EU safeguard proposals disappoint steel stainless sector
The European Commission’s safeguard measure review has not met the expectations of the EU’s stainless steel mills or processors.
Sources were reacting to a European Commission document leaked on Tuesday, which was then confirmed in a WTO notification on Wednesday.
The proposed amendments to EU safeguards include new caps for carbon steel, but there appears to be no indication of additional import restrictions for stainless steel coils and long products.
A stainless steel bar manufacturer voiced their apprehension about the insufficient protective measures against lower-priced products from Asia, especially from India. Eurofer is reportedly gearing up to address the proposals. The Commission is holding a consultation period on 11-18 March.
The outlook for future European price increases for stainless bar appears uncertain. A continued material influx from other countries into Europe is likely to reduce domestic sales and maintain compressed margins in the market.
The safeguard quotas for stainless coil and other flat products remain unchanged, with the existing quotas still in effect. A prominent steel processor and a steel producer, who communicated with Kallanish shortly before the document was leaked, had expressed optimism that the announcement would catalyse an increase in flats prices.
The current concern, however, is that the increase attempts in Europe may not gain sufficient traction, leading customers to persist with purchasing lower-cost material from Asia. According to two sources, stainless sheet prices in Europe continue to be comparatively low when assessed against the cost of cold rolled coil feedstock. Sheet is at approximately €2,600/tonne ($2,840) ex-works, while European CRC at €2,500/t for May delivery indicates a constrained environment for margins and profitability.
“I believe the Commission has now expressed a firm political will on import restrictions. The EU must want to preserve the relationship with Asian countries, particularly when the rapport with the US has become tricky. Regarding stainless, the [leaked] document represents 40 pages of nothing. This will strongly impact the sector that has suffered months of unsustainable margins. This represents a significant setback for producers but also for the downstream, as it is unlikely that coils derivatives will increase,” a coil buyer comments.
Import restrictions will continue to apply to nations such as China and Taiwan; however, there has been no implementation of a cap. This quarter, multiple buyers have acquired CRC from various Asian sources, notably Korea.
The Commission has proposed that carbon steel products that have experienced severe import surges receive additional restrictions such as new quota caps and revising the administration of unused quotas. Adjustments also include reducing liberalisation rates from 1% to 0.1%, to slow tariff-rate quota (TRQ) expansion and ensure a better balance with market demand.
Natalia Capra France
Klöckner sports new image as metals processor company
Klöckner & Co is promoting a new image as it is developing from a steel distributor to a service centre and higher value-added business company.
The German-based group “is seen as a steel distributor, but actually we have become a metals processor company,” chief executive Guido Kerkhoff said during a conference call on Wednesday.
The company has in recent years significantly shifted its focus to its higher-value processing and metalworking business in its core markets of North America and the DACH region – Germany, Austria and Switzerland. It divested the distribution-only sites in western Europe and in Brazil. In 2024, the group already generated over 80% of its sales from the steel service centre and higher value-added business.
Through targeted investments, distribution centres were transformed into production and processing hubs for higher-value metal solutions, Kerkhoff pointed out. “Despite the difficult environment last year, we have continued our investments, rather than postponing them, which sent a positive signal,” he said.
In Switzerland, a country with a night ban for road haulage, the company optimised logistic links between railway and road haulage, using trains at night, and reloading to trucks for close-range delivery in the morning. That allowed it to close several warehouses used only for close-range distribution.
The group’s many activities in North America, especially, have spurred the development, Kallanish heard Kerkhoff say during the call. One major move there currently is the firm’s investment in a flat-rolled aluminium processing facility on the campus of Aluminum Dynamics LLC (ADL), a subsidiary of Steel Dynamics Inc. (SDI).
Another signal for Klöckner’s new image is the relocation from Duisburg to Düsseldorf, although it did not highlight this during the call. Duisburg, the unofficial capital of Germany’s rust belt, was Klöckner’s headquarters for decades. Along with the demise of the city’s steel industry and overall social environment, Klöckner moved to a new home in Düsseldorf last year, a city known for arts, fashion, and techno culture.
Christian Koehl Germany
Italian plate prices mainly flat; imports from South Korea to take a major hit from new safeguards
Italy
In Italy, offers for S275 heavy plate were reported by buyers and sellers at €660-670 ($719-730) per tonne ex-works, stable week on week.
Transactions for such material were heard at lower levels of €640-650 per tonne ex-works. One supplier reported having sealed a deal for a minor tonnage at €660 per tonne ex-works.
The cost of import slab – the key feedstock for plate production – was stable at $500-530 per tonne CFR. But due to the US dollar depreciation against the euro, rerollers felt more “comfortable” maintaining heavy plate prices at €640-650 per tonne ex-works.
Fastmarkets’ weekly price assessment for steel domestic plate, 8-40mm, exw Southern Europe was unchanged at €640-650 per tonne on Wednesday.
The US dollar was hovering around at $1.09 to €1 on Wednesday, compared with $1.04 to €1 a month earlier.
Trading in the spot market for heavy plate has picked up in March compared with the low levels observed in January and February, but overall traded volumes remained limited.
Sources expect no major price changes in the near term, they said.
Safeguards reaction
The market was digesting news about safeguard adjustments, which were made available on Tuesday March 11
While quota cuts for heavy plate were not as severe as expected (see table), there was a newly introduced cap per single country over the tariff rate quota (TRQ) volume initially available in each quarter, set at 20%.
This will affect steel plate imports falling under the ‘other countries’ category. Notably, South Korea, Indonesia and India are major heavy plate suppliers to the EU under that category, offering the most competitive prices, according to market participants in Europe.
For example, the total allowance for steel heavy plate deliveries from ‘other countries’ for 2025 is set around 2.2 million tonnes. That means that with the 20% cap, each individual country falling under “other countries” category cannot supply more than 440,000 tonnes per year of steel plate to Europe.
Major disruption from new safeguards was expected for South Korean suppliers.
Notably, in 2024, South Korea delivered around 800,839 tonnes of plate to the EU, according to Global Trade Tracker (GTT) statistics, which is double the new allocation volumes.
India supplied around 470,816 tonnes of plate to the bloc in 2024, while Indonesia supplied 430,693 tonnes.
The most recent deals for May-shipment plate from South Korea to Italy and Spain were done at €570-580 per tonne CFR in early March.
Fastmarkets weekly assessment for steel plate (8-40mm) import, cfr main port Southern Europe was at €570-580 per tonne on Wednesday, stable week on week.
Sources said the move to maintain the individual heavy plate quota for Ukraine was a “strange decision” considering that after the Russian invasion of the country in 2022, plate exports from Ukraine have almost vanished.
Ukraine’s key plate-producing assets were Metinvest’s Mariupol-based plants Azovstal and Ilyich Iron & Steel, but as a result of Russia’s invasion, Metinvest has lost control of both.
In 2024, total plate deliveries from Ukraine to Europe were practically zero, GTT statistics show.
“It’s a weird decision to keep individual plate quota for Ukraine, considering that plate-producing facilities have been destroyed by Russia. Those volumes could have been added to global [plate] quota,” one buyer in Italy said.
Besides, Ukrainian steel imports has been exempted from EU anti-dumping duties and safeguard measures since June 2022 with a further three-year exemption proposed by the European Commission on March 11, 2025.
EU to reinstate rebalancing measures to combat renewed US Section 232 tariffs
Those rebalancing measures include a mirror 25% tariff on steel and aluminium imports from the US.
In addition, Brussels will impose further countermeasures on the US, targeting approximately €18 billion-worth ($19.6 billion) of goods, which will then apply together with the reimposed measures from 2018.
“The objective is to ensure that the total value of the EU measures corresponds to the increased value of trade affected by the new US tariffs,” a Commission press release read.
“Since the new US tariffs are significantly broader in scope and affect a significantly higher value of European trade, the Commission launched on March 12 a process to impose additional countermeasures on the US,” the Commission said.
The consultation process for additional countermeasures proposed the targeting of industrial products including steel and aluminium products, home appliances, household tools, plastics, wood products, and more.
The countermeasures were expected to enter into force by mid-April.
Trade background
On March 12, 2025, the US imposed 25% tariffs on imports of steel and aluminium products to include those from the EU.
The imposition of tariffs by the US was expected to lead to trade being diverted to new destinations, with steel products flooding toward markets including the EU, undermining local steelmakers and distorting competition.
“[US] President [Donald] Trump’s ‘America First’ policy threatens to be the final nail in the coffin of the European steel industry,” Dr Henrik Adam, president of European steel association Eurofer, said on March 12.
“If European steel disappears, so too does [the] European automotive [industry], European security and defense, energy infrastructure, transportation and others. What is at stake is European sovereignty,” he added.
.
“Under the first Trump administration [in the US], we already witnessed the huge effect of Section 232. EU steel exports to the US decreased by more than 1 million tonnes, while of every three tonnes of steel deflected from the US market because of Section 232, two tonnes arrived in the EU,” he said.
“The US tariffs will probably lead to greater global trade imbalances, with steel that would have been shipped to the US going instead to European markets,” Adam said. “The EU was already contending with cheap steel imports – primarily from Asia, North Africa and the Middle East – and the US decision could exacerbate this situation, further damaging the European steel sector.”
The total amount of carbon steel imports to the EU in 2024 was more than 26.36 million tonnes, up by 6.4% compared with 24.78 million tonnes in 2023, Eurofer statistics showed.
At the same time, apparent steel consumption in the bloc amounted to 127 million tonnes in 2024, down by 2.3% from 130 million tonnes in 2023 and lower than during the 2020 pandemic year, when it was 129 million tonnes.
“EU steel production, which lost 9 million tonnes of capacity and 18,000 jobs in 2024 alone, is at even greater risk,” Eurofer said. “There is also the prospect that yet more steel will be deflected to the EU market if additional reciprocal tariffs are imposed by the US.”
Consequently, Eurofer has urged the European Commission to give an adequate response to the US measures to protect the struggling EU steel sector.
“It is crucial that the revised steel EU safeguard measures are robust and effective, to respond immediately and decisively to counter further deflection of the steel imports flooding the EU market. The time has come,” Adam said.
The EU’s existing steel safeguard measures have been extended several times, and were recently subject to a review, with proposed adjustments revealed on March 11. These adjusted measures were expected to come into force in April.
Eurofer: US tariffs threaten European steel and European sovereignty
The imposition of a 25% blanket tariff by the United States’ administration on all steel imports exacerbates an already dire market environment for the European steel industry and poses a genuine threat to its future. The sector expects the European Union to respond with an effective revision of the steel safeguard measures that will mitigate the impact of the U.S. tariffs and ensure the longevity of the industry in the long-term, says the European Steel Association.
“President Trump’s ‘America First’ policy threatens to be a final nail in the coffin of the European steel industry. If European steel disappears, so too does European automotive, European security and defence, energy infrastructure, transportation and others. What is at stake is European sovereignty”, said Dr. Henrik Adam, President of the European Steel Association (Eurofer). “Under the first Trump administration, we already witnessed the huge impact of Section 232. EU steel exports to the U.S. decreased by over 1 million tonnes, while for every three tonnes of steel deflected from the US market because of Section 232, two tonnes arrived in the EU.
Today, the overall market situation for European steel is much worse than in 2018. These new measures imposed by Trump are more extensive, therefore the impact of the U.S. tariffs is likely to be far greater”, continued Dr. Adam.
Firstly, the Trump administration has removed all product exemptions and Tariff Rate Quotas that the EU had previously negotiated. With EU steel exports to the U.S. already having fallen by 1 million tonnes, the EU now stands to lose at least another 1 million tonnes of steel exports to the US. Moreover, the blanket import tariff also now includes ‘derivative’ steel products, reducing export opportunities for a further 1 million tonnes of EU products.
Secondly, with global excess capacity having reached record levels in 2024 and set to increase again in 2025, the EU market – already saturated with cheap steel imports from Asia, North Africa and the Middle East – will be further flooded as steel intended for the US market will be redirected. 18 million tonnes of steel were exported to the U.S. under preferential regimes and are now at risk of deflection towards the EU market. EU steel production, which lost 9 million tonnes of capacity and 18,000 jobs in 2024 alone, is at even greater risk. There is also the prospect that yet more steel will be deflected to the EU market if additional reciprocal tariffs are imposed by the U.S.
“Simply put, while all other countries – today the U.S. – protect their national steel production, the EU has had the most vulnerable market in the world”, said Dr. Adam. “Our producers already face the highest energy prices while having the highest climate ambition. Meanwhile, they are being undercut by cheaper, more carbon intensive foreign imports”, he added.
In view of the existential threat to European steel caused by the spill-over of global overcapacity, foreign subsidies and dumping, now compounded by the new U.S. tariffs, the EU has committed to revising the current EU steel safeguard regime by 1 April.
“It is crucial that the revised steel EU safeguard measures are robust and effective to respond immediately and decisively to counter further deflection of steel imports flooding the EU market. The time has come”, concluded Dr. Adam.
EU announces proposed steel safeguard changes
The European Union has announced a series of proposed adjustments to the steel safeguard measures, detailed in a notification circulated on March 10.
The investigation, initiated on Dec. 17, 2024 by the European Commission, was in response to the challenging situation facing the EU steel sector, which has been exacerbated by an increase in global overcapacity and a continued decrease in EU demand.
The proposed changes include reducing the liberalization rate from 1% to 0.1% in response to a 14% decrease in consumption since 2019, and negative outlooks for the global steel markets.
Cuts were also suggested to various key exporters, such as for India’s HRC quota by approximately 23.7%, and Turkey by 14.4%. The EC also announced the removal of up to 65% of the redistributed Russian and Belarusian volumes.
Other proposals included splitting category 1 materials, which includes hot-rolled coil, into two subcategories to further delineate between specialized materials specifying the higher-value flat steel product falling under the CN Code 7212.60.00 (falling into the newly created subcategory 1B) and those for more general applications.
A further potential change was the removal of residual quota access for a number of products, including those falling under several categories, – impacting HRC, CRC, and HDG.
In addition, new caps on the maximum volume that a single country can export under residual quotas were announced, in a bid to prevent “crowding out” – where some exporters have increased outflows in specific categories of goods, limiting opportunities for traditional exporters.
Recent HRC import dynamics have remained stunted in recent weeks, as offer levels have gradually increased but buying interest has been largely absent. Market participants have cited a low-cost spread against domestic mills, alongside fears of material missing quota windows and the ongoing uncertainty towards the result of the investigation.
Market reactions
One trader supported the new changes, commenting that “it was softer than expected.”
The industry response to the safeguard quota adjustments has been mixed. While some believe that the quota reductions coupled with production could provide short-term support for domestic prices, others argue that the cuts are too minor to make a real impact.
A German mill source pointed to the revised quotas and recent supply outages at key EU players as supportive of prices. He said, “The import quotas have decreased, so that should support domestic prices in the near term.”
“Another major factor is that Arcelor’s plants are under maintenance. So that helps the situation too, despite Salzgitter restarting its rolling mill last Friday.”
However, other sources pointed to the continuing underlying poor demand as potentially limiting any potential price recovery.
“EU’s safeguard measures will tighten imports, but weak demand may cap price increases,” a Germany-based distributor source noted. “The key focus is on real consumption trends, mill pricing, and TRQ usage. If imports slow too much, we may need to secure volumes early—but if demand remains weak, waiting could bring better deals.”
Other market participants expressed disappointment in the measures, labeling the proposals as “a soft approach.”
“It’s surprising because the reduction in quotas is not significant, and will not change much in my opinion,” a Germany-based service center source said.
“I don’t think this is enough to support domestic prices. Importers would be happy because they don’t need to pay a lot.”
Likewise, an Italian mill source said, “This is an extremely weak response, effectively leaving the door open for massive imports, starting from HRC.”
Platts assessed imported HRC in Northwest Europe at Eur545/mt CIF Antwerp and in Southern Europe at Eur545/mt CIF Italy on March 11.
Platts is part of S&P Global Commodity Insights.
Authors: Charles Thompson, Devbrat Saha
Leak reveals planned EU safeguard amendments, new caps
The European Commission’s steel safeguard measure review will result in products that have experienced severe import surges receiving additional restrictions such as new quota caps and revising the administration of unused quotas, according to a leaked Commission document seen by Kallanish.
The review began in December and is scheduled to be completed this month.
Adjustments also include reducing liberalisation rates from 1% to 0.1%, to slow tariff-rate quota (TRQ) expansion and ensure a better balance with market demand.
Key changes include the split of hot rolled coil (HRC, Category 1A) into two subcategories: 1A for regular HRC and 1B for high-value steel under CN 7212 60 00. This adjustment follows the rapid exhaustion of duty-free access for specialised products after the 15% cap on residual quotas was introduced in the previous review.
For metallic coated sheets (category 4A), TRQs will be reduced due to consistently high quota exhaustion rates, surpassing 100% usage each quarter. To prevent overconcentration, a 25% cap on residual quotas per country will be implemented.
For non-alloy and other alloy quarto plate (category 7), TRQs remain highly utilised despite lower EU demand and increasing imports. A 20% cap on residual quota access per country will be introduced to curb dominance by major suppliers like China, India and Türkiye.
Hollow sections (category 21) will also see a reduction in TRQs due to sustained import pressure, despite declining EU consumption. The Commission will introduce a 30% cap on residual quota access per country to prevent excessive reliance on a few suppliers.
In the case of other seamless tubes (category 24), TRQs will be cut following a surge in imports and a decline in demand. Major suppliers, such as China, Ukraine, and the UK, will be subject to a 30% cap on residual quotas to avoid monopolisation, the document reveals.
A significant structural change is the removal of the carry-over mechanism for unused quotas in high-import pressure categories within group 1. This includes categories 1A, 4A, 7, 21 and 24. Previously, unused TRQs could be transferred to the next quarter, allowing for stockpiling and speculative behaviour. The removal of this mechanism will ensure a more equitable distribution of quotas and discourage import surges in later quarters, the document notes.
Further restrictions will be applied to developing country exemptions. China, Egypt and India will lose their previous exemptions in multiple categories due to exceeding the 3% import threshold and will be included in the TRQ lists for categories 1A; 1B; 3A, non-grain oriented electrical steel; and 5, metallic coated sheets.
While the Commission has considered increasing the 25% out-of-quota duty, this change has not yet been implemented, pending further review of import trends.
Once officially published, the changes to country exemptions will take effect from 1 April. The broader TRQ adjustments, including new category splits and revised quota administration, will be enforced starting 1 July.
The European Commission did not respond to request for comment on Tuesday.
Elina Virchenko Turkey
Norway to introduce its own CBAM in 2027
The Norwegian government has announced that it is planning to introduce the country’s own Carbon Border Adjustment Mechanism (CBAM) from 2027. The ministry of climate and environment and The Norwegian Environment Agency will work together on the scheme.
With its CBAM, Norway aims to prevent the European industry from losing its competitiveness and from relocating to other countries where environmental regulations are not stringent.
Andreas Bjelland Eriksen, minister of climate and environment, stated that the CBAM will set an equal price for emissions caused by the production of goods, whether they are produced in Norway or the EU, or are imported from other countries. Meanwhile, Jens Stoltenberg, minister of finance, pointed out that the CBAM will maintain the competitiveness of domestic industry, while providing incentives for other countries to cut their emissions.
EU’s proposed new steel import safeguards not tough enough, mills say
The decision to adjust the measures followed a review that began in December 2024. The proposed adjustments to the measures will come into effect on April 1, 2025.
The changes have not been published on the official WTO website yet, but the text has already been distributed among European steel market participants.
The existing measures have been in place since 2018, intended to protect EU steelmakers from a potential surge in imports. The current measures were set to run until June 30, 2026.
The new safeguard adjustments indicate that the annual liberalization rate (the annual increase in the TRQ) will change from 1% to just a 0.1% increase.
“Data shows that the liberalization rate in the past has largely outpaced the evolution of consumption. While TRQs have been increased by almost 25% since the measure was imposed [in 2018], consumption has decreased by 14% over the same period,” a European Commission note to the WTO read.
“These opposing trends have therefore significantly widened the gap between the level of TRQs and the market demand, and created an opportunity for imports to significantly increase their market share,” it added. “The latest market outlooks on world steel consumption only foresee a modest recovery in 2025 [to levels last seen in 2023], which the Union market is expected to follow.”
The Commission also suggested the introduction of a refined regime for access to the residual quota for countries benefiting from country-specific quotas.
Larger exporters that have exhausted their country-specific quota could access the residual quota volumes in the final quarter of the year. The objective of this mechanism would be to avoid volumes in the residual quota being unused.
Under the current functioning review, the Commission was set to cancel such access for several categories, including hot-rolled coil (category 1), cold-rolled coil (category 2), hot-dipped galvanized coil (category 4A), heavy plate (category 7), rebar (category 13) and wire rod (category 16).
The Commission also introduced a new 1B quota for HRC for imports falling under HS code 7212 60 00, “following crowding-out of a highly specific product in category 1 (HRC) as a consequence of introducing the 15% cap in the second functioning review,” the notice read.
Key adjustments proposed
New caps per country
New caps per country over the TRQ volume initially available in each quarter will be introduced not only for HRC and wire rod (categories 1A and 16), as suggested in the review in summer 2024, but also for HDG (categories 4A and 4B), heavy plate (category 7), rebar (category 14) and others (see table).
Notably, for HRC, the cap has been reduced from 15%, initially proposed in July 2024, to 13%.
The total allowance for the “other countries” safeguards category for HRC (category 1A) was suggested at 856,769 tonnes for April-June 2025. This means that any supplier in this category will be able to supply no more than 111,379 tonnes (13% of the total allocation) to the EU during the specified period.
The adjustment would further affect HRC imports falling under the “other countries” category. Vietnam, Japan, Taiwan and Egypt are the major HRC suppliers to the EU under that heading, with Asian suppliers offering the most competitive prices, according to market participants in Europe.
In contrast, in April-June 2024, Vietnam alone supplied to the bloc 231,491 tonnes of HRC.
HRC buyer sources,lambasted the suggested caps, pointing out that they would make importing steel “more like gambling.”
“A cap introduced for nearly all products – plate, CRC, rebar, you name it. Looks like they want to stop us from importing steel altogether,” a trading source said.
Reversing redistribution of sanctioned steel volumes from Russia and Belarus will result in lower HRC quotas
Following the start of Russia’s war of aggression against Ukraine in February 2022, the EU banned the import of all finished steel products originating in Russia and its supporter, Belarus
Those volumes have been redistributed in each product category where Russia and Belarus had country-specific quotas, thus increasing the allocation volumes available to other countries.
But given the current context of the general deceleration in the EU steel market and its deteriorating outlook, “the Commission considers it no longer in the Union’s interest to have these volumes available,” the document said.
The sanctioned tonnages will therefore be removed from the HRC, wire rod, heavy plate and hollow sections quotas.
Specifically, for category 1A (HRC), the Commission suggested a reversal of the redistribution, by as much as 65% of the volumes.
This would result in lower quarterly allocations, as the table below shows.
Against all expectations, no significant quota cuts have been introduced.
“It’s disappointing. No big quotas cut, even though it was expected, and [regional steel association] Eurofer demanded a 50% reduction of quotas. Again, the Commission is too much in the hands of [steel] importers,” a mill source in Europe said.
“HRC quotas are cut by no more than 11% in total, against expectations of 15-50%. It’s a joke. No more than 1 million tonnes of [HRC] imports will be gone [from the EU market] as a result [of new safeguards],” a mill source said.
European HRC prices inch up; market digests safeguard news
Northern Europe
Offers for May-delivery HRC from major steelmakers in Northern Europe were reported at €640-660 ($694-715) per tonne ex-works, but sources were not ruling out the possibility of a fresh round of price rises shortly.
Sources reported mainly hand-to-mouth activity in the spot market, with buyers digesting safeguards updates and postponing big purchases.
In the Benelux area, transactions for small tonnages of HRC were reported at €650 per tonne ex-works.
In Germany, buyers estimated achievable prices at €630-640 per tonne ex-works.
Italy-origin HRC was offered to Germany at €650-660 per tonne delivered.
As a result, Fastmarkets calculated its daily steel hot-rolled coil index, domestic, exw Northern Europe, at €635.83 per tonne on Tuesday, up by €3.95 per tonne from €631.88 per tonne on Monday
The Northern European index was up by €6.79 per tonne week on week and by €34.43 per tonne month on month.
Italy
In Southern Europe, meanwhile, Fastmarkets’ daily steel hot-rolled coil index, domestic, exw Italy, was calculated at €620.00 per tonne on Tuesday, unchanged day on day.
The index was up by €1.67 per tonne week on week and by €26.25 per tonne month on month.
Offers for May-delivery HRC from two Italian suppliers were reported at €620-640 per tonne delivered (€610-630 per tonne ex-works).
But sources said that target prices for June was around €660-680 per tonne base delivered (€650-670 per tonne ex-works).
Buyers’ estimations of tradeable values were reported at €610-620 per tonne ex-works on Tuesday.
Trading was also quiet in Italy since buyers remained cautious with bookings because they were waiting to have more clarity on safeguard measures.
“Real demand is still weak. Price rises is supported only by safeguards review,” a buyer in Italy said.
Safeguard reaction
The market was digesting news about safeguards adjustments, made available on Tuesday, and it looks like the changed proposed by the European Commission fell short of everyone’s expectations.
Among other things, the Commission suggested a reduction to the HRC cap per country over the tariff rate quota (TRQ) volume initially available in each quarter from 15% to13%.
On top of that, quarterly HRC allocations will be reduced as a result of removing “sanctioned” Russian HRC tonnages from quotas.
In general, the market had mixed reactions to the proposed safeguard measure adjustments.
Mill sources said the proposed measures fell short of expectations and they were “disappointed.” Buyers, in their place, lambasted the quota reductions and cap introduction for a number of steel products.
“[A] cap [was] introduced for nearly all products – plate, CRC, rebar – you name it, all are there. Looks like they want to stop us from importing steel altogether,” a trading source said.
“Looks like the current measures are balanced this time; nobody’s happy, neither mills nor buyers,” a second buyer said.
“HRC quotas are cut by no more than 11% in total, against expectations of 15-50%. It’s a joke. No more than 1 million tonnes of [HRC] imports will be gone [from the EU market] as a result [of new safeguards],” a mill source said.
Nonetheless, the stricter safeguards, along with higher domestic supply, were expected to support domestic HRC prices rebound, sources said.
Tighter domestic supply
On Monday, ArcelorMittal announced a major maintenance program in France, which would entail 90 days stoppage of a blast furnace in Dunkirk.
The maintenance will take place during April-June. At the same time, as of April, reviewed safeguards were expected to come into force, limiting import coil supply.
Industry sources suggested these two factors would likely support a further HRC price rise in Europe.
“Real demand is not there, but tighter supply [of HRC] might boost apparent consumption,” a buyer source said.
On top of that, German steelmaker Salzgitter has declared force majeure on flat steel deliveries, following a fire at its hot strip mill in end-February.
Several sources familiar with the matter said that operations at Salzgitter’s hot-strip mill had been resumed on March 7, and estimated output losses as a result of the fire to be around 80,000 tonnes of HRC.
The company had not responded to requests for comment about the loss of production and an equipment restart date by the time of publication.