1、 Intensifying trade protectionism and high tariff barriers
The United States has upgraded its comprehensive steel and aluminum tariffs
Starting from March 2025, the United States will impose a 25% tariff on all imported steel and aluminum, and implement the "Origin Smelting Traceability" (SMR) policy, requiring proof of steel smelting location, which has hindered the export of Chinese steel billets. For example, the export volume of Shougang Peru Steel Plant to the United States has decreased by 60%
The EU, Japan and other economies have followed suit with adjustments. The EU plans to tighten steel import quotas and impose a 25% tariff, while Japan's crude steel production may drop to the lowest level in half a century due to export restrictions
Frequent trade frictions in emerging markets
Vietnam, India and other countries have initiated anti-dumping investigations. For example, in 2024, Vietnam launched the largest anti-dumping case in history against China's hot-rolled coils. China faced 33 trade remedy investigations throughout the year, involving emerging markets such as Southeast Asia and the Middle East
Some countries are implementing a "localized procurement" policy, such as the African Development Bank requiring 60% of steel for infrastructure projects to come from local sources, forcing Chinese companies to lower prices and compete
2、 Carbon tariffs and pressure for green transformation
Impact of the EU Carbon Border Adjustment Mechanism (CBAM)
Starting from 2025, the European Union will impose carbon tariffs on imported steel, with a default carbon emission intensity of 2.2 tons of CO ₂ per ton of steel from Chinese steel mills (higher than the actual 1.8 tons), resulting in an additional cost of 50 euros per ton and eroding corporate profits
The carbon accounting standards are complex, such as the need to provide full lifecycle carbon emission data, making it difficult for small and medium-sized enterprises to comply
The high cost and uncertainty of upgrading green technology
The investment in technologies such as hydrogen metallurgy and green electric steelmaking is huge. For example, the cost of green hydrogen steelmaking in Saudi Arabia is as high as $4.5/kg, making it difficult to commercialize in the short term
Upgrading international competition standards, such as Japan joining forces with ASEAN to launch the "Low Carbon Steel Certification" (carbon emissions<1.5 tons of CO ₂/ton of steel), which excludes Chinese enterprises that rely on coal-fired power
3、 Market demand differentiation and price competition
The traditional high priced market is weak
The European and American markets are affected by the sluggish real estate market and the slowdown in manufacturing, resulting in insufficient demand. The replenishment efforts in Europe are weak and the cycle is short. In 2023, global crude steel consumption will decrease by 19.2 million tons, with a significant decline in Europe
Uneven growth in emerging markets and strong infrastructure demand in Southeast Asia, coupled with local capacity expansion (such as the planned production of 25 million tons of blast furnace capacity in ASEAN), may squeeze China's export space for long materials
Price War and Profit Compression
The characteristic of "price for quantity" in Chinese steel is obvious, with an average export price of 755.4 US dollars/ton in 2024, a year-on-year decrease of 19.4%. The export price of hot-rolled coils is 65-70 US dollars/ton lower than that of India
The domestic supply-demand contradiction is intensifying, and enterprises are competing at low prices to alleviate inventory pressure, resulting in sustained downward pressure on international market prices
4、 Supply Chain Restructuring and Geopolitical Risks
Rules of Origin and Regional Industrial Chain Transfer
The US SMR policy forces companies to set up factories in Mexico and Southeast Asia, but the cost of scrap steel in North America is 25% higher than in China, and Southeast Asia is facing localization policy pressures such as Indonesia's "export surcharge on processed goods"
After being sanctioned, Russia's steel billet exports have been restricted, indirectly promoting the growth of China's steel billet exports, but the stability of the supply chain is questionable
Geopolitical conflicts and logistics fluctuations
The conflict between Russia-Ukraine conflict has led to changes in the pattern of steel logistics in Europe. The Middle East and Southeast Asia have become alternative markets for low-cost supply, but regional instability has increased transport risks
The data localization policy (such as ASEAN) has pushed up the operating costs of smart steel mills, and the Thai digital steel mill of Hebei Iron and Steel has seen a 5% increase in the cost per ton of steel due to data control measures
5、 Corporate Strategic Transformation and Compliance Challenges
Technical blockade and equipment dependence
The United States has banned the sale of high-end rolling equipment (such as 7xxx series aluminum alloy equipment), and the capacity utilization rate of Nanshan Aluminum has dropped to 70%. It is necessary to break through by acquiring European companies or copying equipment
Intellectual property barriers increase research and development costs, such as the patent layout dominated by Japan's Nippon Steel, which restricts Chinese companies from upgrading their technology
Compliance costs and tax risks
Export tax inspections are becoming stricter, and North China Customs has demanded additional taxes due to the "zero tax" policy. Enterprises need to rely on professional customs declaration services to avoid risks
Frequent policy changes in multiple regions (such as Indonesia's export surcharge and Malaysia's suspension of steel investment) require companies to dynamically adjust their investment strategies
Suggestions for coping strategies
Market diversification and regional deepening: focus on expanding the joint construction of the "the Belt and Road" countries, use photovoltaic steel plants (such as the Delong project in Indonesia) to obtain green power premiums, and bind geographical resources (such as the Congo cobalt mine steel replacement agreement)
Technological breakthroughs and low-carbon transformation: accelerating the application of hydrogen metallurgy and carbon sequestration technologies (such as cooperation between Hebei Iron and Steel and Equinor Norway), participating in international standard setting to offset carbon tariffs
Supply chain resilience construction: Layout the entire industry chain in North America and Southeast Asia (such as Baowu Mexican arc furnace) to reduce policy risks in the country of origin
Compliance and brand upgrade: Strengthen ESG disclosure, enhance premium ability through high-end products such as automotive panels and electrical steel, and reduce dependence on price wars
Although the current challenges are severe, Chinese steel export enterprises can still seek structural opportunities in the global market and achieve sustainable growth through technological innovation, regional cooperation, and strategic adjustments.
