The international steel market at the beginning of 2026 is experiencing unprecedented policy turmoil. US President Trump’s move to restart the tariff war, coupled with the flexible response strategies of Chinese steel companies, is reshaping the global steel trade landscape. This article will analyze the current international turmoil in the steel industry from three dimensions: policy game, market reaction, and supply and demand adjustment.
I. Policy Shockwave: Trump’s New Tariff Policy Triggers Global Market Shock
On February 24, 2026, in the early morning of Eastern Time, with the implementation of the 15% global import tariff signed by Trump, global steel trade suddenly tightened. This tariff plan, covering key industries such as steel, aluminum, and semiconductors, marks a further escalation of US unilateral trade protectionism. However, the legality of this policy had previously been strongly opposed by the US Supreme Court—on February 20, a federal court ruled that the tariff measures implemented by the Trump administration in 2025 under the International Emergency Economic Powers Act “lacked clear legal authorization,” forcing the suspension of its large-scale tariff system.
Behind this policy back-and-forth lies a fierce power struggle within the US domestic political arena. Republicans are attempting to fulfill their campaign promise of “manufacturing reshoring” through tariff barriers, while Democrats worry that this move will drive up inflation and exacerbate tensions with allies. Morgan Stanley analysts point out that “the uncertainty surrounding tariff policy has led US steel importers to stockpile in advance, with hot-rolled coil futures prices on the Chicago Mercantile Exchange fluctuating by more than 12% in just two weeks.” Notably, the EU quickly retaliated. European Commission President Ursula von der Leyen emphasized on Twitter: “We will take all necessary measures to protect the European steel industry.” In fact, the EU has already launched an anti-dumping investigation into US steel by the end of 2025, involving €2.3 billion. This tit-for-tat stance adds further uncertainty to transatlantic trade relations.
II. Market Differentiation: A Tale of Two Extremes in the Steel Markets of China, the US, and Europe
Under the dual influence of policy disruptions and demand recovery, the global steel market is showing significant differentiation. The US market is exhibiting a paradoxical phenomenon of “declining volume but rising prices”: According to data from the American Iron and Steel Institute, crude steel production in January 2026 declined by 8.7% year-on-year, but the finished steel price index rose by 4.2% month-on-month. This divergence reflects the contradiction between the risk premium of supply chain disruptions and actual demand.
The Asia-Pacific market, however, has shown strong resilience. China’s two major private steel companies, Shagang and Yonggang, took the lead in raising ex-factory prices in late February, with rebar prices remaining stable at a high level of 3,450 yuan/ton. This pricing power stems from multiple supports: on the one hand, infrastructure projects along the “Belt and Road” initiative are driving steel demand, with major projects such as the China-Laos Railway and the Jakarta-Bandung High-Speed
The European steel industry, on the other hand, is deeply mired in a double squeeze of “cost and price.” ThyssenKrupp’s financial report shows that its EBITDA margin in the fourth quarter of 2025 was only 2.8%, far below the industry average. A BNP Paribas commodities analyst pointed out: “Energy price volatility, carbon emissions taxes, and weak demand have plunged European steel companies into a quagmire of losses.” Notably, Turkey, leveraging its geographical advantages, has seized market share in Europe, with its steel exports to the EU surging 37% year-on-year in 2025.
III. Supply and Demand Game: A Tug-of-War Between Export Growth and Capacity Adjustment
Against the backdrop of global restructuring, the steel industry’s supply chain landscape is undergoing profound changes. Mysteel’s latest forecast shows that China’s steel exports to the EU will reach 6.9 million tons in 2026, a year-on-year increase of 7%. This growth benefits from both the contraction of EU domestic capacity—ArcelorMittal’s plan to close three blast furnaces—and the increasing cost-effectiveness of Chinese steel. Data shows that the FOB price of Chinese hot-rolled coils is 12%-15% lower than that of EU domestic products.
On the supply side, China’s steel industry is undergoing structural adjustments. Data from the China Iron and Steel Association shows that by the end of 2025, more than 80% of crude steel capacity had completed ultra-low emission upgrades, and the comprehensive energy consumption per ton of steel decreased by 4.3% year-on-year. This green transformation, while enhancing competitiveness, also brings growing pains: An executive of a large steel company in Hebei frankly stated, “Upgrading environmental protection equipment increases the cost per ton by 80-100 yuan, posing a severe challenge to small and medium-sized enterprises.” It is worth noting that emerging market demands are reshaping the traditional trade landscape. In 2025, Tata Steel of India’s overseas revenue exceeded 40% for the first time, demonstrating the effectiveness of its capacity layout in Southeast Asia and the Middle East. Meanwhile, the launch of the African Continental Free Trade Area (AfCFTA) has reduced local steel import tariffs by 40%, attracting Chinese steel companies such as Baowu and Hebei Iron & Steel to accelerate their expansion.
IV. Future Outlook: A Dual Shift Between Technological Innovation and Geopolitics
Standing at the threshold of 2026, the future of the steel industry will depend on three major variables: First, technological innovation. POSCO’s hydrogen reduction ironmaking technology has entered the commercialization stage, with plans to reduce carbon intensity by 30% by 2027. This technological breakthrough may reshape the rules of competition in the industry.
Second, geopolitical competition. With the deepening implementation of RCEP and the accelerated negotiations on the China-Japan-Korea Free Trade Agreement, the integration of the East Asian steel industry chain is accelerating. Meanwhile, the US attempted to attract manufacturing back to China through the Inflation Reduction Act, but its 30% domestic manufacturing requirement sparked a WTO dispute.
Finally, there are ESG (Environmental, Social, and Governance) constraints. MSCI data shows that 62% of global steel companies have ESG ratings below BBB, and financing cost differences are becoming increasingly significant. Standard Chartered predicts that by 2028, steel companies that do not meet TCFD standards will face an average annual valuation discount of 15%.
In this industry earthquake triggered by the tariff war, China’s steel industry has demonstrated strong resilience. Through technological innovation, capacity optimization, and globalization, Chinese steel companies are shifting from “scale expansion” to “value creation.” However, the shadow of trade protectionism has not yet dissipated, and the pressure of green transformation is intensifying. Every step forward requires a precise balance between opportunities and challenges. As industry insiders have said, “Steel is the backbone of industry and a microcosm of great power competition—only by turning inward and embracing change can we anchor our future amidst the storm.”
Reprinted from steel.com
