The European Commission (EC) has strengthened steel safeguard measures to protect EU steel producers from surging imports, reducing the liberalization rate from 1pct to 0.1pct, which significantly limits the volume of tariff-free steel imports into the EU.
Additionally, countries can no longer use the unused import quotas of other nations, including Russia and Belarus. The carry-over mechanism, which previously allowed countries to roll over unused quotas to the next quarter, has been eliminated for high-pressure import categories. These measures aim to give EU steelmakers room to increase production, regain market share, and boost green steel investment.
Imports within the established quotas will remain tariff-free, but any excess imports will face a 25pct duty. Most of these adjustments take effect on April 1, 2025, while the slower liberalization pace and removal of the carry-over mechanism will begin on July 1, 2025. The safeguard measure itself remains in place until June 30, 2026.
The EC report highlighted a worsening global overcapacity issue, with installed capacity reaching 2,482 mln tons by late 2024, an increase of over 50 mln tons from 2023, mainly in India, ASEAN, and the Middle East. Meanwhile, global steel demand declined by 1pct YoY, widening the gap between supply and demand. By 2026, the capacity surplus could reach 630 mln tons.
The EU steel industry is also facing increased trade restrictions globally, including higher tariffs in Turkey, Colombia, and Canada, along with safeguard measures in South Africa and an investigation in India on flat steel imports. Additionally, the U.S. announced on February 10, 2025, that it would end country exclusions and quota regimes under Section 232, making all steel imports subject to a 25pct duty. The EC warns that this could lead to further trade diversion into the EU, worsening the competitive environment for European steelmakers.
Between 2022 and 2024, EU steel production fell by 18pct, while capacity utilization dropped to 67pct despite a 5pct capacity reduction in 2024. Steel consumption declined by 8pct in 2022 and 14pct in 2023, stabilizing at 2024 levels, while imports fell 11pct from 2021 levels but increased by 7pct YoY in 2024.
To enhance the effectiveness of the safeguard measures, the EC grouped steel product categories based on the severity of import pressure:
Group 1 (Very High Pressure): Includes Non-Alloy HR Steel (1A), Metallic Coated Steel (4A), Quarto Plates (7), Hollow Sections (21), and Other Seamless Tubes (24).
Group 2 (High Pressure): Includes Non-Alloy CR Steel (2), Organic Coated Steel (5), Tin Mill Products (6), SS Bars and Light Sections (14), Non-Alloy Wire Rod (16), Non-Alloy Angles and Sections (17), Sheet Piling (18), Gas Pipes (20), Seamless SS Pipes (22), and Large Welded Tubes (25B).
Group 3 (Moderate Pressure): Includes Other Electrical Steel (3B), Rebars (13), SS Wire Rod (15), and Other Welded Pipe (26).
Group 4 (No Pressure): Includes Other HR Steel (1B), Electrical Steel (3A), Other Metallic Coated Steel (4B), SS HR Steel (8), SS CR Steel (9), SS HR Quarto Plates (10), Non-Alloy Merchant Bars (12), Railway Material (19), Large Welded Tubes (25A), Non-Alloy Cold Finished Bars (27), and Non-Alloy Wires (28).
Category 1 has been split, with 1A covering Non-Alloy HR Steel for general applications, while 1B includes HS code 7212.6000 for special applications.
The EC first introduced steel safeguards in 2019 to protect EU producers from trade diversion. The latest review extends the measure until June 2026 to address persistent overcapacity concerns and rising import pressures.