Sangsangin Securities forecasted on the 24th that South Korea's steel product exports will decrease due to the European Union (EU)'s strengthened safeguard measures.
On the 19th, Stefan Sejurne, EU Chief Vice-President for Prosperity and Industrial Strategy, announced the strengthening of safeguard measures to reduce imports of foreign steel. According to the plan, from next month on the 1st, the import volume allocated under the currently implemented steel safeguard will be reduced.
Jinbeom Kim, a researcher at Sangsangin Securities, said, "This is a measure in response to the Trump administration's imposition of tariffs on steel and aluminum," adding, "The main purpose is to block the potential damage to the regional steel industry caused by the influx of low-priced steel products from third countries such as China and India." He continued, "The measure will be fully implemented from April 1, and the existing quota volume is expected to be reduced by up to 15%."
Sangsangin Securities predicted that these measures will lead to an increase in local EU operating rates and product prices. He said, "Considering that the import volume of steel and derivative products in 2024 is at the level of 60 million tons, the operating rate of steel within the EU region is estimated to be low," and added, "Given that the local steel industry has claimed that the EU's safeguard regulations for industrial protection are insufficient, it seems highly likely that the specific detailed measures will be tailored to protect the regional industry."
He emphasized, "With the strengthening of safeguards and the introduction of CBAM, it is expected to have the effect of limiting the influx of low-priced imported goods, and accordingly, a gradual increase in steel product prices within the EU is anticipated."
In particular, these measures are expected to reduce South Korea's steel product sales to the EU. As of 2024, the EU accounts for 14.7% (4.37 million tons) of South Korea's total steel product export volume of 29.7 million tons, and the exposure to sheet products, including hot-rolled, thick plates, and galvanized steel sheets, is relatively high at 87.7%.
He explained, "Considering that the quota volume for individual countries of existing Korean companies is 2.67 million tons based on total steel products, the allocated quota is expected to fall to about 2.27 million tons, making a decrease in domestic steel industry's export volume to the EU inevitable," adding, "However, due to the price increase effect from the improvement in supply and demand in the local EU steel product market, the impact of reduced sales volume is expected to be partially offset."
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