U.S. 50% Tariff! Heavy Blow to Global Stainless Steel, Orders Face a "Survival Test"

On September 22, Finnish steelmaker Outokumpu revealed to Reuters that due to US import tariffs of up to 50%, at least one-third of the companies surveyed had suspended or postponed stainless steel orders, and over half were urgently re-evaluating their procurement strategies, indicating a significant shock to the global stainless steel supply chain.

In an interview, Outokumpu's President and CEO, Kati ter Horst, pointed out that global demand continues to slow, while the EU's current steel import quotas are already significantly too high. She anticipates that the European Commission will introduce new measures in October to restrict steel imports from competitors, thereby protecting local steel producers. These new measures will replace the current safeguard measures due to expire in the summer of 2026 and are expected to take effect a quarter ahead of schedule.

The ripple effects of the tariffs are gradually becoming apparent. Ter Horst revealed that by May of this year, one-third of companies had already switched steel suppliers due to cost pressures. In August, the US further included hundreds of stainless steel derivative products in the tariff list, creating significant uncertainty for equipment and machinery purchasers and leading to widespread delays in order decisions.

It is worth noting that Outokumpu holds a unique advantage upstream in the supply chain – it operates the only chromium mine in Europe and North America. Chromium, a key mineral for manufacturing stainless steel, is currently exempt from US tariffs. Building on this, the company has developed a low-emission alloy with a chromium content of up to 99%, a significant increase from the 53% chromium content in its previous product. Ter Horst stated that the company also plans to scale up production from the current one kilogram per day to one ton per day at a pilot plant soon to be established.

Against the broader industry backdrop, affected by sluggish global demand and high energy costs, green steel projects in many parts of Europe have been forced to delay or cancel. EU lawmakers believe that import quota adjustments and the Carbon Border Adjustment Mechanism (CBAM) will be key to breaking the impasse – the latter aims to assist the steel industry's decarbonization by levying a border fee on the carbon dioxide emissions embedded in imported steel.

Despite short-term headwinds from tariffs and demand, Ter Horst remains optimistic about the long-term development trend of stainless steel. She explained that the global annual cost of metal corrosion totals as high as $2.5 trillion, coupled with countries' escalating pursuit of climate goals. Purchasers generally perceive stainless steel as more sustainable and stronger than ordinary steel, indicating continued potential for demand growth.

Furthermore, the increase in global defense spending also provides important support for the stainless steel industry.