European steelmakers see early benefits from new trade defences

European steelmakers are beginning to benefit from tighter trade protection, with higher selling prices and lower import pressure supporting margins despite still-weak underlying demand, according to MEPS International.

The market analysis points to improved results at major producers including ArcelorMittal, Thyssenkrupp and Tata Steel, while noting that the positive trend is being driven mainly by trade measures rather than a broad recovery in steel consumption.

ArcelorMittal margins improve

ArcelorMittal reported a stronger second quarter in Europe as uncertainty over the cost and availability of imports increased ahead of the introduction of new EU and UK trade measures on 1 July.

European crude steel production rose by 10.5% quarter-on-quarter between April and June, while EBITDA increased by 39%. EBITDA per tonne improved by USD 28 to USD 98 per tonne, the highest level in three years.

For the first half of 2026, ArcelorMittal's European sales rose by 25% to USD 15.2 billion and EBITDA increased by 20% to almost USD 1.2 billion, despite lower production and shipments.

The company expects the EU's reduced tariff-rate quotas and the new 50% above-quota tariff to provide further support during the second half of the year.

Thyssenkrupp and Tata Steel report stronger pricing

Thyssenkrupp also reported improved demand in the April-June quarter. Order intake in its steel division increased by more than 8% to €2.28 billion. The group recorded a quarterly net profit of €34 million, compared with a €255 million loss a year earlier, although the result also benefited from the sale of its stake in Hüttenwerke Krupp Mannesmann to Salzgitter.

At its Duisburg operations, Thyssenkrupp has resumed trial production at hot rolling mill No. 4 following fire damage. Construction of the company's planned direct reduction plant is also continuing.

Tata Steel similarly pointed to improved pricing conditions. Revenue from its Netherlands operations increased despite lower deliveries, while Tata Steel UK reduced its EBITDA loss to £27 million from £48 million a year earlier. MEPS said the company partly attributed the improvement to stronger pricing supported by the new EU and UK trade regimes.

Trade policy supports prices despite weak demand

MEPS's August market research indicates that summer holidays and high inventories continued to restrict purchasing following implementation of the EU's new Steel Regulation. Coil prices generally increased, while plate and long product markets remained more mixed.

Imports have nevertheless become less attractive as buyers face CBAM costs, greater exposure to tariffs and elevated freight rates. This is increasing demand for domestically produced steel, although service centres are facing pressure from higher purchasing costs and weak end-user demand.

MEPS expects trade and carbon policy to remain important drivers of European steel prices. Proposed changes to the EU Emissions Trading System could also slow the phase-out of free carbon allowances between 2028 and 2033 and retain a limited free allocation beyond that period.

The European Commission is additionally proposing stronger links between ETS revenues, free allowances and investment in industrial decarbonisation. A decision on the measures is expected in early 2027.

Source: MEPS, Photo: Fotolia