The agreement reached between the United States and the European Union regarding the replacement of Section 232 tariffs will support domestic prices for flat steel in Europe but the impact is likely to be limited, sources told Fastmarkets.
On October 30, the US and the EU
agreed to replace Section 232 steel and aluminium tariffs against the bloc's 27 countries with tariff-rate quotas.
The decision is likely to increase exports from the EU to the US, leading to reduced domestic supply and higher prices in Europe.
A majority of market sources believe that the short-term positive impact will help to increase prices in Europe, but the situation is unlikely to have a long-lasting effect.
"European mills will definitely enter negotiations with their long-term buyers with more confidence after the announcement. This, combined with other factors, such as rising energy and emission costs as well as demand recovery driven by re-stocking, will result in some price recovery. The question is - how long will it last?" a German distributor said.
"The mills [in Europe] will try to export more, this might give some support during negotiations in November, but I...