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Section 232 could heighten Europe's steel trade deficit

The implementation of Section 232 in the US could affect around 15% of all European steel exports, with over 3 million mt/year having to find a new home.

A European mill source said a further safeguarding would have little direct impact on European exports noting a number of US anti-dumping duties are already in place for a range of steel products.

However, despite a number of existing trade cases, the US remains the second-largest export destination for Europe after Turkey.

According to official statistics published by Eurofer, in January-November 2017 exports to the US totaled 2.97 million mt, an increase of 2.8% year-on-year.

The 2016 full year total was 3.05 million mt.

Europe enjoys a significant trade surplus with the US, which shipped 101,073 mt of steel in January-November 2017.

Whereas the continent's total trade deficit for the 11month period was 4.7 million mt on exports of 19.8 million mt.

As a proportion of total EU exports, the US grew to 15% in January-November 2017, up from 14% a year earlier.

The loss of the US as a market would be a heavy blow, building on the significant reduction in significance of Algeria following the country's decision to cut rebar import licenses.

Perhaps a bigger concern, however, is the likelihood of previously US-bound material finding its way to Europe.

However, one mill source said he thought it was unlikely the US would stop importing.

"I'm not so sure there is a trade war coming. What's missing is the reply from the end-users, I think they'll get organized very quickly... To be honest all it's going to do is push domestic prices up to the level of the duty and then people will import without the duty," he said.

Source: Platts

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