Tariffs on steel and aluminum between the United States and the EU officially do not exist as of December 1, and whether European quotas on steel imports from third countries, including Serbia, will be abolished is still unknown. Restrictions on exports were compensated by the Smederevo ironworks by increasing the value of this metal on the world market and by November this year, according to the Ministry of Finance, it exported steel worth about 619.6 million euros, which is 1.5 times more than in the same period 2020.
Bojan Stanic, assistant director of the Sector for Strategic Analysis of the Serbian Chamber of Commerce, believes that it is unlikely that quotas on steel from Serbia will be abolished in the foreseeable future. Steel from our country is in the production of the Chinese “HBIS”, and the EU does not look favorably on the system of Chinese technology. On the other hand, steel is a strategic product, which must be preserved.
Stanic states that when you look at the export of “HBIS”, it fell in volume by about 6.5 percent on average, and grew in value by about 67 percent, which is a consequence of the increase.
– The price of steel has been rising lately because demand is higher than supply. Supply fell further due to reduced production in China as demand from the Chinese construction industry decreased. In addition, China has reduced coal production due to environmental problems and air pollution. Of course, there are also inflationary pressures. During the next year, the price of steel is expected to remain high – Stanić emphasizes.
Ivan Nikolic, a research associate at the Economic Institute, says China’s HBIS Group mainly exports steel from Smederevo to the EU. He cites the example of the third quarter in which steel worth 320 million euros was exported, and in 2020, 127 million euros in the same period. And in the third quarter, 100 million euros were exported more than in the second quarter of this year.
At the G-7 summit in Rome, Joseph Biden, the president of the USA, and Ursula von der Layen, the president of the European Commission, signed the agreement on the abolition of customs duties on the import of European steel and aluminum, imposed by the Trump administration. Thus, they ended the strained trade relations, and the EU announced that from December 1, it will no longer apply the introduced reciprocal measures to the import of American products.
In June 2018, the United States imposed a 25 percent tariff on European steel and 10 percent on European aluminum, citing national security concerns. The EU has included countermeasures for US exports worth 6.4 billion euros. In addition, in order to protect its steel plants, the EU introduced quotas on steel imports from third countries next year, including Serbia.
But even if the quotas are not abolished, our only exporter will probably be able to compensate for that deficit to some extent with prices. Steel prices could rise significantly in the coming years, according to T. Ð’. Narendran, CEO of Tata Style, India’s leading steelmaker and one of the world’s largest.
In the last seven or eight years, the average price of hot-rolled steel was around 400 or 450 dollars per metric ton, while the long-term average in the coming years will probably be above 600 dollars, Narendran estimated. He explained that there will be several changes in the steel market, including rising costs and China’s growing role.
According to him, China exported more at its peak than India produced, but Chinese steel exports have since halved to about 60 million tons a year and could further decline as the country moves toward net zero carbon targets.
For the first time, the demand for steel is not driven by China, he added, noting that the World Steel Association estimates that the growth of consumption this year will come from other countries, having in mind that the Western world is investing in infrastructure. The American president recently signed a two-party law on infrastructure worth more than a thousand billion dollars, Politika reports.
