Excess production capacity and protectionist measures are increasing pressure on the European steel industry, Callanish said at the Steel Tech 2025 conference in Bilbao last week.
In recent years, China, along with Southeast Asia and North Africa, has significantly increased its installed capacity, while no answer has been found to the question of how to limit new production volumes in the countries where they are produced.
"The sector is witnessing a global increase in trade protectionism measures. In addition, the constant increase in production capacity in certain regions and the increasingly aggressive behavior of exporters are having an impact on the trading environment," Henrique Arrieta, European Commission policy specialist on trade and economic security, said at the event.
Currently, countries such as the United States, Canada, Mexico, Colombia, the United Kingdom, Turkey, India, and Egypt have adopted protective measures to protect their markets. China, meanwhile, is achieving record export figures every year, which is disrupting traditional markets.
One of the most telling examples is Vietnam, which has doubled its installed capacity from about 15 million tons per year to almost 30 million tons over the past eight years. "The problem arises because, given China's aggressive export behavior, the Asian country is not only flooding the Vietnamese market, but also displacing Vietnam from its traditional export destinations such as Thailand or the United Arab Emirates," the expert explained.
As a result, Vietnamese steel exports to the EU increased by 70% after the pandemic, making the country the fourth largest supplier of steel to Europe, and according to the official, this shift occurred "very quickly."
A similar phenomenon can be observed in Japan, which, despite not increasing capacity in recent years, has redirected volumes to Europe after losing influence in key markets such as Indonesia, South Korea and Thailand, which are now dominated by Chinese steel. Between 2023 and 2024, Japan switched from exports to the EU in small quantities to shipments close to 2 million tons.
"These trends are observed at a time when the EU maintains a quota-based guarantee system, which limits its ability to respond. The combination of protectionism from third countries and the effects of global overcapacity creates a very unstable situation for Europe," Arrieta said. "Ideally, the problem of excess production capacity should be solved globally. But, as the past has shown, it turned out to be impossible. If excess capacity is not discussed, it is very difficult to fight
