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
