EU tightens steel safeguard on hot-rolled flat products to curb market disruption

The European Commission (EC) is taking stricter action on imports of hot-rolled flat products (HRF). This follows a recent surge in imports, particularly from new origins, which has destabilised the market.

HRF accounts for the largest share of steel imports under the existing safeguard measures, reaching 8.5 million tonnes (mnt) in 2023. This represents a significant 31% of all safeguard-protected steel imports. Moreover, HRF constitutes a substantial portion of the EU's domestic steel production of 34% and domestic sales of 25%.

The problem lies in the recent import spike, specifically from new exporters. This has led to the residual quota (unused portion of the total import allowance) for HRF being exhausted on the very first day of each quarter for several consecutive quarters. This front-loaded import surge disrupts the market throughout the remaining period, putting undue pressure on EU producers.

To address this imbalance and ensure the safeguard measures remain effective, the EC has implemented a new policy. A 15% cap will be placed on the amount any single country can export under the residual HRF quota each quarter.

Cap aims to achieve two key goals:

• Reduced import pressure: By limiting the initial influx of imports, the EC hopes to create a more stable market environment throughout the quarter.
  
  
• Preserving trade relationships: The 15% cap is designed to allow significant export volumes from various countries, protecting traditional suppliers and those who haven't disrupted the market. This ensures a balance between protecting the EU steel industry and maintaining trade relationships with exporting nations.
  
  

Outlook:

The new policy is expected to stabilise the HRF market in the EU. Traditional suppliers should still be able to export substantial volumes, while import pressure from countries accused of market disruption is likely to decrease. This move signifies the EC's commitment to a balanced steel market that benefits both domestic producers and international trade partners.