With the end of the slow summer period, the European market expects a possible resolution of the Section 232 steel tariff dispute on November 1, which could restore the flexibility of vital trade routes between Europe and the USA in line with WTO regulations.
If the tariff on European steel exports is lifted, local buyers fear a new increase in domestic steel prices at a time when hot rolled coil prices are still above EUR 1100/mt ex-works and European domestic inventory levels are extremely tight.
However, it can be difficult to come to an agreement with steel tariffs, which are an integral part of the U.S. steel industry, especially in heavy producing states such as Ohio, Pennsylvania, and Indiana.
While the US steel quota system is not currently in place, steel protection measures are firmly established in the domestic European market. From 1 July, European steel assurances have been extended for another three years and only a marginal increase of 3% is included in existing quota allowances.
EU steel market reacts, concerns base on tariff decision
Responses to the potential removal of Section 232 tariffs may result in financial distress for buyers who are already struggling to expand their lines of credit, while seller-side participants are willing to take advantage of arbitrage to the US.
A German distributor explained, "Removing the 25% import duty to the US for EU materials could result in higher exports from Europe and a price increase there. Anyone with access to good logistics can benefit from it." said.
A service center source in Benelux said the Section 232 tariffs pose a "real threat" to Europe, but higher local prices are needed to finance green steel production.
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