EU announces proposed steel safeguard changes

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.