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TOP STEELMAKERS 2018: European market on the defensive on Section 232 tariffs, Brexit uncertainties. Shah, Viral Metal Bulletin Daily. 6/25/2018, pN.PAG-N.PAG. 1p. Article *Steel -- Export & import trade *Steel industry Steel prices Tariff on steel British withdrawal from the European Union, 2016-2020 Europe Brexit Europe steelmakers Section 232 tarffis Top Steelmakers 2018 416210 Metal service centres 331110 Iron and Steel Mills and Ferroalloy Manufacturing 331221 Rolled Steel Shape Manufacturing Support from trade defense measures and increased demand led to higher prices, boosting European steelmakers over the second half of 2017 and in the first half of 2018. [ABSTRACT FROM AUTHOR] Copyright of Metal Bulletin Daily is the property of Euromoney Institutional Investor PLC and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.) 620 2057-2379 130314121 Business Source Ultimate

TOP STEELMAKERS 2018: European market on the defensive on Section 232 tariffs, Brexit uncertainties

Support from trade defense measures and increased demand led to higher prices, boosting European steelmakers over the second half of 2017 and in the first half of 2018.

Top Steelmakers 2018; Europe steelmakers; Brexit; Section 232 tarffis

But concerns about the increasing threat of protectionism amid the US Section 232 tariffs on steel imports and the potential redirection of steel from the United States to the European market have led to uncertainty in the market ahead of the second half of 2018.

In late April, US authorities postponed until June 1 the imposition of import tariffs on steel and aluminium from the EU, Canada and Mexico. The 25% tariff on steel arises from the country’s Section 232 trade investigation, with the temporary exemption for the three regions expiring at 12.01am on Friday.

The EC started its own safeguard investigation into 26 steel products on March 26 this year, with the intention of shielding the region’s steel industry from the effects of a possible surge in import volumes that could come from material being redirected from the US. Crude steel production in the EU rose by 4.11% to 168.68 million tonnes in 2017, according to Worldsteel, as EU steelmakers took advantage of stronger market conditions.

EU flat steel prices strengthened in the second half of 2017 on the back of higher raw material costs, the recovery of international coil market prices, and positive effects from anti-dumping measures in Europe. The EC imposed definitive anti-dumping measures on hot-rolled coil (HRC) from China in April 2017, as well as from Russia, Brazil, Iran and Ukraine in October 2017.

Total steel imports into the EU fell by 1.8% in 2017, reflecting a 7.9% year-on-year rise in the first half of the year and an 11% year-on-year drop in the second half, according to regional steel association Eurofer. Metal Bulletin’s assessment of prices for Northern European domestic HRC gradually rose to €570-590 ($666-690) per tonne on March 7, 2018, up gradually from €485-510 per tonne on July 12, 2017.

ArcelorMittal, retaining its position as the world’s largest steelmaker in 2017, was at the forefront of driving price increases for both flat and long steel products. The Luxembourg-headquartered producer reported an operating income of $2.36 billion for its European operations in 2017, up sharply from $1.27 billion in 2017. ArcelorMittal’s acquisition of Italian steel producer Ilva received conditional approval from the EC on May 7, after it proposed to sell a number of flat steel plants throughout Europe to one or more buyers to preserve effective competition in the European steel market.

Elsewhere, the proposed flat steel merger between Germany’s ThyssenKrupp and the European subsidiary of India’s Tata Steel is expected to be agreed by the end of June this year. The venture is expected to generate annual revenues estimated at €15 billion and to ship about 21 million tpy of steel.

Concerns remain over the ambitious fourth phase of the EU’s Emissions Trading System (ETS), which will run from 2021 to 2030. Eurofer has said that the plan still fails to secure a global level playing field for the region’s steel industry. Negotiations on the reform of the EU ETS were concluded to reach a

provisional agreement between the European Parliament and Council in November 2017, after a legislative process which lasted more than two years.

Market participants will also continue to watch UK’s Brexit negotiations with the EU closely, with a continued lack of clarity.

This forms part of a longer article first published in the June issue of Metal Market Magazine, which carries in-depth feature articles, analyses and reviews of metal and steel markets.

~~~~~~~~ By Viral Shah

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