Market evolution: Galvanized steel sheet (CN 721049) — 2015–2025

Introduction

This report analyzes the trade dynamics of the European Union for flat-rolled steel products classified under customs code 721049 over the period 2015-2025. The data reveals a fundamental transformation in the EU's market position, shifting from a near-balanced trade relationship to a state of significant import dependence. This evolution was driven by a combination of declining domestic production, a reorientation of global supply chains, and episodes of extreme price volatility, culminating in a structurally altered and more vulnerable market by the end of the decade.

1. The Pivot to a Sustained Trade Deficit

The period was marked by a dramatic reversal in the EU's trade balance for this product, moving from a modest surplus to a large and sustained deficit. This structural shift was driven by diverging trajectories in exports and imports.

Exports contracted sharply while imports surged

EU export volumes fell by over half, from approximately 2.37 million tonnes in 2015 to 1.17 million tonnes by 2025, a decline of 50.8%. In contrast, import volumes grew by 71.7%, rising from 2.16 million tonnes to 3.71 million tonnes. The value figures tell a similar story: export value decreased by 27.7% to EUR 1.01 billion, while import value more than doubled, increasing by 127.9% to EUR 2.75 billion.

The trade balance moved decisively into negative territory

As a direct consequence of these divergent trends, the EU's trade balance for CN 721049 collapsed. It moved from a positive balance of EUR 192 million in 2015 to a deficit of EUR -1.74 billion in 2025, representing a negative shift of over 1000%. The deficit peaked at EUR -3.38 billion, highlighting the depth of the structural change.

Key export destinations weakened while new import partners emerged

The decline in exports was widespread, with volumes to the United States falling by 56.9% and to the United Kingdom, the EU's largest export market, decreasing by 46.6%. Simultaneously, the landscape of import suppliers was reshaped. While traditional suppliers like China saw their import value fall by 38.5%, new or significantly scaled-up sources emerged:

(Source: Trade by partner)

This data indicates a strategic diversification of EU import sourcing away from China and towards other Asian and regional producers.

2. Contraction of Domestic Production and Market Reorientation

The rise in import dependency coincided with a significant reduction in EU domestic production of this steel grade, suggesting a possible specialization shift or competitive pressure.

EU production volumes plummeted

Production quantities (in kilograms) fell dramatically by 62.6%, from 31.24 billion kg in the first year of the data window to 11.70 billion kg in the last. This is a steeper decline than the fall in export volumes, indicating that the EU's capacity for this specific product was shrinking faster than its export footprint.

The production mix shifted towards higher value

Despite the collapse in volume, the value of EU production showed resilience, increasing by 9.5% from EUR 10.23 billion to EUR 11.20 billion. This suggests a reorientation of production towards higher-value-added or more specialized steel products within the broader category.

Market concentration of imports diversified, but export concentration remained stable

The Herfindahl-Hirschman Index (HHI) for imports, a measure of supplier concentration, fell sharply from 3,171 to 1,168, indicating a much less concentrated and more diversified import market in 2025. In contrast, the HHI for exports fell only moderately from 1,810 to 1,412. This suggests that while the EU successfully diversified its sources of supply, its export market remained focused on a narrower group of partners.

(Source: Market concentration)

3. Heightened Volatility and Structural Vulnerability

The market experienced significant price swings and exposed the EU's growing vulnerability to external supply shocks, as measured by trade intensity and import reliance indicators.

Price volatility was high, with sharp shocks in 2021

Unit prices for both imports and exports were volatile, peaking in 2021-2022 before retreating. The data identifies specific supply shocks, most notably a series of abnormal price increases for exports to Egypt, Pakistan, and Türkiye centered on 2021. For example, the export price to Türkiye jumped by 42.4% in that year, a period likely affected by global supply chain disruptions and the post-pandemic recovery.

The EU's net import reliance tripled

The net import reliance metric, which gauges the economy's dependence on foreign suppliers, rose from 5.2% in 2015 to 16.3% in 2025, a 213.4% increase. This confirms the structural shift towards dependency. Furthermore, the trade intensity (the ratio of trade to production) increased by 16.3% to 32.0%, underscoring the market's growing openness and integration with global flows.

Export propensity declined, signaling a loss of competitiveness

Export propensity—the share of domestic production that is exported—fell from 13.7% to 11.2%, a decline of 18.1%. This metric shows the most significant negative change among the key vulnerability indicators. It points to a reduced international competitiveness of EU-based production for this specific steel product, likely due to a combination of the production volume decline and the increased availability of competitive imports.

Conclusion

The EU market for flat-rolled steel products under CN 721049 underwent a profound structural transformation between 2015 and 2025. The era ended with the EU as a major net importer, a stark contrast to the relative balance at the start of the period. This shift was catalyzed by a sharp contraction in domestic production volumes, coupled with a strategic diversification of import suppliers away from China towards countries like Türkiye, Vietnam, and Taiwan. While this diversification reduced concentration risk on the import side, it did not prevent a tripling of overall import reliance, leaving the EU moreThe request was rejected because it was considered high risk