Category: Latest Updates

On October 7, the European Commission proposed new trade measures in an attempt to protect the domestic steel sector.

Under the new plan, only 18.3 million tonnes per year of steel would enter the EU without being subject to tariffs. Steel shipments exceeding that volume would face duty at 50%.

For comparison, carbon steel imports into the EU in 2024 amounted to 26.36 million tonnes, up by 6.4% from 2023’s 24.78 million tonnes, according to European steel association Eurofer.

Steelmakers support new measures
Eurofer supported the new trade measures, claiming that they “respond to the needs of the sector and represent a real lifeline for EU steelmakers and steelworkers.”

“This trade measure is vital to preserve not just the sector and its workforce, but the very backbone of EU industrial independence and the green transition,” Eurofer director general Axel Eggert said on October 7.

The association has lobbied for an increase in the out-of-quota tariff to 50% from the current 25%, and spoken in favor of quota cuts.

Overall, feedback from Europe’s steelmakers was positive, with one mill source expressing hopes that the proposed measures would help to increase capacity utilization rates and protect the industry.

“It’s a necessary step if we want to have steelmaking in Europe,” the mill source said.

Leading European steelmaker ArcelorMittal also welcomed the measures.

“ArcelorMittal and the European steel producers have been heard,” Geert Van Poelvoorde, chief executive officer of ArcelorMittal Europe, said. “Today, we can breathe a sigh of relief, with the European Commission’s announcement of the new, strengthened tariff quota proposal. We thank the Commissioners for the time and attention they have taken to understand the challenges facing our industry.”

Strong opposition from traders, distributors, processors
The reaction from steel traders and processors was markedly negative, however. Market participants told Fastmarkets that the proposal came as a shock, given the heavy reliance on imported material to supply downstream industries.

“This move will drastically limit availability and drive-up costs for processors and end-users,” one trader said. “I feel that the European Commission only takes into consideration the interests of steelmakers, forgetting that we also have a steel processing industry.”

Another market source described the proposal as “a severe blow to competitiveness,” adding that “the EU risks creating shortages and price distortions across key value chains.”

“Nobody can buy 100% domestic or 100% imported steel,” a steel service center source said. “We need options, we need variety to maintain competitiveness.”

The Italian steel distributors association, Assofermet, expressed strong opposition to the European Commission’s proposed new trade measures, saying that they would “unfairly protect EU steel producers at the expense of distributors, processors and manufacturing industries,” according to a statement released on October 8.

In the same statement, the group said that the 50% out-of-quota tariff and broad quota cuts would effectively close import channels and create a “captive market” for EU producers, leading to higher prices and a loss of competitiveness for Europe’s manufacturing base.

Assofermet warned that excessive protectionism could push manufacturers to relocate production outside the EU, and urged policymakers instead to focus on stimulating domestic steel demand.

European steel distributors’ association Eurometal has previously expressed concerns about loopholes in the EU’s trade and carbon frameworks, warning that growing volumes of steel-intensive derivative imports were bypassing both safeguard measures and the upcoming Carbon Border Adjustment Mechanism (CBAM).

The group said that steel derivatives imports – such as machinery parts and prefabricated metal structures – threatened to undermine EU industry competitiveness, quietly displacing domestic manufacturing and threatening millions of jobs.

“The European Commission is linking its steel measures to those of the US,” Eurometal president Alexander Julius said on October 8. “[But] they are completely ignoring [the fact of] the US increasing inclusion of steel derivatives taxed [at] 50% and the result that those volumes may be re-directed to the EU, worsening the current effects on European manufacturing.”

Immediate effect on market
While most sector sources agreed that there would be no immediate effect on the market, because the new measures were expected to come into effect in mid-2026, everyone agreed that the new measures were a “ticking time bomb.”

But some noted a lack of clarity regarding the timeline for the implementation of the measures.

According to the European Commission, “once adopted by the Council and Parliament, the measure will replace the EU’s safeguard on steel, when it expires in June 2026.” This suggested that the new trade regime would come into force in July 2026, replacing the existing safeguards.

Earlier this year, however, several EU member states pushed for an early termination of the current safeguard measures, urging that the new framework be introduced as early as the beginning of 2026.

This has left the market questioning whether the new trade measures could, in fact, be imposed early next year.

Sources familiar with the matter, however, said that an early termination of the current safeguard system was “unlikely” and “probably not even legally possible.”

Meanwhile, other market sources were trying to estimate the effects of new measures for different market sectors, with most of the feedback suggesting that there would be no immediate effect.

“The first question is, obviously, what will be the implementation period – first quarter? Second quarter? Third quarter? The further [into the future], the lower the possible support for European prices,” a mill source in Southern Europe said.

Hot-rolled coil
Sources in the European hot-rolled coil market told Fastmarkets that European mills might make another attempt to raise domestic prices for first-quarter 2026 deliveries, expecting fewer imports due to CBAM and safeguard effects.

“We expect that prices will definitely go up,” a buyer in Germany said. “The regulations are made to protect the steel industry. The European Commission is on its [mission] to protect the steel industry. This also has incentives for green steel, because if prices become attractive, it will increase investments for green steel.”

“I expect that prices will start increasing slightly,” a buyer in Italy said, “because importing has become too difficult, and with the new safeguards there will not be enough steel for everybody.”

One supplier indicated that a price of €650 ($756) per tonne ex-works was viable for January-delivery HRC, but admitted that demand was not supportive of such an increase just yet. Fastmarkets’ calculation of the steel hot-rolled coil index, domestic, exw Northern Europe, averaged €567.15 per tonne in the third quarter of this year.

“Demand is not strong enough to support a €50, €60 per tonne rise,” a distributor source said. “Besides, there is no shortage of HRC in the market. Buyers rushed to book imported HRC for delivery in the third and fourth quarters of 2025 [before CBAM and new safeguard measures take effect] and booked sufficient volumes from domestic mills.”

Another source agreed that increasing prices would be difficult, considering poor market fundamentals and sufficient supply.

“There is no need to ‘go strong’ on repurchasing, due to previous purchases in July and still-high stock levels, compared with activity,” a buyer in Italy said.

Fastmarkets’ latest daily calculation of the steel HRC index, domestic, exw Northern Europe, was €578.75 per tonne on October 8, up by €3.75 per tonne from €575.00 per tonne on October 7.

The Northern European index has increased by €3.75 per tonne week on week and by €1.67 per tonne month on month.

Plate
While many sources in the steel plate market said that there would be “no immediate effect” arising from the EC framework, others had a bullish outlook on the expectation that mills would raise offer prices because of the import cost and trade uncertainty.

“[The price of steel] plate has not moved up yet,” a buyer in Germany said. “On Tuesday, the EU announced new measures, so for sure the prices will increase. What normally happens is that European mills increase their prices based only on the fact that nobody will import due to the uncertainty around what they will have to pay in extras.”

“Prices are [still] flat,” another buyer in Germany said, “but I think we will see a price increase by end of the week [on October 10], with re-rollers facing a higher order intake, especially in South Europe, due to tariffs and CBAM.”

One source also noted that current quota volumes available under existing safeguards had “legacy volumes” from Ukraine, so the effective reduction under the proposed new measures would be around 50%.

Ukraine used to be a major supplier of steel plate to the EU, with deliveries of such material from the nation accounting for nearly half of the total plate imports into the bloc.

Ukraine’s key plate-producing assets were Metinvest’s plants in Mariupol – Azovstal and Ilyich Iron & Steel. But as a result of Russia’s invasion, Metinvest has lost control of both these units.

“The effective plate quota today is around 2.2 million tonnes [official figure, 3.2 million tonnes, of which 1 million tonnes would be from Ukraine],” a source in Italy said. “You should not consider the legacy figure for Ukraine because there is no production in the country. So the effective reduction in the plate quota will be about 50%.”

Fastmarkets’ most recent weekly price assessment for steel domestic plate, 8-40mm, exw Northern Europe, was €620-655 per tonne on October 2, flat from a week before.

Rebar, wire rod
One of the major importers of long steel in Europe said that it was too early to gauge the effects of the proposed measures on domestic prices and that “local mills have not reacted yet with price changes.”

“Maybe next week will be more representative,” he added.

Fastmarkets’ weekly price assessment for steel reinforcing bar (rebar), domestic, delivered Northern Europe, widened to €590-620 per tonne on October 8 from €600-615 per tonne on October 1, but the midpoint dipped only slightly to €605.00 per tonne from €607.50 per tonne.

And the corresponding weekly price assessment for steel reinforcing bar (rebar), domestic, ex-works Italy, remained at €510-550 per tonne on October 9.

“The new measure is not adopted yet,” the importer said. “It needs to go through the approval [process] and it still lacks detail. For instance, whether quotas will be country-specific, and when exactly the change will take place. There will be more clarity in around a month’s time. From what I heard, Eurofer is pushing for the new measures to come into force from January 1, 2026.”

Market sources said that price changes would be tangible closer to the end of 2025, due to CBAM coming into force from January 1. Until then, major price changes were not expected in the long steel sector due to the lack of support from the demand side. The latter factor was said to be making the domestic long steel trade more back-to-back, instead of long-term purchases being planned.

“The reason why local steelmakers are pushing so much for stricter safeguard measures is clear,” a trading source said, “because mills make losses with current prices. But along with that, Europe needs to think about the ways in which the region’s economy could be boosted.”

The same source added that the new proposed measures would decrease the number of traders in the European market, because small companies will not be able to survive the losses that were expected to accompany import trading, with the uncertainty connected to CBAM and the proposed new import regime.

He said: “Only big companies with enough capital will be able to play this risk game.”

On October 7, the European Commission revealed the highly anticipated replacement of the current safeguard system for the European steel industry, in which the free-of-duty tariff quotas are reduced by leveraging 2013 levels as a benchmark and the tariffs after exhaustion are raised to 50 percent, in line with global tariff levels.

As previously reported by SteelOrbis, the proposal also includes the “melt and pour” rule, discussed in length since its introduction in the “Steel and Metals Action Plan”, where imports will be subject to verification of origin. In the last two days, European steel producers have welcomed the new framework, while some other parties have expressed their dissatisfaction or outright rejection.

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