Steel Mills

ArcelorMittal: Tariffs are Causing a Steel Glut in Europe

June 13, 2019

The CEO of ArcelorMittal says Europe has a “steel glut” because of U.S. tariffs and the EU needs to do more to limit imports.

ArcelorMittal Chairman and CEO Lakshmi Mittal told a German newspaper yesterday that safeguards initiated by the EU are not successfully protecting the European steel industry.

“The EU has announced safeguard measures, but they weren’t effective,” Mittal told Frankfurter Allgemeine Zeitung. “Further measures are urgently necessary given the import tariffs U.S. President Donald Trump has imposed on steel imports to the United States.”

Mittal said gaps in the EU safeguard measures are making it easy for exporters to evade them and urged the European Commission not to relax its tariff protections in July. The measures are currently under review by the EC.

Mittal suggested that quotas by individual export country are needed for hot rolled sheet.

Steel imports to the EU have increased 30-40 percent since 2017, said Mittal. “The impact is massive; we have a steel glut,” he added. He estimates there is 500 million to 550 million metric tons of overcapacity in the steel industry—about 25 percent of global steel production. Most of the overcapacity is in China, said Mittal, where state subsidies need to end and unproductive manufacturers must be removed from the market.

In addition to steel tariffs, the trade conflict between the U.S. and China is hurting Europe, said Mittal, adding to current trade tensions between the U.S. and Europe and uncertainty over Brexit.

ArcelorMittal recently reduced steel production at its European mills due to weak market demand and high import levels.