Global Metals Weekly: Protectionism powering US and EU steel

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Global Metals Weekly

Protectionism powering US and EU steel

US steel prices have been rallying on tighter markets…

US hot-rolled coil prices (HRC) have surged by 48% since October 2025 to $1,180/st,

defying normal seasonal patterns and significantly outperforming other regions. More

importantly, the rally highlights a structural shift in US steel markets, where trade

protection has reduced import competition and strengthened domestic pricing power,

allowing mills to raise prices while increasing production. Meanwhile, underlying demand

has held up, leaving the market effectively undersupplied. Manufacturing activity has

been particularly resilient, with PMI surveys continuing to signal expansion across

multiple industries, supported by data centre and AI-related investment.

…but may pause as imports rise and rate hikes loom

Tight market conditions have pushed lead times higher, prompting buyers unwilling to

wait six weeks or longer for domestic material to turn to overseas suppliers. This has

driven up imports, especially among service centres facing dwindling inventories. At the

same time, the demand outlook could become more challenging if the Fed proceeds with

the rate hikes anticipated by our economists. Higher borrowing costs would likely weigh

on the most rate-sensitive sectors, particularly residential construction and automotive,

tempering the pace of price increases.

EU steel prices have lagged but are set to catch up…

EU steel prices have also rallied, although they still trade at a substantial ~40% discount

to US quotations. Unlike the US, where tighter import restrictions have been in place

since mid-2025, the EU's revised safeguard regime only came into effect on 1 July. Early

signs suggest the measures are already supporting pricing, with European HRC prices

rising by around €35/t to €715/t since implementation. While underlying demand

remains subdued, tighter import restrictions should provide increasing support to

domestic mills over the coming months.

…as tighter trade barriers boost pricing power

While Europe has sufficient spare capacity to replace a large share of displaced imports

…