Blaming imports won’t save European steel industry

Over the past month, a growing number of voices (from industry groups to national governments) have called for tighter trade restrictions on steel imports into the European Union. Eurofer (the European steel producers’ association) along with UNESID (the Spain’s steel producers’ association), issued statements urging the replacement of current safeguard measures with “more effective trade instruments.” Several steelmakers, including ArcelorMittal Europe, voestalpine, Thyssenkrupp, Outokumpu, Aperam, echoed these demands in separate press releases.

Adding weight to the momentum, 11 EU member states (including Austria, France, Italy, and Poland) signed a so-called non-paper proposing a reduction in tariff-rate quotas (TRQs) by 40-50% to return import shares in consumption to where they were in 2012-2013.

These coordinated efforts may give the impression that Europe is facing influx of imports, but the data tells a different story.

In 1H 2025, the EU imported 18.7 million tons of steel, including semis, flat and long products – virtually unchanged from the 18.9 million tons recorded in the same period of 2024. Over the past five years, the share of imports in the EU consumption has remained quite stable as well – at 20-25% for flat products and 10-13% for long products, according to Eurofer.

So, if neither the volume nor the share of imports has surged, what explains this sudden push for stronger trade barriers? The answer lies in pricing, not tonnages.

Since early May, European steelmakers have faced a significant drop in domestic prices, with hot-rolled coil (HRC) down 12.9% and rebar down 6.1%. These price shocks have squeezed margins, pushed down capacity utilization, and undermined competitiveness of EU producers already struggling with higher energy and production costs compared to producers from third countries, as well as decarbonization pledges, which need investments to be realized.

It is not surprising that now European steelmakers are asking for help, but they are focusing on the wrong tools. The challenges facing the European market are not driven by overall import volumes, so strengthening trade barriers can not be an effective solution.  The main problem is imports from Southeast Asia, which have been exerting heavy pressure on market prices.

Southeast Asian suppliers, particularly Indonesia and Malaysia, have been consistently undercutting competitors throughout 2025. In early March, their HRC offers stood at €540/t CIF – about €30/t higher than Indian offers, but €50/t below Turkish levels. By early May, Indonesian offers had dropped to €530/t CIF, while Turkish offers slipped to €550/t CIF. Over the March-July period, HRC offers from Indonesia fell by €75/t, and those from Turkiye by €80/t. In fact, aggressive price cuts from Southeast suppliers compelled other exporters to follow suit in order to remain competitive.

Inflow of underpriced flat products has been facilitated by loopholes in the EU safeguard measures and the slow reaction of European authorities. Developing countries, including Indonesia, Malaysia, and Algeria, are exempt from safeguard quotas, allowing them to ship unlimited volumes into the EU without duties. As a result, in 2Q 2025, these countries shipped 460 ths tons of HRC to the EU – equivalent to nearly 25% more imports outside the regulated TRQ system.

With CBAM set to become fully operational in 2026, European steel imports will already face an additional barrier. Imposing harsh new restrictions through updated safeguard system risks triggering a supply shock that could easily drive prices up by €100-200/t. Is that what the European market and broader economy truly need right now?

The EU needs a more calibrated, strategic approach that targets distortions without destabilizing the entire supply chain. Calls for general import reductions miss the point as the real challenge is non-fair behavior of some suppliers, not overall import levels.

The European Commission has all the tools it needs to act, including anti-dumping and countervailing investigations, but it has been slow to deploy them. In practice, trade investigations take 12-14 months to complete, which exacerbates damage to local producers. Meanwhile, little has been done to close the TRQ loopholes that created possibilities for such price dumping.

The European steel industry is right to ask for help, but volume-based import restrictions are the wrong response. Imports have not surged. In fact, flat product imports even declined by 5.6% y-o-y in 1H 2025.

What the sector truly needs is a smart, rules-based system that protects against unfair trade while preserving supply chain resilience. That means fixing TRQ system to close loopholes, price monitoring to unveil non-market behavior and prompt launching anti-dumping and countervailing investigations when necessary.

Protecting the European steel industry starts with protecting fair competition, not limiting trade altogether.