On October 2, European steel distributors’ association EUROMETAL sent two letters to the European Commission, addressing steel derivatives imports issues for the already struggling European steel industry.
The first letter, an executive summary sent to Commission President Ursula von der Leyen, called for urgent intervention to stop steel-intensive imported goods from bypassing EU safeguards and undermining strategic policies including the Green Deal, CBAM, circularity and reindustrialization goals.
The second letter, a detailed follow-up to Maroš Šefčovič, European Commissioner for Trade and Economic Security and for Interinstitutional Relations and Transparency, and Commissioner Stéphane Séjourné, reiterated these concerns and proposed specific countermeasures.
EUROMETAL highlighted that imports of steel-intensive manufactured goods — including electric machinery and railway equipment, prefabricated metal structures, automotive parts, etc. — have more than doubled since 2010, rising by 213% to over 8 million tonnes in 2024.
“These are finished products that escape EU steel classifications but carry high embedded carbon and steel content,” EUROMETAL said. “They bypass
trade defense instruments and CBAM entirely, creating a new circumvention path that penalizes compliant EU producers.”
The federation estimates that over 3 million industrial jobs are now at risk as imports of unregulated derivatives continue to increase. It warned that Europe’s manufacturing core — particularly in automotive, mechanical engineering and metal products — faces structural deindustrialization if policymakers fail to act.
Between 2022 and 2025, the EU’s steel-weighted industrial production index fell from 100 to 96.9, while imports of steel derivatives increased sharply. The largest import growth was recorded in the automotive sector, which accounts for around 40% of all derivative inflows, followed by electrical machinery, railway equipment and prefabricated structures.
The automotive sector is the second-largest steel consumer in the EU and accounts for around 20% of total steel consumption in the bloc, according to regional steel industry association Eurofer.
“Foreign finished goods are replacing EU semi-finished products,” an EU service center source said. “Without carbon pricing or traceability, these imports gain an unfair cost advantage of up to €50-80 [$58-94] per tonne.”
Shift from the US market
According to EUROMETAL, the surge in European-bound shipments is partly a result of the US Section 232 measures, which extended tariffs and “melt and pour” origin rules to over 400 derivative products.
“Exporters from overcapacity countries have redirected these goods to Europe, where no equivalent origin-tracking or carbon rules exist,” the report noted.
Industry sources said that up to 15% of global steel derivative flows have been diverted to the EU market since the US tightened its origin rules.
Call for EU action
EUROMETAL urged the Commission to extend CBAM and trade defense instruments to cover high-risk steel-containing goods, and to implement mandatory origin tracking for all imports.
Key recommendations include:
- Extending CBAM and Trade Defense Instruments (TDIs) to mechanical assemblies and metal components with proven steel intensity;
- Introducing a “melt and pour” origin declaration for all steel-containing imports;
- Strengthening customs surveillance and data-sharing among Member States;
- Defining high-risk categories for enhanced scrutiny — products showing >30% import growth or >100,000 tonnes in annual volume;
- Reinforcing EU scrap retention and onshore fabrication as part of Green Deal industrial policy.
“This is not a technical issue — it is a matter of political will and industrial survival,” the federation said. “Europe must not allow the backdoor entry of carbon-intensive steel through derivative products.”
Market impact
Traders said the issue is increasingly influencing purchasing strategies.
“There’s a clear two-tier market now,” a steel mill in Northern Europe told Fastmarkets. “On one side, EU-made steel under CBAM rules; on the other, imported assemblies that use the same steel but avoid the costs.”
Market participants warned that unless the Commission closes these gaps, price distortions between regulated and unregulated goods could deepen — weakening domestic fabrication margins and discouraging investment.
And while steel imported into the EU to produce finished goods is subject to CBAM regulations, those same products — such as cars and white goods and other steel-intensive products — can be imported directly without falling under the scope of CBAM.
Steel market participants are therefore worried about the leakage of high-value-added production outside the over-regulated European market, thus echoing EUROMETAL’s concerns.
“Instead of bringing the steel coil from Asia and processing it in the EU, we buy the ready tailor-made steel structure without quota, without the anti-dumping and CBAM. That means that all this added value for Europe is gone,” a source in the EU steel market said.
“The situation is very unclear right now,” a mill source in Northern Europe said. “If derivatives and finished steel goods remain outside CBAM, the competitive gap will only widen, but if the scope expands suddenly, importers could face major unplanned costs.”
Uncertainty surrounding the final CBAM framework and its rollout has continued to weigh on trading in the European flat steel market in recent weeks.
Market participants said demand for imported hot-rolled coil has been subdued, with buyers largely pausing new bookings while they assess regulatory and cost exposure linked to CBAM.
“Import deals are practically off the table right now,” a Northern European buyer source said. “Even if offers look competitive, the risk of the cargo being cleared after January 1, 2026 — once CBAM becomes fully operational — is too high.”
A trader in Italy also reported minimal appetite for overseas coil, citing uncertainty over how future customs declarations will treat embedded carbon.
Some Asian mills were heard offering to absorb part of the potential CBAM cost to encourage orders, sources said, though only within limited thresholds — typically up to around €35-40 per tonne, Fastmarkets reported.
“At this point, no one can say what the true landed cost will be once all the carbon charges are factored in,” a Southern European buyer commented.
Several industry participants suggested that reduced import availability could eventually bolster reliance on domestic coil, potentially lending modest support to local prices in the coming weeks, but the effect “would only be short-lived, since [steel] consumption remains muted with no signs of recovery,” a German soruce said.
Fastmarkets’ calculation of the daily steel hot-rolled coil index domestic, exw Northern Europe was €575 per tonne on Friday October 3, stable day on day, reflecting continued muted demand from downstream fabrication sectors.
The Northern European index dropped by €2.71 week on week, but was stable month on month.
