The European Steel Association (EUROFER) has stated that, although the European Commission’s decision to extend the steel safeguard measures for another two years until June 30, 2026, is needed to ensure the stability of the EU steel market due to the highest levels of import penetration ever recorded in the EU, a long-term solution should be developed to address global excess capacity, which now stands at four times the size of EU steel demand and is anticipated to increase further in the coming years.
EUROFER noted that global excess steel capacity increased by nearly 50 million mt to almost 560 million mt in 2023. According to the OECD, approximately 158 million mt of new capacity may come on stream by 2026, while global steel demand is currently growing by only around 36 million mt per year.
The increase in EU imports has been driven by exporting countries where steel capacities have expanded most significantly, notably in Southeast Asia and in parts of the Middle East and North Africa. In these regions, increasing capacities, which are partly fuelled by Chinese-subsidized investments and partly by local investments, are notably exceeding local steel demand. Moreover, Chinese steel exports are pushing other markets to direct steel to the EU market, EUROFER said.