
In August 2024, the European Commission launched an AD probe against HRC imports from Egypt, India, Japan and Vietnam.
The Commission introduced an obligation to register all imports under investigation in AD or anti-subsidy cases in the following month, paving the way for the potential application of retroactive duties.
The entity launched a review of safeguard measures for steel on December 17 amid shrinking domestic demand and trade flows diversion caused by Chinese exports. New measures are expected to come into force as soon as April 2025.
The EU’s CBAM, one of the main decarbonization drivers, is expected to fully come into force in 2026, but market sources are worried about possible circumvention, resource shuffling and delocalization of downstream sectors.
The Commission is investigating the potential extension of CBAM to products further down the supply chain of the goods – such as iron and steel – already covered by the regulations in force.
Market sources suggested that the CBAM will reshuffle import flows to the EU, and overseas suppliers able to provide materials with lower carbon footprint, such as those from Turkey and MENA, for example, will have a competitive edge.
Steel exports from China, the world’s biggest producer, are set to be severely constrained by a range of trade defense measures in 2025, market participants told Fastmarkets.
Governments across the world initiated 23 trade defense cases against Chinese steel exports by end-October, far exceeding the cumulative total of 15 cases in the three years from 2021 to 2023, according to data from the China Iron & Steel Association (CISA).
The increased number of trade defense cases – including from major markets for Chinese steel exports such as Vietnam, Turkey and South Korea – will have a big impact in 2025 and deal a significant blow to China’s steel market, which is already struggling with overcapacity, an industry expert said.
The resurgence of global trade tariffs in 2025, including those threatened by US President-elect Donald Trump, could cause broader impacts on global steel prices and trade flows.
“Beyond the direct impact of the rollout of tariffs on Chinese steel affecting China-US steel trade flows, a more pressing concern would be the influx of Chinese steel flowing into other markets such as Southeast Asia, India and the Middle East,” a trader in Singapore said.
China exported 101.15 million tonnes of finished steel in the January-November 2024, up by 22.6% from 82.54 million tonnes during the same period of 2023, according to the latest figures published by China’s Iron Ore and Steel Association (CISA).
Major importers such as Brazil have since launched a fresh slew of quota-tariff measures against the influx of Chinese steel, as well as AD probes on Chinese steel imports.
Beyond tit-for-tat tariff barriers, the implementation of non-tariff-based trade barriers on Chinese steel is also underway in major importing countries such as India, with local authorities clamping down on the number of import licenses issued.
Steel products that are imported into India need a BIS quality certification, without which the material is not allowed to be sold in the country.
They are normally renewed by manufacturers immediately after expiration, but Chinese companies with expired licenses are not showing any inclination to renew them, Fastmarkets heard.
“The establishment of import standards and license controls is likely to be the preferred measure by major importers instead of a direct tariff implementation,” a second Singapore-based trader said.
Manganese ore supply in global seaborne markets will increase in 2025, with the restart of sales and exports at South32’s Groote Eylandt Mining Co (GEMCO) mining facilities in Australia and continual shipments from Ghana, according to sources.
“Mining activity [at GEMCO’s manganese ore facility is] to increase across [fiscal year 2025] and [fiscal year 2026] as we implement the operational recovery plan… sales volumes are expected to progressively increase over the June 2025 quarter,” South32 said in its financial reports.
Manganese ore supply from Ghana is also expected to remain high in 2025, a manganese ore market participant said.
China imported 3.64 million tonnes of manganese ore from Ghana in the first ten months of 2024, an increase of 50% over 2.42 million tonnes in the same period of 2023, according to Chinese customs data.
“We can say the available materials of manganese ore in [the global] market will rise in 2025, but seaborne shipment volumes are still depending on [the] demand side,” a second market participant said.
“There are also uncertainties, including freight and exchange rates, which may curb or shake shipments from manganese ore producing nations,” they added.
Global demand for manganese ore may stabilize in 2025, however, with a possible reduction in China being offset by growing demand from India and Southeast Asia, sources told Fastmarkets.
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