1. Trade Policy Battlegrounds

• U.S. Protectionism: The 50% Section 232 tariffs (up from 25% in 2024) have reduced EU steel exports to America by 38% (3.8 million metric tons annually), while creating new trade routes through Mexico (now supplying 22% of U.S. imports).

• China's Export Adaptation: With direct U.S. exports down to 0.8% of total output, Chinese firms are establishing "finishing hubs" in Vietnam (steel semi-products up 167% YoY) to circumvent restrictions.

• EU's Carbon Fortress: The full-phase CBAM now adds €85-112/ton to imported steel, with Chinese producers like Baosteel losing €210M in EU orders since January.

2. Conflict-Driven Supply Disruptions

• Black Sea Blockades: Russia's continued control of Mariupol steelworks (formerly 12% of Ukraine's capacity) keeps European rebar prices 18% above global averages.

• Middle East Flashpoints: Houthi attacks on Red Sea shipping have increased iron ore transport costs from Oman to China by $9/ton, while Israeli-Lebanon tensions threaten Mediterranean scrap metal flows.

3. The Green Steel Race

• Technology Divide: EU mills lead with 14 operational hydrogen-based DRI plants (capacity: 9.2M tons), while emerging markets struggle with ESG compliance costs averaging $42/ton.

• Market Segmentation: "Near-zero" emission steel commands an 8% price premium in Europe, creating a two-tier global market.

Regional Market Transformations

RegionKey Political ImpactMarket ConsequenceChinaExport restrictions + CBAMDomestic glut (inventory up 23% YoY)EUEnergy crisis + carbon costsProduction down 11% since 2024IndiaPLI subsidiesBecame net exporter (8.3M tons in 2025)ASEANRCEP tariff advantagesSteel billet imports from China up 93%

Future Pathways

The steel industry must navigate:

1. Dual supply chains (traditional + green)

2. Political risk diversification through localized production

3. Technology leapfrogging to avoid carbon lock-in