Assofermet warns of supply risks under new EU steel safeguards

Italy's steel distribution association Assofermet has reported growing uncertainty across the market following the introduction of the EU's new steel trade measures, warning that sharply reduced import quotas and new allocation rules could significantly tighten steel supply in Europe and lead to further price increases.

Concerns over reduced import availability

According to Assofermet, market participants are particularly concerned about the substantial reduction in available quotas, the revised treatment of the "other countries" category and the late publication of the final quota allocations shortly before the measures entered into force.

The association estimates that the volume of practically usable import quotas could fall by between 60% and 70% once the impact of the new 50% out-of-quota tariff, existing anti-dumping duties and country-specific restrictions is taken into account.

Assofermet argues that the combination of tighter trade measures and environmental regulations could undermine the competitiveness of European manufacturing industries and potentially accelerate industrial relocation outside the EU.

Producers already raising prices

Despite continued weak demand during June, Italian distributors expect higher steel prices in the coming months, driven primarily by the new safeguard regime rather than underlying market fundamentals.

According to the report, several domestic producers temporarily suspended sales at the beginning of July while assessing market reactions before returning with higher offer prices. Additional increases are considered likely.

Distribution sector under pressure

Assofermet noted that June trading activity weakened compared with both May 2026 and June 2025, reflecting subdued demand, elevated inventories and generally weak trading conditions throughout the supply chain.

The association warned that independent distributors could face particular difficulties if rising import restrictions lead to higher domestic prices without corresponding improvements in downstream demand, further squeezing margins in the sector.

Long products continued to suffer from weak activity in heavy industry, automotive and construction markets, while flat products showed mixed trends, with some buyers bringing forward purchases ahead of the introduction of the new safeguard system.

Stainless and tinplate markets remain cautious

In the stainless steel sector, Assofermet reported further weakness in demand, particularly for stainless tubular products and long products, while flat stainless products benefited from selective demand from the food and pharmaceutical industries.

Looking ahead, the association expects the second half of 2026 to be shaped by higher import costs and additional compliance requirements, including the introduction of mandatory "melted and poured" documentation for imported steel products from October 1.

In the tinplate market, opinions remain divided. While some market participants see sufficient inventories and available European production capacity, others expect demand recovery and rising prices, partly driven by higher raw material costs, including tin prices.

Source: Assorfermet, Photo: Fotolia