SHFE 1709 Nickel Closes Higher (2017-6-22)

According to EUROMETAL reports, the European automotive components sector faces mounting pressure from Chinese competition, rising imports, and stagnant growth. At the EUROMETAL Steel Day, Autoliv's Cosmin Bakai noted global light vehicle production will grow ~1.3% by 2030, but Europe remains weak. While Chinese automakers plan facilities in Europe, initial capacities (50,000-100,000 units) won't immediately drive major local steel demand. Crucially, component trade is outpacing vehicle trade; Chinese component imports to the EU doubled over three years to $8 billion. Meanwhile, $11 billion in EU component exports to the US face tariff pressures. Consequently, the short-to-medium-term outlook for European automotive steel demand remains bleak.

According to EUROMETAL reports, the EU will implement a permanent steel trade measure on July 1, 2026, replacing the expiring safeguard system. The new framework drastically tightens import protections by slashing the annual quota volume by 47% (from ~34M mt to 18.3M mt) and doubling the out-of-quota tariff to 50%. A strict "melt and pour" rule will also be introduced, requiring importers to prove where the steel was originally melted and cast to access country-specific quotas, significantly increasing customs complexity. This permanent measure applies to all non-EEA nations, removing previous exemptions for developing countries and FTA partners. Legal experts warn this aggressive protectionist shift could provoke retaliatory countermeasures if negotiations fail.

According to EUROMETAL, European stainless steel flat product prices are climbing steadily, driven by soaring scrap costs, extended mill lead times, and a sharp decline in imports resulting from the CBAM and upcoming safeguard measures. For May delivery, Cold Rolled Coil (CRC) deals are settling between $2,877 and $2,960/tonne, while Hot Rolled Coil (HRC) is trading around $2,645 to $2,702/tonne. Producers, facing tight scrap supplies—with 304 scrap expected to exceed $1,610/tonne in April—are already pushing June CRC offers to $2,990/tonne, with projections hitting $3,105/tonne by June/July to offset squeezed margins. Despite these hikes, downstream demand remains largely subdued as buyers struggle to absorb the higher costs.