Steel’s New Armour

The world’s most foundational industry is trying to go green while waging old-fashioned trade wars. It cannot do both.

What does a 21st-century industry do when faced with the twin challenges of decarbonisation and geopolitical instability? If it is the steel industry, it reaches for a 19th-century suit of armour. Across the globe, from the corridors of Brussels to the presidential offices in Washington and Brasília, the clanging sound of protectionism is drowning out the quiet hum of innovation. The world’s mills are firing up their trade lawyers as readily as their furnaces, creating a fortress mentality that threatens to undermine the very future they claim to be protecting.

Consider the flurry of activity in recent weeks, which feels less like modern trade policy and more like a bar brawl. The European Steel Association (EUROFER) is petitioning for anti-dumping investigations into Turkish steel, first for cold-rolled coil, then for hot-rolled. The United States, under the steady hand of President Donald Trump’s “America First” doctrine, is busy reviewing duties on welded pipe from South Korea and Turkey. Brazil’s industrial giant, Gerdau, warns of a sectorial “collapse” amid a surge of imports, a sentiment that finds a ready audience in Italy, where producers lament a weak September and fret about the future. Even Egypt, a smaller player, has shocked the market with a provisional safeguard duty on billet imports.

This is not a coordinated strategy, but a global panic attack. Each tariff, duty, and investigation is a sovereign brick in a new wall of mutual suspicion. The logic is seductively simple: protect our workers, our capacity, our national security. Yet the result is a global prisoner’s dilemma played out in tonnes of hot-rolled coil. While everyone professes a belief in free markets, no one is willing to risk being the last one to abandon them. The EU, for instance, bemoans its finished steel trade deficit, which widened in the second quarter of 2025, even as its own members, notably Germany, plead for a softening of emissions-reduction requirements that would make their industries more competitive. You cannot, it seems, have your carbon-neutral cake and eat it too.

This retreat into economic nationalism would be troubling at any time. Today, it is dangerously schizophrenic. For this is all happening against the backdrop of the most ambitious—and expensive—industrial transformation ever conceived: the green transition. Steelmaking, which accounts for roughly 8% of global CO2 emissions, is under immense pressure to reinvent itself. The path forward involves eye-wateringly expensive technologies: green hydrogen, carbon capture, and electric arc furnaces powered by renewable energy. Projects are indeed underway. In Germany, SHS-Gruppe is partnering with France’s Verso Energy to secure green hydrogen. In Oman, Jindal Steel has ordered a second hydrogen-ready plant. In Australia, POSCO is collaborating on carbon-reduced ironmaking.

Yet these green shoots are growing in the shadow of the tariff wall. The European Union’s flagship climate policy, the Carbon Border Adjustment Mechanism (CBAM), is itself a form of green protectionism. It is designed to prevent “carbon leakage” by taxing imports from countries with laxer environmental standards. Indian ministers are already warning that CBAM will hurt their exports far more than any American tariff. The policy creates a two-tiered world: the green and the taxed.

The inherent contradiction is staggering. Decarbonisation is a global problem that requires open markets, collaborative research, and colossal cross-border investment. Green steel, for the foreseeable future, will be more expensive than its carbon-belching alternative. To make it viable requires economies of scale and access to the largest possible markets. Instead, policymakers are fragmenting the globe, raising costs, and injecting the kind of uncertainty that kills long-term capital investment. The International Energy Agency has already lowered its 2030 forecast for green hydrogen production by a quarter, a sign of dreams colliding with reality.

Nowhere is this collision more poignant than in Ukraine. While Western nations debate the finer points of countervailing duties, Ukrainian steelmaker Metinvest recorded a loss of $58 million in the first half of 2025. Its executives plead for market access and security guarantees as the basic conditions for investment. The country’s ferroalloy exports are a fraction of their former glory. Meanwhile, a proposed hike in tariffs for the state railway, Ukrzaliznytsia, is being called a “black flag” for the steel industry—a self-inflicted wound in a nation already bleeding. While its mills struggle to survive between blackouts and bombs, Turkish steel exports to Ukraine have grown by over 36%. The brutal logic of the market respects no sentiment.

Looming over this entire chaotic scene is the spectre of overcapacity. While the West is alarmed by forecasts of a 165-million-tonne jump in global steel capacity by 2027, China, the world’s furnace, is sputtering. With its real estate sector in a deep freeze—investments fell by nearly 13% year-on-year—and steel production cut to a nine-month low, the question is where its excess steel will go. The answer is inevitable: it will flood a global market that is already choking on its own supply. This will trigger yet another round of tariffs, another cycle of blame, and another step back from the collaborative spirit needed for a green revolution.

The world’s steelmakers are being asked to perform an impossible feat: to forge a clean, sustainable future using the rusty tools of the past. They are investing in hydrogen while hedging with tariffs. They are talking about global ecosystems while building national fortresses. The result is policy incoherence on a global scale. The protectionist impulse does not just make foreign steel more expensive; it makes the future itself more expensive. It ensures that the transition to green steel will be slower, costlier, and more fraught than it needs to be. The new armour being forged in the world’s capitals may feel reassuring, but it is heavy, cumbersome, and ill-suited for the climate of the coming century.

📅 2025年09月21日 写于Zurich

✍️ 转载请注明：Steel Press