A request to initiate the review was submitted by 13 EU member states on November 29.
“The request contains evidence of a change of circumstances since the last review of the measures. In particular, the request contains information regarding the contraction in European Union demand for steel, resulting in widening gaps with the current level of duty-free quota volumes,” the notice said. “Moreover, [the surge in] China’s steel exports to major regions has pushed exports from other markets to the EU. According to the request, this calls for a reassessment of the allocation and management of the tariff-rate quotas.”
The review process will be accelerated, the Commission said, and is expected conclude by March 31, 2025, with any adjustments to the current measures expected to come into force the following month.
Industry concerns include the allocation and management of tariff-rate quotas; the crowding out of traditional trade flows; getting an updated list of developing WTO member countries excluded from the scope of the measures based on their most recent level of imports for 2024; the level of annual liberalisation of the quotas; and any other changing circumstances that could require an adjustment to the level or allocation of tariff-rate quotas.
“In any case, with all the trade measures in place we can expect increased reliance on domestically produced steel in the EU,” a distributor in the Benelux region told Fastmarkets.
Wider market
European steel safeguard measures have been in place since July 2018.
The latest review of the safeguard measures only came into force on July 1, 2024, but has already had a substantial effect on the market due to a proposed 15% cap per country over the tariff rate quota (TRQ) volume initially available in each quarter for HRC and wire rod in particular.
In addition, in August 2024 the Commission launched an anti-dumping probe into HRC imports from Egypt, India, Japan and Vietnam.
Since then, market participants have noticed that Asian suppliers have become less active and said that “importing steel has become like a gambling” now.
“These trade barriers create additional uncertainty which is not encouraging demand [for imported steel], so we can expect more demand for EU-made steel and it’s safer [to book European steel],” a trading source said.
“It’s an issue for import steel buyers in Europe that they don’t know the potential extra costs they might be facing by the time [any steel arrives],” a second trader said.
In January-September 2024, carbon steel imports to the EU amounted to 20 million tonnes. For the whole of 2023, steel imports were 24.8 million tonnes.
Sources said that imports account for up to 30% of EU steel consumption.
Global steel overcapacity, particularly in regions such as China and the US – which benefit from more favorable production conditions- was undermining the viability of the EU steel sector, producer source told Fastmarkets.
“China is massively exporting steel globally at dumped prices, which is, in turn, severely depressing prices worldwide. On top of this, these excessive exports result in trade flow diversions to the EU market,” a producer in northern Europe said.
World crude steelmaking capacity in 2023 was estimated at 2.439 billion tonnes per year, exceeding production by 552 million tpy, according to the Organisation for Economic Co-operation and Development (OECD).
In 2023, steel output among the EU’s 27 member states fell to 126.30 million tonnes, down from 136.30 million tonnes in 2022 and down from 152.60 million tonnes in 2021, according to data from the World Steel Association.
