EU officially extends safeguard measures on steel imports for two years

The EU has officially extended safeguard measures on steel imports for another two years, until June 2026. The European Commission has published the relevant implementing regulation.

According to the EC, the regulation also adjusts the functioning of the measure to adapt it to market conditions.

The decision was made after an investigation requested by 14 EU member states.

The need to extend and adjust the safeguard measures, the EC noted, was caused by a combination of factors. These include:

• high levels of global steel overcapacity and a sharp increase in exports from China to third countries, particularly to Asia, which led to an increase in exports from these third countries to the EU,
• an increase in the number of trade remedies and other restrictions imposed by third countries,
• a significant decline in demand in the EU.

The technical changes will come into force on July 1, 2024. The Commission can still review the measure’s operation until June 30, 2026, if it considers that further adjustments are necessary.

The European Steel Association (EUROFER) welcomed the EU’s move. However, the industry association believes that a long-term solution to the problem of global overcapacity is needed.

«Europe has become a favorite export market for carbon-intensive overcapacity, and we are striving for leadership in decarbonization. This is a structural problem that threatens the existence of the entire EU clean tech value chain at a crucial time for our transition,» said EUROFER Director General Axel Eggert.

As explained in the EC’s decision, since 2021, the penetration of steel imports into the bloc has even exceeded the levels recorded before the start of safeguard measures in 2018. This has had a negative impact on the European steel industry.

Despite the safeguard measures, global overcapacity increased by almost 50 million tons from 2019 to 2023. In addition, according to the OECD, about 158 million tons of new capacity will potentially be commissioned by 2026, while global steel demand is currently growing by only about 36 million tons per year.

According to EUROFER, the growth of imports to the EU was driven by exporting countries where steel capacity has grown the most (in particular, Southeast Asia, parts of the Middle East and North Africa). This is partly fueled by Chinese subsidized investment and partly by local investment. In addition, Chinese exports are pushing others to direct steel to the EU market.

In turn, the Italian steel trade association Assofermet warns that the announced measures pose a significant risk to steel consumers in the bloc.

According to the organization, the annual deficit will be more than 1.63 million tons, which will increase costs for importers and processors and affect their competitiveness.

Assofermet is in favor of easing the measures and calls for contracts signed before May 31, 2024, to be exempt from the 15% limit. The EC has imposed this restriction on imports of hot-rolled coils and wire rod under the quarterly quota in the «other countries» category for any individual country.

The Association also points to the intersection of safeguard measures and the cross-border carbon adjustment mechanism (CBAM) in the first half of 2026, which could lead to double taxation.

In late May, the EU officially notified the World Trade Organization of the extension of safeguard measures on steel imports to the bloc.