Data suggests that May 2018 saw the largest jump of the year. In that month, global output increased by 6.6% compared to May of 2017. From April to May alone, global steel production jumped by 4.7 percent. While China and the European Union are responsible for the largest portion of these jumps, other countries are sure to see significant boosts as well.
India: A Steel Behemoth
Just recently, Anglo-Australian mining company BHP Billiton announced that it predicts Indian steel demand will double by 2025. Allegedly, the government’s goal is to produce 300 million tonnes of steel by 2030. If current production were to truly double by 2025, that means it would reach 170 metric tonnes.
Some economists are suggesting that India’s 2030 goal may be a bit of a reach. However, they still say it’s no doubt that the construction and infrastructural industries have a demand.
The recent trade war that has been spurred on by the Trump Administration’s tariffs has global economies scrambling for new strategies and steel consumers. There has been an inevitable period of rockiness in light of these recent events. Nonetheless, Huw McKay, BHP Billiton Vice President of Analysis and Economics, says there is enough global steel demand to absorb the newly produced steel.
EU Responds to Steel Tariffs
Since the U.S. has imposed levies on imported steel and aluminum, the EU must prepare for a steel/aluminum import surge into the bloc from other countries. Consequently, they are searching for solutions to curb some of these imports. On Thursday, the EU voted to back measures preventing an overwhelming influx of steel and aluminum. As a result, they have put a quota in place. They will still welcome steel imports, with some exceptions. To prevent a flood of steel imports into the EU market, the EU will place tariffs on imports exceeding the determined quota.
Excessive steel imports into the EU market could damage the EU steel industry’s own prosperity. The EU has also imposed its own levies on numerous U.S. imports, including jeans, bourbon, and motor bikes. Canada is also imposing “retaliatory tariffs” in response to the new U.S. policy.
While the impacts of the U.S. steel tariffs on the domestic market are still being assessed, certain industries (such as the automotive industry) will likely be impacted. In some steel-oriented towns across the country, the tariffs have brought relief. Many view it as a way to boost the American steel industry and encourage domestic steel production. As time continues on, consumers and steel experts are hopeful that growth in the steel industry will too.