Steel’s “Age of Protectionism” Intensifies.

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The depressed HRB export price could go even lower as the “Age of Protectionism” intensifies in the years ahead.  The latest announced trade actions in Western Europe could boost international supply by another 10-15 million tonnes in 2026, assuming the announced plans to reduce quotas and increase tariff rates on above-quota volumes are fully effective. Other factors that could increase the supply of steel on the world export market include:

  • The USA import tariffs have reduced the inflow of sheet products from an annualized rate of 10.6 million tonnes on average in 2024 to only 6.5 million tonnes based on the latest available figures. Canadian, Mexican and Brazilian steel products make up the bulk of the decline and, while the Canadian and Mexican mills may not be able to easily re-direct their sales elsewhere (given long-entrenched and logistically-advantaged supply chains with the USA), Brazilian and other mills are likely to aggressively seek other export markets.
  • Even ultra-low-cost mills, such as those in Algeria producing commodity long products using low-cost natural gas, are seeking new markets given newfound barriers in the EU and elsewhere.
  • Significant additional capacity is on the way, with announced capacity additions estimated at an astounding 80-100 million tonnes in the next five years, mostly concentrated in Southeast Asia, according to some estimates. Several facilities are slated to enter the market imminently, and their impact is bound to be significant at a time of intense competition:
  • The Phase-II expansion of the Ho Phat facility in Vietnam is reaching completion, adding about ~5 million tonnes of HRC capacity
  • Alliance Steel – a Chinese-backed project in Malaysia – is nearing completion, adding upwards of 6 million tonnes of both long and flat steel products.
  • Looking back for guidance regarding what happened in late 2015 – the time of the last historical HRB export pricing death spiral – may not be a good proxy for what follows in the near future.
  • Over the course of roughly 12 months, beginning late-2014, the HRB export price declined from about $500 per tonne, FOB port of export, to ~$275 per tonne in December 2015. During that period, China’s steel exports rose from an annualized rate of 114 million tonnes to 120 million tonnes.
  • The “bottom” of the market, ranging from $272 per tonne to ~$299 per tonne, lasted about six months with the price beginning to rebound in April 2016 surging to ~$450 per tonne by May. China’s export rate averaged about 115 million tonnes annualized during that period.
  • After various “ups and downs” through the summer of 2016, the price eventually picked up steam into the end of 2016 to $500+ per tonne. From April through the end of 2016, China’s steel exports would gradually decline to about 87 million tonnes annualized, a reduction of about 41 million tonnes from the peak rate of 128 million tonnes.

Unlike the situation in 2015-2016, there appears to be no meaningful reversal in sight to China’s steel exports:

  • China’s exports have averaged about 137 million annualized to date in 2025, following an average figure of 124 million tonnes for all of 2024. The latest figure for October 2025, at 11.9 million tonnes (inclusive of semis exports and yielded-up to a crude steel equivalent basis) still translates to ~140 million tonnes annualized.

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