One of the Most Significant Changes in Steel Trade in Recent Years Is Being Prepared

The current EU steel safeguard measures expire on 30 June 2026, and the European Commission's aim is for the new system to replace them thereafter. Many expected the European Union to gradually phase out the safeguard measures introduced in 2019, but the current proposal points in exactly the opposite direction.

Based on Commission proposal COM(2025)726, the European Union would introduce a new, stricter system to address global steel overcapacity. The provision attracting most attention is the one under which the additional duty on imports above quotas would rise from 25% to 50%.

This may initially appear to be a simple tariff increase, but in reality it could affect the procurement and supply strategies of many companies. An additional burden of this magnitude could, for certain product categories, fundamentally change the economics of importing.

Why Is the European Union Tightening?

The Commission's reasoning is that the European steel industry is operating under increasing pressure. Global steel production capacity has been growing faster than actual demand for years, creating significant overcapacity.

Available data suggests that global steel overcapacity already exceeds 600 million tonnes and may grow further in the coming years. The European Commission takes the view that this is not only an economic issue but a matter of strategic importance. The European steel industry plays an important role in supplying the automotive, construction, machinery, and defence industries, while the sector faces significant investment in the green transition.

The Commission argues that excessive import pressure could jeopardise these investments and the survival of European production capacities.

Not Only the Duty Rises – Origin Verification Is Also Elevated

However, one of the most significant changes in the proposal is not the duty increase but the introduction of the so-called "melt and pour" rule.

In the future, it is expected to be insufficient to demonstrate in which country a product was processed or from where it was exported to the EU. Importers will also be required to prove where the steel was originally melted and poured.

According to the proposal, the "melt and pour" country is to be the place where the crude steel or iron was first produced in liquid form and then first solidified.

This represents a significant shift in thinking for steel trade. The EU's clear aim is to examine the true origin, not merely the country where the last processing operation took place.

The background to this regulation is the effort to prevent diversion through third countries and the concealment of origin.

New Documentation Requirements Expected

Under the proposal, importers will be required to submit appropriate evidence of the "melt and pour" country during customs procedures.

One of the most important instruments for this is expected to be the mill certificate. This document contains detailed information about the origin of the raw material and the manufacturing process.

The practical significance of this change should not be underestimated. Many companies today select suppliers primarily on the basis of price, quality, and delivery time. In the future, the availability of appropriate documentation may become at least as important a consideration.

Suppliers unable to credibly demonstrate the origin of their raw material may find themselves at a competitive disadvantage in the European market.

Future Quotas Are Already Taking Shape

Based on the annexes to the proposal, the total EU tariff quota volume may be approximately 18.3 million tonnes per year.

The largest volumes continue to relate to hot-rolled and cold-rolled flat products, but separate quotas will also apply to, among other things, tubes, wire, stainless products, and various steel sections.

It is important to note, however, that the quota volumes broken down by country are not yet known. These are expected to appear later in a separate Commission implementing regulation.

This means that while the main directions of the new system are already visible, many important details remain open questions for companies.

Who Is Most Likely to Be Affected?

Contrary to popular belief, the amendment is not solely a matter for steel traders.

Automotive suppliers, machinery manufacturers, construction companies, steel structure producers, and numerous processing industry players may also be directly affected. Any company that sources steel raw materials or semi-finished steel products from countries outside the EU would do well to monitor developments closely.

The greatest challenge is expected to come not from the 50% duty itself, but from meeting the new compliance requirements. Origin documentation, document management, and supply chain transparency may become increasingly important competitiveness factors.

What Is Worth Preparing for Now?

Although the legislative process has not yet been concluded, the main directions are already clearly visible. Companies involved in steel imports would do well to review their current procurement structures, assess their suppliers' documentation capabilities, and evaluate what impact a potential 50% additional duty could have on their costs.

Companies that begin preparing in good time will be better placed to adapt to the new environment. In the coming period, not only price and quality but also verifiable origin and documentation compliance are expected to become important elements of competitiveness.

Summary

The EU's new steel protection system could bring one of the most significant changes in steel imports in recent years. Based on the proposal, the additional duty on imports above quotas may rise to 50%, while importers will be required to provide more detailed proof of the steel's true origin. While the final rules are not yet fully known, it is already clear that import strategy, supplier relationships, and compliance processes will all gain in importance in the coming years.

Key Questions

When could the new steel quota rules come into force?

According to current plans, they would replace the safeguard measures expiring on 30 June 2026, but the exact entry into force depends on the conclusion of the legislative process.

What could the above-quota duty be?

According to the proposal, an additional duty of 50% may apply instead of the previous 25%.

What does the "melt and pour" rule mean?

The importer must demonstrate in which country the steel was originally melted and first poured.

What documents can be used to prove this?

Expected to be a mill certificate and other origin documentation.