Day: 10 October 2025

European hot rolled coil (HRC) prices have remained mostly stable this week, as market players remained cautious after the European Commission (EC) proposed major changes to current steel import safeguards.

Alongside the ongoing implementation of CBAM, sources described the market as being in a “state of turbulence” with many participants uncertain about future trade conditions. Given this situation, there are currently very few import offers for HRC, as both buyers and sellers adopt a wait-and-see approach.

Local mills in northern Europe are reported to be targeting €600-610/mt ex-works for new orders for December deliveries, the same as last week, though the tradable price level has remained at €570-580/mt ex-works in the north of Europe, with a few market insiders reporting transactions at the abovementioned levels.

Meanwhile, in Italy, indicative offers from mills have remained at €570-580/mt ex-works for November and December delivery, while the tradable price level has remained at €540-550/mt ex-works, with no sizable deals reported this week.

According to sources, market insiders expect local mills to raise their offers in the coming weeks, taking advantage of tighter import conditions under the proposed regulations. “Demand will be same, but local prices will go up, so most market insiders predict fewer sales and less consumption,” a trader in Spain told SteelOrbis. “Prices are likely move up to €600/mt ex-works in Italy,” another source said.

Notably, as SteelOrbis reported earlier this week, the EC’s new plan includes a cut of around 47 percent in tariff-free import quotas and a 50 percent duty on volumes exceeding the new limits. It also introduces a “melt and pour” rule to verify the real origin of imported steel, making it harder for material to be relabelled or transhipped through third countries. The proposal still needs approval from the European Parliament and Council and is expected to take effect in mid-2026, when the existing safeguards expire.

The market reaction has been mixed. Some sources said the move shows that the Commission is trying to protect the EU steel industry and that prices could rise later. Others, however, called the measures unfair, saying they favour steelmakers while hurting importers and manufacturers who rely on cheaper foreign material.

“No one is really in the import market right now because of the safeguard review,” a market insider told SteelOrbis, adding, “The last import offers we heard were from Turkey at around €510–520/mt CFR, and from Indonesia at similar levels, but no orders were placed.”

Indicative offers for import HRC have been reported in the range of €500-530/mt CFR, depending on the origin.

“Countries like Spain and Italy will be affected the most by the new safeguard regulations as they need imports to stay competitive. If quotas are cut in half, it’s going to be a disaster especially for small businesses,” another source said.

According to sources, if the proposed rules are confirmed, with quotas reduced and out-of-quota duties set at 50 percent, European mills could again try to raise domestic HRC prices for first quarter deliveries.

Spanish steel association Unión de Empresas Siderúrgicas (Unesid) views “very positively” the proposal presented by the European Commission for a new trade measure to replace steel safeguards.

Unesid is calling for the scope to be extended to protect downstream products and the entire value chain of the sector, Kallanish notes.

In a statement, the organisation highlights this is a decisive step to ensuring competitiveness, sustainability and employment in the Spanish and European steel industry. It is urging the rapid adoption of the regulation so that it enters into force at the beginning of 2026.

“The EC [European Commission]’s proposal is ambitious and much needed,” comments Unesid general director Carola Hermoso. “It restores a framework for competition, boosts capacity utilisation, offers stability and confidence to investments, and is essential to secure the future of European steel and the thousands of jobs that depend on it.”

The new framework brings certainty and predictability to a strategic sector for Europe’s industrial autonomy and green transition, while consolidating investments in decarbonisation, innovation and energy efficiency, according to the EC proposal (see Kallanish 8 October).

“The measure offers an opportunity to restore the competitiveness of the sector as an essential pillar of Europe’s economic, industrial and environmental development,“ Hermoso concludes.

Todor Kirkov Bulgaria

kallanish.com

The European Automobile Manufacturers’ Association (ACEA) has expressed concern over the inflationary impact that the continued application of EU steel safeguard measures could have on European market prices, Kallanish notes.

In response to the European Commission’s new trade measure proposal, the association says it does no contest “the need for some level of protection for a commodity industry like steel”. ACEA director Sigrid de Vries notes: “But we feel that the parameters as proposed by the Commission go too far in ring-fencing the European market. We need to find a better balance between the needs of European producers and users of steel in this measure.”

European carmakers source around 90% of their steel needs in Europe. However, the sharp reduction of import quotas and the doubling of the out-of-quota tariff to 50% would significantly limit the ability to ease market pressure through imports. Moreover, the introduction of a new rule of origin based on the “melt and pour” principle would further restrict import flows while creating a substantial administrative burden for European users of imported steel products.

Despite a strong reliance on domestic steel, the car sector still depends on specific imported grades and qualities. Quotas for automotive steel have been consistently exhausted within weeks throughout the seven years of the current safeguard regime, ACEA warns. It urges the Commission to recognise the complexity of applying the “melt and pour” rule of origin across “deep, global” supply chains, where tracing the production route of steel is often impractical and risks disrupting established manufacturing processes.

Meanwhile, according to Transport & Environment (T&E), Europe’s leading clean transport and energy group, a leaked position paper from ACEA shows that European carmakers are asking for a series of loopholes in the EU car CO2 law. These changes would cut in half the EU’s target of selling only zero-emission cars by 2035.

ACEA is allegedly calling for more than ten exemptions, including allowing the use of alternative fuels and changing how zero-emission cars are counted. The association also wants the EU to stop updating how it measures emissions from plug-in hybrids.

T&E says that scrapping the 2027 “utility factor” for plug-in hybrids would reduce electric car sales by about 10%. Extra credits for cleaner production methods, certain technologies, and counting small EVs as more than one sale, with bonus credits for those made in Europe, would further weaken the overall target.

Natalia Capra France

kallanish.com

Beyond the initial goal of reducing low-priced steel imports into the EU, the European Commission’s new proposed trade measure can be seen as a signal to the US that the EU wants to pursue the idea of a closed US-EU steel trading club, Kallanish notes.

This comes as EU-US negotiations on the Global Arrangement on Sustainable Steel and Aluminium (GASSA) during the Joe Biden presidency were abruptly ended by the Trump administration’s re-imposition of Section 232 tariffs. The EU and US agreed a deal in July to reduce certain tariffs on EU-origin imports into the US, but steel remains levied at 50%.

While announcing its proposal on Tuesday to cut steel tariff-free quotas by almost half and raise out-of-quota tariffs to 50%, the European Commission made sure to point out it “shares many of the concerns of the US on this sector”.

In its Q&A sheet related to the new measures, it notes: “Both sides are aware of the importance of addressing the negative trade-related effects of global overcapacity. The Union is ready to work with like-minded countries with a view to ring-fencing their economies from global overcapacity while ensuring secure supply chains and increasing market access among them. We will continue exploring ways of working together with the US to achieve a successful outcome.”

Any future trading pact may include other “like-minded” countries such as the UK, whose steel industry fears the new EU trade measure represents an “existential crisis” (see Kallanish passim).

However, any agreement would need a justifiable purpose, in order to avoid trade tensions with other trading partners. While GASSA’s main focus was on sustainable steel, it is difficult to imagine the Trump administration will prioritise this approach. A more likely focus will be economic security amid global fragmentation.

Responding to concerns over the legality of the new trade measure, meanwhile, the Commission said a WTO member can take legitimate action – such as increasing its tariff commitments under WTO – in compliance with the rules under GATT Article XXVIII. But in doing so, other countries may be entitled to compensation or retaliation.

“Stakeholders, including third country governments, were invited to express their views on the EU’s proposal, but few countries availed themselves of this opportunity. Of those that did, several acknowledged the rationale for the EU to act against overcapacity,” the Commission notes.

The new measure aims to increase EU steel capacity utilisation to 80%. As for its impact on buyers, “the market will need to adjust to the new reality in the coming months, but we consider that the level of tariff quota combined with the existing capacity available in the EU would be sufficient to supply the EU market,” the Commission says. “In addition, the measure allows for the adjustment of volumes, including for specific product categories, should supply concerns arise including through an urgency procedure.”

As for its impact on FTA partners, the Commission will discuss solutions with each partner. However, “an exclusion of FTA partners’ imports is not possible. They represent two thirds of total imports, some of which contribute to overcapacity, and such an exclusion would make the measure totally ineffective,” it concludes.

Adam Smith Austria

kallanish.com

The European Commission released its official proposals for its rework of the EU’s steel protection framework 7 October, detailing extensive cuts variable across product category volumes.

The official proposals largely mirror the changes recommended in the draft proposals revealed by McCloskey last week, and now include annexes detailing the CN code categorization of steel products and their respective allocation of the overall quota volume of 18,345,922 tons – a total reduction of 47%.

The out-of-quota duty for steel imports will increase – potentially permanently due to formulation as a new law – to 50%, and specific allocation to country-specific quotas, which will be established via subsequent implementing regulations on the basis of negotiations with World Trade Organization (WTO) members, will be subject to a ‘melted and poured’ clause ensuring that allocations match the origin in of primary steelmaking.

Specific allocations by product category under the new framework, alongside a comparison to the total country-specific and other countries quotas for each product category in year eight of the existing safeguard system, are detailed in the appendix below.

Trade defense measures already in place – namely anti-dumping and anti-subsidy duties – will continue to apply in addition to the new measures.

The date of implementation will be 20 days following publication in the Official Journal of the European Union, but is signaled to take effect from July when current protections lapse, due to the lead time inherent to consulting with World Trade Organization (WTO) partners and the EU’s comitology process.

The official proposals are also packaged alongside the Commission’s staff working document assessing both the potential impact of the measures and a variety of alternative strategies.

The staff working document evidences that the majority of consulted stakeholders were in support of the direction the European Commission has ultimately taken, but the margin was very close for some provisions, including the doubling of the out-of-quota duty level to 50% (57.6% of respondents in support); the elimination of the carry-over mechanism (53% support); and the permanent duration of the measures (57% support).

Other elements received stronger majority support, including the formulation of the protections as a tariff-rate quota framework (88% support); universal application across all exporting origins (“a large majority”); the inclusion of the ‘melted and poured’ clause (77.5% support); and the fundamental necessity of the measures (75.1% support).

Communications from the Commission accompanying its documented proposals illustrate that the significant cuts to the quotas are intended to give sufficient room for our industry to reach healthier capacity utilization levels of 80%, versus the cited current level of “around 67%,” and are designed – or at least intended – to be compliant with WTO rules.

The European Economic Area (EEA) countries will not be subject to the measures – and the Commission details that Free Trade Agreement partners more generally will be involved in discussions on the implications of the proposal, within the context of finding a “collective solution to the global overcapacity problem.”

Importantly however, the Commission stresses the “need to be realistic,” stating that “an exclusion of FTA partners’ imports is not possible. They represent 2/3 of total imports, some of which contribute to overcapacity, and such an exclusion would make the measure totally ineffective.”

As relates to Trump’s US administration and the US-EU framework trade deal agreed in the summer, the Commission emphasizes that its measure is “unilateral,” and based on the European Steel and Metals Action Plan, “which predates the EU-US Joint Statement.”

“However, the Commission shares many of the concerns of the US on this sector,” says the Commission. EU exports to the US continue to be subject to a 50% tariff rate, though the US-EU framework trade deal indicated parties would work together to establish duty-free quotas for the bloc’s steel exports.

Benjamin Steven Journalist, Steel

opisnet.com