MEPS: EU stainless steel market braces for stricter trade defence measures

by David Fleschen

According to a recent analysis by MEPS International, the European stainless steel market could face four to five more months of subdued demand and low prices unless the European Commission accelerates the introduction of its proposed stricter trade defence mechanism.

The Commission’s draft regulation, unveiled on October 7, seeks to replace the current import safeguard system with tighter controls. The proposal includes:

  • A 47% reduction in tariff-free import quotas

  • No carry-over of unused quarterly quotas

  • A doubling of above-quota tariffs from 25% to 50%

  • Introduction of a “melt and pour” origin verification rule to prevent circumvention

If approved, the new system would take effect on July 1, 2026, when the current safeguard measures expire. However, EU stainless steel producers are urging an earlier implementation — potentially as soon as April 2026 — to stabilise prices that remain at multi-year lows.

Revised quota methodology

MEPS’s analysis outlines significant changes to how tariff-rate quotas (TRQs) would be calculated.

  • Quotas would be based on 2013 import volumes, before the global steel overcapacity crisis.

  • Country allocations would be determined from average import shares between 2022 and 2024.

  • Exporters accounting for more than 5% of total EU imports would receive individual quotas, while smaller suppliers would be grouped under an “other countries” category.

  • Developing nations with a share below 3% would remain exempt.

Cold rolled coil most affected

Under these rules, China and Vietnam would both receive country-specific quotas for stainless steel cold rolled coil (CRC), replacing their current access via the “other countries” quota.

  • China’s 16% allocation would allow 79,512 tonnes per year.

  • Vietnam’s 7.7% share would provide 38,210 tonnes per year.

  • The “other countries” quota would drop sharply to 68,597 tonnes.

Among other suppliers, Taiwan would retain the largest share, though its annual allocation would fall 43.1% to 106,147 tonnes. Larger cuts would hit India (–76.2%), South Africa (–60.7%), South Korea (–60.5%), and Turkey (–38.2%).

Market reaction and uncertainty

MEPS reports that many EU importers have paused new orders from third-country suppliers due to uncertainty over the proposed regulation and the upcoming Carbon Border Adjustment Mechanism (CBAM), set to take effect on January 1, 2026.
The combination of weak demand, regulatory ambiguity, and potential tariff exposure has limited new activity — with Indian stainless bars cited as one of the few exceptions.

The proposed regulation must now be approved by all 27 EU member states. MEPS notes that, if adopted, the EU could face compensation claims or retaliatory tariffs from key trading partners, making negotiations potentially lengthy.

Source and Photo: MEPS