EU implements new safeguard measures on steel from 1 April, Malaysia, Indonesia, Thailand exempted.
Starting from 1 April, the European Union will implement revised safeguard measures for steel imports, prompted by market challenges and sanctions on Russia. These include a 12.1% cut to the duty-free hot-rolled coil (HRC) quota, reducing it to 1.9 million tonnes per quarter. The reduction stems mainly from the removal of up to 65% of Russian volumes previously redistributed to other exporters. Quotas for other products like plate, wire rod, and hollow sections will also be cut. India faces the steepest reduction in HRC quotas—around 23%.
Adjustments to Quota Caps and Distribution Rules
The EU is tightening access to residual quota volumes, especially in the final quarter of the quota year (April–June), removing carryover privileges for several products including HRC, cold-rolled coil (CRC), and some types of galvanized steel. Newly introduced caps aim to prevent excessive concentration of imports from specific countries, with limits ranging from 13% to 30% depending on the product category. Additionally, a new subcategory (1B) has been created for HRC under CN Code 7212.60.00 to ensure adequate access for highly specialized steel products.
Rationale for the Changes
These adjustments are the result of a European Commission investigation initiated in December 2024, responding to a deteriorating EU steel market marked by rising global overcapacity and falling demand. Since 2019, EU steel consumption has declined by 14%, prompting the Commission to cut the annual liberalization rate for quotas from 1% to 0.1%. This more conservative approach reflects the market’s fragility and the need to protect domestic producers amid global competition.
Targeted Exporters and Exemptions
Countries most affected by these revisions include major exporters like India and Turkey, whose HRC quotas are being reduced significantly. Meanwhile, Indonesia, Malaysia, Thailand, Saudi Arabia, and China remain exempt from the safeguard measures on HRC. This limited change to the exemption list signals a cautious approach by the EU in adjusting its trade relationships, especially with developing nations.
Market Impact and Reactions
The proposed changes have already created uncertainty in the steel market, with importers citing concerns over tighter quotas and reduced flexibility. Recent weeks have seen muted buying interest, attributed to narrow price spreads with domestic mills and fears that shipments may miss quota windows. While the EU’s adjustments aim to safeguard its domestic steel industry, the impact on trade flows and price dynamics is likely to be closely monitored by market participants in the coming months.
