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
