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Asia Steel Market Braces for Potential Supply Disruptions Amid EU-US Tariff Tensions: July 2025

Asia’s steel market faces increasing uncertainty driven by escalating EU-US trade tensions, as indicated by news articles “EU arbeitete an Gegenzöllen für die USA“, “Nach Trump-Brief: EU legt neue Liste für Gegenzölle vor“, “Zollstreit mit den USA: Was droht der deutschen Wirtschaft?“, and “Trumps US-Zölle im Liveticker: Merz: Brauchen im Zollstreit schnell eine Lösung | FAZ“. While these articles primarily discuss EU-US relations, their impact on global trade flows raises concerns about potential shifts in demand and supply dynamics within Asia. However, no direct relationship can be established between the EU-US trade tensions reported in these articles and the specific activity levels observed at the three Asian steel plants under review.

Bar chart and satellite map of steel production activity in Asia

The mean steel plant activity in Asia shows a significant decline in July 2025, dropping to 26.0% from 39.0% in June.

Ansteel Group Chaoyang Steel & Iron Co., Ltd., located in Liaoning, China, is an integrated steel plant with a crude steel capacity of 2.1 million tonnes per annum (mtpa), primarily utilizing BOF technology and relying on BF iron production. The plant’s activity has remained relatively stable in recent months, with a slight increase to 77.0% in July 2025. This is in contrast to the overall downward trend of steel activities in Asia. There is no direct evidence linking this plant’s activity to the EU-US tariff news.

Jiangsu Xugang Iron and Steel Group Co., Ltd., situated in Jiangsu, China, is another integrated steel plant with a crude steel capacity of 3.05 mtpa, also based on BF-BOF process. The plant’s activity shows a significant increase, reaching 84.0% in July 2025, significantly above the Asian average. Like Ansteel, no direct connection can be established between this activity and the EU-US tariff news.

Dexin Steel Morowali plant in Central Sulawesi, Indonesia, has a crude steel capacity of 3.5 mtpa, utilizing integrated BF-BOF production. The plant exhibits a consistent decline in activity, dropping to 30.0% in July 2025, well below the Asian average, but its activity patterns predate and do not directly correlate with the EU-US news reports.

Given the observed decline in average Asian steel plant activity alongside escalating global trade tensions, steel buyers and market analysts should consider the following procurement actions:

  • Monitor Inventory Levels: Closely track domestic and regional inventory levels, anticipating potential supply chain disruptions, especially from Indonesian suppliers.
  • Diversify Sourcing: Explore alternative sourcing options within Asia, particularly from plants like Jiangsu Xugang Iron and Steel Group Co., Ltd., which show rising production.
  • Negotiate Contract Terms: Review existing contracts and negotiate flexible terms with suppliers to mitigate risks associated with potential price volatility and supply uncertainty.
  • Focus on Chinese Suppliers: Given that Chinese plants, Ansteel Group and Jiangsu Xugang Iron and Steel Group, maintain or increase their production, they could represent a viable source of steel in a disrupted market.