Uncertain economic prospects slow down the development of the European steel market
The summer recession in the European steel sector began early amid growing geopolitical uncertainty and economic forecasts indicating that the second half of the year will be calm.
Many members of the European Parliament contacted by experts suggest that demand has further decreased after the May trading, interrupted by regional holidays. Growing concerns about the cost of CBAM, which takes effect on January 1, 2026, and the impact of U.
S. import duties have led steel buyers to adopt a wait-and-see attitude.
The European Commission raised its estimate for the first quarter of GDP growth in the Eurozone to 0.6%, compared with the previous estimate of 0.3%. However, he attributed this to an outstripping increase in exports to circumvent new US import tariffs. The subsequent uncertainty in international trade led to a reduction in the forecast for the growth of the eurozone economy for the whole of 2025 from 1.1% to 0.9%.
- This article was first published in the June issue of the European Member of the European Parliament International Steel Review magazine. The monthly publication publishes steel prices, indexes, comments and forecasts covering key markets across Europe. Contact the members of the European Parliament for detailed information on how to sign up.
President Donald Trump has doubled Section 232 imports and the duty rate will be increased from 25% to 50% on June 4. Many steel market participants are currently awaiting the results of the EU-US negotiations, which will determine whether higher retaliatory tariffs on processed products will be applied. On July 9, the 90-day break in the application of these tariffs for specific countries ends, during which the base rate of 10% was applied. The fate of the United Kingdom's trade agreement with the United States, which could exempt its steel exports from Article 232 tariffs, will also be decided by that date.
While the 50% tariff rate under Article 232 has made steel exports from the EU to the US unviable, Europe is also experiencing the indirect effects of the total imposition of the US tariff. Steel buyers have received an increased volume of offers from Brazil and India. This, as well as the emergence of interest from producers in Iran before the outbreak of hostilities with Israel, indicates the redirection of raw materials previously destined for the United States.
In addition, the value of the US dollar has decreased by more than 11% compared to the February high. This has reduced the cost of imports, widening the gap with materials offered by EU factories. However, the timing of deliveries, which will soon cause new import orders to incur CBAM-related emissions costs, and stagnant steel demand limit the impact of cheap