WNP: EU steel market protection may hurt its consumers

The steel industry welcomes the changes in market protection announced by the European Commission, but European steel distributors are much less optimistic. They foresee a reduction in market supply and an increase in prices. They want market protection to be extended, writes Piotr Myszor for WNP.

• According to steel distributors, the combination of CBAM and the successor to the safeguard will lead to a sharp rise in prices and structural shortages in European manufacturing.
• The new measures to protect the EU market are expected to cause price increases which, according to one German analyst, will not be 3.25 per cent as predicted by the European Commission, but much higher.
• Mass protection of the steel industry will further intensify the shift of competition from third countries to processed products.

According to Euranimi (European Association of Independent Metal Distributors), the introduction of CBAM at the beginning of next year will raise steel prices by at least 10 per cent.

In its proposal for a tool to replace the safeguard, the European Commission envisages reducing import quotas for steel by 50 per cent and for stainless steel by 60 per cent, and increasing customs duties on products sold outside the quotas from 25 per cent to 50 per cent, which will lead to further price increases.

According to Euranimi, combining CBAM and the successor to the safeguard will lead to ‘a sharp rise in prices and structural shortages in European manufacturing.’

The new proposals only protect steel producers, and do so too strongly

German analyst Andreas Schneider, owner of the analytical company Stahlmarkt Consult, also notes that the new proposals only protect steel producers, and do so too strongly. According to Schneider, the EU manufacturing industry will lose out because the new measures will cause prices to rise, which Schneider believes will not be 3.25 per cent, as predicted by the European Commission, but much more.

According to the analyst, this will have a devastating impact on the EU industry, as it will significantly reduce its competitiveness – material costs will increase, but there will be no protection for the market for finished products.

According to Schneider, this will have a particularly strong impact on the flat products market. In his opinion, the new quotas would lead to a decline in imports of around 8.5 million tonnes compared to 2024 levels, which represents more than 10 per cent of consumption in the European Union.

Another product, this time a long product, highlighted by Andreas Schneider is wire rod, which had the largest share of imports last year – 15%. Schneider calculated that the new market protection tools would eliminate about 1 million tonnes of imports, or almost 6% of consumption in the EU.

Imports also account for a significant share of the supply of certain stainless steel products in the European Union. Restricting imports would strengthen the position of EU producers and could prompt them to raise their prices.

The unfavourable cost conditions faced by steel processors will worsen

‘Massive protection of the steel industry will further intensify the shift of competition from third countries to processed products (…). The unfavourable cost conditions faced by steel processors in international competition will worsen,’ wrote Andreas Schneider in his company blog.

Euranimi shares this view, arguing that the currently proposed market protection will leave a significant gap between heavily protected steel producers and producers of finished steel products or pre-processed steel who are exposed to excessive competition. According to the association, this is a sure-fire way to drive EU producers out of the market and further deindustrialise the European Union.

Euranimi argues that the effects of CBAM and the new market protection are already visible on the market, even though neither measure has yet come into force. Their mere announcement has led to a gradual increase in prices. Andreas Schneider also draws attention to this problem.

A strong steel industry exists thanks to a strong European market

‘Protecting steel production in the EU is justified, but not at the expense of the manufacturing industry. Otherwise, we will lose even more production, jobs and autonomy. A strong steel industry exists thanks to a strong European market,’ wrote Rob Greve, member of the Euranimi board, in a press release.

Representatives of the association are calling on the European Commission to revise its plans. According to them, a 50% import duty should also be applied to products containing at least 20% steel. This is to ensure that EU producers are not penalised for manufacturing in the EU. Otherwise, production in the EU may start to decline.

‘I wonder who EU steelworks will supply steel to in the future if steel products are not protected by the market?’ concluded Aleksander Julius, president of the European distributors’ association Eurometal.

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WNP
Translated from Polish
31 October 2025