What's Happening?
The European Commission has proposed new 'melt-and-pour' measures aimed at enhancing transparency and traceability in steel imports. Starting October 2026, importers will need to provide evidence of the country where raw steel or iron is first produced
in liquid form and cast into its primary solid state. This information will not be used directly by importers to draw on quota but will help establish country-specific quota amounts from October 2027. The measure sets tariff-free quotas at 18.3 million tonnes per year, with an out-of-quota duty of 50% for 30 categories of steel products imported into the EU. Philippe Heeren, a regulatory partner at Reed Smith, expressed concerns that these measures could potentially undermine the objectives of the new rules, particularly affecting partner countries that do not contribute to global overcapacity.
Why It's Important?
The proposed measures are significant as they aim to address trade-related challenges faced by Europe's steel industry, including import pressures in terms of volume and price. The requirement for melt-and-pour data could lead to discrepancies between the country of origin and the country of melt-and-pour, complicating trade dynamics. The European steel industry has been under pressure, with EU steel exports to the US falling by 30% in the second half of 2025 compared to the previous year. These figures highlight the need for fair and enforceable EU-US trade agreements. The measures could impact international trade relations and the competitiveness of European steel producers.
What's Next?
The European Commission must assess within two years whether it is necessary to designate the country of melt-and-pour as the basis for drawing on country-specific quotas. This assessment will be crucial in determining the future of the steel import regulations and their impact on trade dynamics. Stakeholders, including steel producers and trade associations, are likely to engage in discussions and negotiations to ensure that the measures do not adversely affect their interests. The outcome of these assessments and negotiations will shape the future of steel trade between the EU and its partner countries.
