The COVID-19 pandemic may have given additional impetus and momentum to protectionism in steel markets, which has been rising steadily around the world since the global financial crisis of 2008-09 and looks set to continue that way, World Steel Association Director General Edwin Basson said in an interview with S&P Global
Platts June 17.
The pandemic has broken some supply chains which may become more regional, less global and potentially less efficient, the worldsteel director said. Governments therefore need to take care not to introduce unilateral measures to protect industry that will unbalance the so-called "level playing field" in global steelmaking, Basson told Platts' commodities reporters.
"I think we may very well see a continued shift towards that (protectionist activities in steel markets)," he said. "We are seeing a rollback on this globalization idea... intensifying from way back just after the great financial crisis. What we see now is not a new trend. The pandemic may have put some additional impetus or awareness. This process of rolling back free markets has been in place for a decade or more."
Worldsteel is one of the world's largest industrial associations, whose members represent around 85% of global steel production.
"The best market is one that is as free from interference as possible," Basson said, noting that protection of producers always ends up costing someone something, whether that is a government or a consumer, and generally pushes commodity prices up. "What we need is a rule-based system, with principles such as those of the World Trade Organisation, which makes the position clear: where we run into trouble is where we have unilateral actions."