Commission Implementing Regulation (EU) 2024/1782 of 24 June 2024 amending Implementing Regulation (EU) 2019/159, including the prolongation of the safeguard measure on imports of certain steel products

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	2024/1782	25.6.2024

THE EUROPEAN COMMISSION,

Having regard to Regulation (EU) 2015/478 of the European Parliament and of the Council of 11 March 2015 on common rules for imports ¹ and in particular Articles 16, 19 and 20 thereof,

Having regard to Regulation (EU) 2015/755 of the European Parliament and of the Council of 29 April 2015 on common rules for imports from certain third countries ², and in particular Article 16 thereof,

Whereas:

1. BACKGROUND

• (1) By Commission Implementing Regulation (EU) 2019/159 ³ (‘the Definitive Safeguard Regulation’), the European Commission (‘the Commission’) imposed a definitive safeguard measure on certain steel products (‘the safeguard measure’), which consists of tariff-rate quotas (‘TRQs’) with respect to certain steel products (‘the product concerned’) covering 26 steel product categories, set at levels preserving traditional trade flows on a per-product-category basis. A 25 % tariff duty applies only if the quantitative thresholds of these TRQs are exceeded. The safeguard measure was imposed for an initial period of three years, until 30 June 2021.

• (2) By Commission Implementing Regulation (EU) 2021/1029 ⁴ (‘the First Prolongation Review Regulation’), the Commission concluded that the measure continued to be necessary to prevent or remedy serious injury, and that the Union industry was adjusting. It also concluded that the prolongation of measure was in the interest of the Union. Accordingly, it decided to prolong the safeguard measure until 30 June 2024.

• (3) In recital (161) of the Definitive Safeguard Regulation, the Commission committed to “carry out an assessment of the situation on a regular basis and consider a review at least at the end of each year of imposition of measures”. In this spirit, the Commission conducted three functioning review investigations in 2019 ⁵, 2020 ⁶ and 2022 ⁷ respectively. In June 2023 ⁸ it also assessed, in a review investigation, whether an early termination of the measure was warranted ⁹.

• (4) On 12 January 2024, the Commission received a substantiated request by fourteen EU Member States to examine, pursuant to Article 19 of Regulation (EU) 2015/478 of the European Parliament and of the Council ¹⁰ (‘EU Basic Safeguard Regulation’) and Article 16 of Regulation (EU) 2015/755, whether the existing safeguard measure should be prolonged. The Commission considered that the request contained sufficient evidence to initiate a prolongation review investigation.

• (5) Accordingly, it published a Notice of Initiation ¹¹ in the Official Journal of the European Union on 9 February 2024 concerning the possible extension of the safeguard measure. The Commission also included in the scope of the Notice a commitment to assess whether any technical adjustment to the functioning of the measure would be necessary in case it concluded that the safeguard measure should be prolonged.

2. PROCEDURE

• (6) In order to carry out a proper assessment as to whether the safeguard measure continues to be necessary to prevent or remedy serious injury, whether the Union steel industry is adjusting, and whether such prolongation is in line with the wider Union interest, the Commission collected specific data from the Union industry by means of questionnaires ¹². These data included, inter alia, the evolution of key economic and financial indicators for the product concerned during the period 2021-2023 (‘the period considered’), as well as evidence that the Union industry is adjusting.

• (7) The Commission also sought and collected the views of interested parties on a potential prolongation and on any potential necessary adjustments to the functioning of the measure, therefore conducting two different investigations in parallel. To this end, the Notice of Initiation invited interested parties to participate in the investigation by submitting in writing their observations and supporting evidence and also requested known Union producers of the product concerned and their associations to fill in injury questionnaires. Concerning the functioning review, the Commission requested interested parties to make their views known and to submit specific evidence in writing on the following issues:

• (a) Allocation and management of tariff-rate quotas;

• (b) Crowding out of traditional trade flows;

• (c) Update of the list of World Trade Organisation (‘WTO’) developing country Members excluded from the scope of the measure based on their most recent level of imports;

• (d) Level of liberalisation;

• (e) Other changes of circumstances that may require an adjustment to the level or allocation of the tariff-rate quota.

• (8) In terms of due process, the prolongation and functioning review investigation comprised a two-stage written procedure, under which interested parties, first, submitted their comments and, subsequently, were given the possibility to rebut the other parties’ submissions. Overall, the Commission received over 65 submissions and rebuttals from interested parties within the established deadlines. It also received more than 100 individual questionnaire replies from Union producers.

• (9) In assessing whether the conditions to prolong the safeguard measure were met, the Commission analysed in the first place, whether the legal requirements to prolong a safeguard measure under EU and WTO rules, namely whether the measure is necessary to prevent serious injury (Section 3.2) and whether the Union industry is adjusting (Section 3.3), were satisfied. Second, it assessed whether such prolongation would be in line with the overall interest of the Union (Section 3.4). Finally, in its assessment, the Commission took due account of the observations and evidence received from interested parties, as well as any other available information in relation to the above elements. The Commission specifically addressed the relevant claims made by interested parties relative to prolongation in Section 4.

• (10) Subsequently, the Commission assessed the need to make certain technical adjustments to the measure. This exercise followed the areas set out in the Notice of Initiation (see recital (7)), and also included a technical amendment which brings imports from Mozambique within the scope of the safeguard measure.

3. PROLONGATION ASSESSMENT

3.1.   Legal requirements

• (11) According to Article 7.1 of the WTO Agreement on Safeguards and Article 19(2) of the EU Basic Safeguard Regulation the period of application of a safeguard measure may be extended provided that the safeguard measure continues to be necessary to prevent or remedy serious injury (‘necessity test’) and that there is evidence that the industry is adjusting. In addition, Article 22 of the EU Basic Safeguard Regulation determines that measure has to be in the interest of the Union.

3.2.   Whether the safeguard measure continues to be necessary to prevent or remedy serious injury (Necessity Test)

• (12) With regard to the first legal criterion, the Commission first examined the economic situation of the Union industry based on the questionnaire replies received (Section 3.2.1). Subsequently, the Commission assessed several key factors in order to determine how imports would likely evolve and how such evolution would affect Union producers in the absence of a safeguard (‘counterfactual analysis’, see Section 3.2.2.).

3.2.1.   Economic situation of the Union steel industry

• (13) In order to assess the economic situation of the Union steel industry, the Commission issued questionnaires to the known Union steel producers to collect information on injury indicators for the product concerned during the period considered. The Commission requested the known Union industry associations (EUROFER - European Steel Association, ESTA – European Steel Tube Association and CET-Comité Européen de la Tréfilerie) to distribute the questionnaires among their individual members. In addition, the Commission notified the known Union producers of the request to fill in questionnaires through the open file system (TRON). ¹³ The questionnaires were also made available on the website of the European Commission’s Directorate-General for Trade. ¹⁴ All the relevant instructions regarding questionnaires were also included in the Notice of Initiation.

• (14) The Commission received more than 100 individual questionnaire replies from members of the three known Union industry associations as well as from other Union producers not members of any association. In addition, the three industry associations consolidated the data provided individually by their members.

• (15) The Commission consolidated the data directly received from Union producers individually and crosschecked its accuracy with the dataset submitted by the Union industry associations in dedicated remote crosscheck sessions. The Commission then merged the association members’ replies with the replies received from producers not members of an association into a single consolidated dataset, which constituted the basis for the assessment of the economic situation of the Union industry.

• (16) The evolution of the injury indicators during the period considered is shown in Tables 1 to 4 below:

(a) Production, production capacity, capacity utilisation, stocks

Table 1

Production, production capacity, capacity utilisation, stocks

in 1 000 tonnes	2021	2022	2023
Production volume of the product concerned	178 257	158 704	154 158
index 2021 = 100	100	89	86
Production capacity for the product concerned	231 509	229 881	230 139
index 2021 = 100	100	99	99
Capacity utilisation	77,00  %	69,04  %	66,98  %
Stocks	32 082 625	30 434 986	31 214 413
index 2021 = 100	100	95	97
Source: Industry data and questionnaire replies.	Source: Industry data and questionnaire replies.	Source: Industry data and questionnaire replies.	Source: Industry data and questionnaire replies.

• (17) Over the period considered, the production volume of Union producers steadily decreased by -11 % in 2022 and by -14 % in 2023, when compared to 2021. Production capacity remained stable throughout the period and, thus, capacity utilisation followed a declining trend, reaching a very low level of 67 % in 2023. Lastly, stocks went down by -5 % in 2022 and by -3 % in 2023 as compared to the year 2021.

(b) Union consumption, domestic sales and market share ¹⁵

Table 2

The Union consumption, domestic sales and market share

	2021	2022	2023
Consumption in 1 000 tonnes	161 072	148 065	139 207
index 2021 = 100	100	92	86
Domestic sales in 1 000 tonnes	127 188	116 462	111 165
index 2021 = 100	100	92	87
Market share in %	79,0  %	78,7  %	79,9  %
Source: Industry data and questionnaire replies.	Source: Industry data and questionnaire replies.	Source: Industry data and questionnaire replies.	Source: Industry data and questionnaire replies.

• (18) Consumption in the Union market started decreasing in 2022 (-8 %), and this trend continued in 2023 (-14 %) when compared to the year 2021. The evolution of domestic sales volume by Union producers followed a very similar trend during the period considered (-8 % in 2022 and -13 % in 2023 respectively when compared to 2021). During the period considered, the Union industry increased its market share by 0,9 percentage points.

(c) Unit sales price, profitability, cash flow and return on capital employed

Table 3

Unit sales price, profitability, cash flow and return on capital employed

	2021	2022	2023
Unit sales price (EUR/tonne)	914	1 230	1 028
index 2021 = 100	100	135	113
Profitability (% turnover)	9,4  %	10,3  %	0,3  %
Cash flow (million EUR)	5 024	10 696	7 881
index 2021 = 100	100	213	157
Return on capital employed (%)	25,2  %	22,5  %	–2,2  %
Source: Industry data and questionnaire replies.	Source: Industry data and questionnaire replies.	Source: Industry data and questionnaire replies.	Source: Industry data and questionnaire replies.

• (19) Unit sales price increased by 35 % in 2022 and by 13 % in 2023 when compared to 2021. Cash flow increased by 113 % in 2022 and 57 % in 2023 when compared to the year 2021. Return on capital employed decreased slightly in 2022 and reached negative figures in 2023 (–2,2 %).

• (20) The increase in prices and post-COVID recovery drive turned the Union industry into profit-making in 2021 (9.4 %) with profits slightly increasing in 2022 (10.3 %). In 2023 profitability sharply declined, reaching only a 0.3 % profit.

(d) Employment

Table 4

Employment

(FTE)	2021	2022	2023
Employment	180 958	181 913	179 867
index 2021= 100	100	101	99
Source: Industry data and questionnaire replies.	Source: Industry data and questionnaire replies.	Source: Industry data and questionnaire replies.	Source: Industry data and questionnaire replies.

• (21) Employment remained stable throughout the period considered, with a -1 % decline in 2023 when compared to 2021.

Conclusion

• (22) Injury indicators showed that in 2021 the Union industry reached healthy levels of profitability, largely driven by high prices and a strong recovery in demand after COVID-19. However, as from the second half of 2022, the Union industry started to show signs of deterioration. Some important indicators such as production, sales and capacity utilisation showed a negative trend ¹⁶, and energy costs increased significantly ¹⁷. The deterioration of most economic indicators became more acute in 2023, with a decline in prices in a context of energy costs higher than past average levels, and a sharp decline in domestic sales and production in the Union market. As a result, the capacity utilisation reached the lowest level in the last decade and profitability went down drastically (reaching break-even level). Whilst the Union industry gained almost one percentage point of market share in 2023 when compared to 2021 at the expense of reducing profitability, this development should be seen in the context of persistent high import pressure ¹⁸, with imports reaching a higher market share during the period considered than those of previous periods ¹⁹, as it will be explained in Section 3.2.2. below.

• (23) Based on the above indicators (Tables 1 to 4), the Commission concluded that the state of the Union industry had deteriorated between 2021 and 2023 and that it was in a fragile situation at the end of the period considered.

Additional analysis per product family

• (24) Following the approach of the original investigation, ²⁰ the Commission also assessed the evolution of injury indicators per product family. ²¹ The product families covered by the steel safeguard are flat products, long products and tubes.

• (25) Tables 5 to 8 below show the evolution of the injury indicators per product family:

Table 5

Production, production capacity, capacity utilisation, stocks

in 1 000 tonnes	2021	2022	2023
Production volume of the product concerned (flat)	133 919	118 680	117 230
index 2021 = 100	100	89	88
Production volume of the product concerned (long)	38 061	33 729	30 848
index 2021 = 100	100	89	81
Production volume of the product concerned (tubes)	6 277	6 295	6 080
index 2021 = 100	100	100	97
Production capacity for the product concerned (flat)	168 949	167 811	168 540
index 2021 = 100	100	99	100
Production capacity for the product concerned (long)	50 958	50 622	50 219
index 2021 = 100	100	99	99
Production capacity for the product concerned (tubes)	11 602	11 449	11 380
index 2021 = 100	100	99	98
Capacity utilisation (flat)	79,27  %	70,72  %	69,56  %
Capacity utilisation (long)	74,69  %	66,63  %	61,43  %
Capacity utilisation (tubes)	54,10  %	54,99  %	53,43  %
Stocks (flat)	25 377	22 941	24 042
index 2021 = 100	100	90	95
Stocks (long)	3 349	3 468	3 274
index 2021 = 100	100	104	98
Stocks (tubes)	3 357	4 026	3 899
index 2021 = 100	100	120	116
Source: Industry data and questionnaire replies.	Source: Industry data and questionnaire replies.	Source: Industry data and questionnaire replies.	Source: Industry data and questionnaire replies.

Table 6

The Union consumption, domestic sales and market share

	2021	2022	2023
Consumption in 1 000 tonnes (flat)	92 700	84 749	81 344
index 2021 = 100	100	91	88
Consumption in 1 000 tonnes (long)	57 398	53 223	48 072
index 2021 = 100	100	93	84
Consumption in 1 000 tonnes (tubes)	10 973	10 093	9 790
index 2021 = 100	100	92	89
Domestic sales in 1 000 tonnes (flat)	68 864	63 050	61 409
index 2021 = 100	100	92	89
Domestic sales in 1 000 tonnes (long)	50 011	45 512	42 139
index 2021 = 100	100	91	84
Domestic sales in 1 000 tonnes (tubes)	8 312	7 900	7 617
index 2021 = 100	100	95	92
Market share in % (flat)	74,3  %	74,4  %	75,5  %
Market share in % (long)	87,1  %	85,5  %	87,7  %
Market share in % (tubes)	75,8  %	78,3  %	77,8  %
Source: Industry data and questionnaire replies.	Source: Industry data and questionnaire replies.	Source: Industry data and questionnaire replies.	Source: Industry data and questionnaire replies.

Table 7

Unit sales price, profitability, cash flow and return on capital employed

	2021	2022	2023
Unit sales price (EUR/tonne) (flat)	971	1 309	1 104
index 2021 = 100	100	135	114
Unit sales price (EUR/tonne) (long)	759	1 016	804
index 2021 = 100	100	134	106
Unit sales price (EUR/tonne) (tubes)	1 177	1 581	1 382
index 2021 = 100	100	134	117
Profitability (% turnover) (flat)	10,6  %	11,0  %	0,1  %
Profitability (% turnover) (long)	7,6  %	9,6  %	–1,0  %
Profitability (% turnover) (tubes)	5,1  %	7,3  %	5,6  %
Cash flow (million EUR) (flat)	3 434	6 326	5 999
index 2021 = 100	100	184	175
Cash flow (million EUR) (long)	1 439	3 509	682
index 2021 = 100	100	244	47
Cash flow (million EUR) (tubes)	151	861	1 200
index 2021 = 100	100	571	795
Return on capital employed (%) (flat)	29,04  %	26,64  %	–3,24  %
Return on capital employed (%) (long)	16,95  %	18,31  %	–3,15  %
Return on capital employed (%) (tubes)	29,31  %	11,00  %	7,81  %
Source: Industry data and questionnaire replies.	Source: Industry data and questionnaire replies.	Source: Industry data and questionnaire replies.	Source: Industry data and questionnaire replies.

Table 8

Employment

(FTE)	2021	2022	2023
Employment (flat)	114 657	114 444	114 053
index 2021 = 100	100	100	99
Employment (long)	40 053	39 870	39 485
index 2021 = 100	100	100	99
Employment (tubes)	26 248	27 599	26 329
index 2021 = 100	100	105	100
Source: Industry data and questionnaire replies.	Source: Industry data and questionnaire replies.	Source: Industry data and questionnaire replies.	Source: Industry data and questionnaire replies.

• (26) Based on the above indicators, the analysis per product family, corroborates the findings for the product concerned: the Union industry’s economic situation significantly worsened over the period considered and it is currently in a fragile situation. Even for the product family that showed a better performance as regards to profitability and market share developments (tubes), it nevertheless saw a deterioration of other key indicators such as capacity utilisation, levels of production and domestic sales over the period considered.

3.2.2.   Counterfactual analysis

(a) Import pressure - Evolution of imports and market share

• (27) The Commission assessed the evolution of imports, both in overall terms and relative to consumption, to determine the extent of pressure they may have exerted on the Union market in the period considered. In addition, the Commission assessed the evolution of TRQs used (See Section 3.2.2(b)).

• (28) Imports into the Union in 2023 decreased by -17 % as compared to 2021, when they had reached the second highest level since 2013 ²².

Table 9

Evolution of imports

	2021	2022	2023
Volume of imports 1 000 tonnes	33 884	31 603	28 042
index 2021 = 100	100	93	83
Source: EUROSTAT.	Source: EUROSTAT.	Source: EUROSTAT.	Source: EUROSTAT.

• (29) The analysis at the level of product family confirmed this overall trend as shown in Table 10 below.

Table 10

Market share of imports per product family

	2021	2022	2023
Consumption in 1 000 tonnes (flat)	92 700	84 749	81 344
index 2021 = 100	100	91	88
Consumption in 1 000 tonnes (long)	57 398	53 223	48 072
index 2021 = 100	100	93	84
Consumption in 1 000 tonnes (tubes)	10 973	10 093	9 790
index 2021 = 100	100	92	89
Imports in 1 000 tonnes (flat)	23 835	21 699	19 935
index 2021 = 100	100	91	84
Imports in 1 000 tonnes (long)	7 387	7 711	5 933
index 2021 = 100	100	104	80
Imports in 1 000 tonnes (tubes)	2 661	2 192	2 174
index 2021 = 100.	100	82	82
Market share in % (flat)	25,7  %	25,6  %	24,5  %
Market share in % (long)	12,9  %	14,5  %	12,3  %
Market share in % (tubes)	24,2  %	21,7  %	22,2  %
Source: Industry data, questionnaire replies and EUROSTAT.	Source: Industry data, questionnaire replies and EUROSTAT.	Source: Industry data, questionnaire replies and EUROSTAT.	Source: Industry data, questionnaire replies and EUROSTAT.

• (30) The Commission assessed the evolution of imports against the evolution of consumption over the same period. The graph below shows that consumption peaked in 2017-2018. However, in 2023 it saw a drastic reduction, reaching the lowest level since 2013 ²³. On other hand, the share of imports saw a steep and continuous increase until 2018, when the safeguard measure was introduced provisionally in July, and moderately decreased in the following two years. However, since 2021, the share of imports increased again, and it remains at levels substantially above those prior to the imposition of the safeguard measure. Therefore, the investigation concluded that the level of import pressure in terms of market share, is even higher than the levels prior to the imposition of the safeguard measure ²⁴ and those established under the First Prolongation Review Regulation ²⁵.

Image omitted; see official source

• Sources: For imports, Eurostat. For consumption, EU industry questionnaire replies as provided in the original investigation (years 2013-2017), First Prolongation Review investigation (years 2018-2020) and Second Prolongation Review investigation (years 2021-2023) respectively.

(b) Import pressure - Evolution of TRQ Use

• (31) The Commission also assessed import pressure in light of the evolution of TRQ use. ²⁶ First, the Commission assessed the evolution of TRQ since the First Prolongation Review Regulation. The data in the graph below shows the TRQ volumes available at the end of each of the last two safeguard years ²⁷, showing an average TRQ use of around 46 % at the end of the last quarter of a safeguard year (April-June) with between 7 and 8.5 million tonnes of TRQ unused in years 4 and 5 respectively. Under the current safeguard year ²⁸ (data available until 21 May 2024) the trend of TRQ available seems to be comparable. Therefore, the Commission did not observe a major change when looking at the overall TRQ use at the end of the last two safeguard years, including the ongoing year.

Image omitted; see official source

• Source: DG TRADE calculation based on data available at DG TAXUD quota use database: https://ec.europa.eu/taxation_customs/dds2/taric/quota_consultation.jsp.

• (32) Second, the Commission assessed the most recent developments by looking into the TRQ use so far in the ongoing safeguard year ²⁹ on a quarterly basis.

• (33) The TRQ use analysis confirmed that there had been significant and increasing volumes of TRQ unused, reaching around 7 million tonnes unused at the end of the quarter January-March 2024. As a result, the TRQ use after three quarters stood at 47%, as shown in the graph below. However, in assessing import pressure, the TRQ use rate needs to be analysed together with the evolution of imports’ share in Section 3.2.2.(a), which showed an average increase compared to previous periods and with a more granular assessment, as the one undertaken further below in this Section. In particular, considering that the TRQ volumes have increased by around 25 % since 2019 on account of liberalisation and initial top-up and that consumption has decreased substantially and is not expected to recover meaningfully in the near future.

Image omitted; see official source

• Source: DG TRADE calculation based on data available at DG TAXUD quota use database: https://ec.europa.eu/taxation_customs/dds2/taric/quota_consultation.jsp.

• (34) In fact, a more detailed analysis of this data revealed that on average, during the three quarters assessed, 21 individual TRQs (whether country-specific or residual) were exhausted across several product categories. Their combined average volumes represented 32% (nearly two million tonnes per quarter) of the total average volume of imports in the same period.

• (35) In terms of origins, the investigation also confirmed that a relevant number of these TRQs were exhausted by some of the largest steel exporting countries to the Union ³⁰, which were exhausting from one to up to eight of their respective country-specific TRQs in a given quarter ³¹. Similar export patterns were already identified by the Commission in the First Prolongation Review Regulation. ³² In addition, the largest TRQ under the measure (the residual TRQ in category 1) was consistently exhausted almost immediately during the last three consecutive quarters, showing a continuous opportunistic behaviour from certain third countries. ³³

• (36) The exhaustion of TRQs and the pace of such exhaustion in some cases are an indicator of those TRQs where it was more likely that additional volumes would have penetrated in the Union market absent the safeguard measure. In this regard, the safeguard measure was thus preventing additional import pressure from taking place. Therefore, in view of this data, the Commission concluded that these patterns of TRQ use, which took place to different extents across all product families, further confirmed the high level of import pressure existing on the Union steel market.

(c) Evolution of worldwide exports by main steel exporting countries and of consumption in their domestic markets

• (37) Imports into the Union decreased by -17 % in 2023 as compared to 2021 ³⁴. At the same time, as shown in Table 11 below, during the same period imports into the US market also decreased by -8 % and continued to be substantially lower than the peak reached in 2017, prior to the imposition of the US Section 232 measure. In 2023 imports had reduced by nearly 6 million tonnes as compared to 2017, this is, the last year pre-Section 232.

Table 11

Imports into United States in tonnes

Year	2017	2021	2022	2023
Total Third countries (excluding EU)	21 933 440	17 977 836	19 473 713	16 405 997
Source: United States International Trade Commission().	Source: United States International Trade Commission().	Source: United States International Trade Commission().	Source: United States International Trade Commission().	Source: United States International Trade Commission().

• (38) After having identified the evolution of import volumes into the two largest steel importing markets (the Union and the USA) ³⁶, the Commission analysed the export performance of the main steel supplying countries to the Union ³⁷ to third countries (other than the EU and the USA).

• (39) Table 12 below shows that, overall, the main exporting countries to the Union of the product concerned substantially decreased their exports to other third markets over the period considered. An individual assessment of these countries’ export performance also confirmed a widespread negative trend of the evolution of exports to markets other than the Union and the USA ³⁸.

Table 12

Evolution of exports (excluding to the EU and USA) of the product concerned from main steel supplying countries to the EU to third markets (excluding China)

Year	2021	2022	2023	% variation	Variation in tonnes
Tonnes	100 433 268	85 647 917	80 921 385	-19  %	-19 511 882
Source: Global Trade Atlas. This database gathers statistical information supplied by the national customs statistical offices from each country: https://www.spglobal.com/marketintelligence/en/mi/products/maritime-global-trade-atlas.html.	Source: Global Trade Atlas. This database gathers statistical information supplied by the national customs statistical offices from each country: https://www.spglobal.com/marketintelligence/en/mi/products/maritime-global-trade-atlas.html.	Source: Global Trade Atlas. This database gathers statistical information supplied by the national customs statistical offices from each country: https://www.spglobal.com/marketintelligence/en/mi/products/maritime-global-trade-atlas.html.	Source: Global Trade Atlas. This database gathers statistical information supplied by the national customs statistical offices from each country: https://www.spglobal.com/marketintelligence/en/mi/products/maritime-global-trade-atlas.html.	Source: Global Trade Atlas. This database gathers statistical information supplied by the national customs statistical offices from each country: https://www.spglobal.com/marketintelligence/en/mi/products/maritime-global-trade-atlas.html.	Source: Global Trade Atlas. This database gathers statistical information supplied by the national customs statistical offices from each country: https://www.spglobal.com/marketintelligence/en/mi/products/maritime-global-trade-atlas.html.

• (40) In view of these figures, the Commission concluded that in addition to having lower volumes of exports to the Union market (Table 9) and to the US market (Table 11) these countries were generally not able to replace their export volumes lost in the two largest importing markets by exporting them to other markets. Thus, in overall terms, the main steel exporting countries to the Union had lost substantial amounts of export volumes worldwide.

• (41) The Commission further supplemented its own assessment with the analysis carried out by the OECD on a broader product scope. The OECD data confirmed the Commission’s own assessment that the volume of exports of the main steel exporting countries had overall consistently decreased over the period considered ³⁹.

• (42) The only notable exception from this otherwise consistent trend concerned the performance of Chinese exports, which surged in 2023, reaching around 95 million tonnes of exports. This represented an increase in exports of 24 million tonnes (+40%). ⁴⁰ The exports increase by China, given its sheer magnitude, would mask the decrease of exports identified for virtually all other large exporting countries. For this reason, China is not included in the aggregated analysis of Table 12 above.

• (43) In fact, the additional pressure exerted by Chinese exports substantially increased competition in other third country markets ⁴¹. This has reduced further the availability and size of export markets across the world ⁴² and contributed to the other countries’ reduction of exports.

• (44) In this regard, OECD data revealed that despite most of the largest steel exporters reducing their exports, imports in many of the large import markets apart from the EU and the USA showed an upwards trend ⁴³. This appears to be, in several of these markets at least (e.g. ASEAN ⁴⁴, Korea, Türkiye ⁴⁵, Brazil ⁴⁶), driven precisely by the surge of Chinese exports ⁴⁷. Furthermore, the data from the first months of 2024 does not show signs that this export behaviour from China is reversing ⁴⁸.

• (45) In connection to this development of Chinese exports, the Commission also assessed the correlation and impact that such drastic increase of Chinese exports to third countries had on the Union market in terms of import flows.

• (46) The Commission confirmed that imports from some of the origins where China had increased substantially its export presence in 2023 (including Vietnam, Indonesia, and Malaysia) ⁴⁹ as well as other countries usually competing in such Asian markets with China (Japan ⁵⁰) had surged in the Union market in 2023 ⁵¹. Such increases were even more acute if compared to the period prior to the imposition of the safeguard measure. Hence, the data analysed strongly suggests that, in an overall context of weaker consumption, this strong and increasing import pressure from China in certain third markets pushed producers in some countries into finding other export markets for part of their production, amongst which, the Union market ⁵².

• (47) As a next step, the Commission assessed the evolution of domestic consumption of the main steel exporting countries ⁵³ over the period considered.

Table 13

Consumption evolution in the main steel-making markets (including the main exporting countries to the EU)

Year / Product	HR coil and coil plate	CR coil	HDG + EZ coil	Tinplate	Reversing mill plate	Rebar + wire rod	Merchant bar + Structural Sections	Rail	all - incl. China	China	without China
2018	501 094	172 656	87 022	8 539	110 692	495 876	190 878	8 137	1 574 894	964 829	610 065
2019	505 033	167 801	90 303	8 820	113 426	531 934	197 669	8 710	1 623 696	1 024 141	599 556
2020	518 795	176 849	91 167	8 371	121 359	552 592	211 095	8 111	1 688 338	1 141 389	546 949
2021	544 636	182 974	90 038	8 094	118 641	547 644	207 966	7 050	1 645 904	1 050 573	595 331
2022	532 646	173 302	87 504	7 317	119 759	516 659	200 983	7 175	1 707 043	1 085 222	621 821
2023	559 856	181 132	92 419	8 020	126 071	502 780	200 126	7 376	1 677 781	1 068 225	609 556
Source: CRU database (available upon subscription).	Source: CRU database (available upon subscription).	Source: CRU database (available upon subscription).	Source: CRU database (available upon subscription).	Source: CRU database (available upon subscription).	Source: CRU database (available upon subscription).	Source: CRU database (available upon subscription).	Source: CRU database (available upon subscription).	Source: CRU database (available upon subscription).	Source: CRU database (available upon subscription).	Source: CRU database (available upon subscription).	Source: CRU database (available upon subscription).

• (48) Table 13 ⁵⁴ above shows that, in overall terms, consumption in the domestic markets of the main steel exporters went down in 2022 ⁵⁵ by 61 million tonnes (-4 %) with respect to 2021 ⁵⁶. Out of this, Chinese consumption experienced the sharpest decline in overall volumes, with a reduction of -34 million tonnes. In 2023 the overall decrease compared to 2021 was -2 % (–29,2 million tonnes).

• (49) The analysis in this Section confirmed that the main steel exporters are experiencing increasing difficulties to export part of their production to third markets (see also Section 3.2.2.(e) and (f) below). In addition, data showed that it would hardly have been possible to direct the lost export volumes to their own domestic markets in view of the consumption evolution. This resulted in a significant loss of volumes sold both domestically and in third countries for many of the largest steel suppliers to the Union.

(d) Overcapacity

• (50) The evolution of global overcapacity was a key element in the Commission’s decision underpinning the imposition of a definitive safeguard measure in February 2019 ⁵⁷ and its prolongation in June 2021 ⁵⁸. In the current investigation, the Commission assessed the latest developments of steel overcapacity, relying on sources such as the OECD Steel Committee and the Global Forum on Steel Excess Capacity (GFSEC), which confirm, in their most recent reports, that overcapacity remains at very high levels ⁵⁹.

• (51) According to these sources, in 2023, global steelmaking capacity was estimated to have exceeded production by over 550 million metric tonnes. This is equivalent to the combined steel production of India, the Americas, EU, Japan, and Türkiye in 2023 ⁶⁰, and it amounts to four times the consumption in the Union market in 2023.

• (52) This data therefore showed that the situation of overcapacity has not improved since the imposition of the steel safeguard in 2019. Rather, it continues to be a serious problem in the steel sector, and it is not expected to improve in the near future. In fact, when assessing the likely developments on global overcapacity, the Commission also confirmed that the situation is poised to deteriorate further. The OECD reported that about 160 million metric tonnes of new capacity is planned to be installed between 2024-2026 ⁶¹. Such new capacities, which are larger than the Union’s yearly consumption, would be added in a period where global steel demand is projected to grow modestly, risking increasing the gap between capacity and demand even further and thus, exacerbating the overcapacity situation.

• (53) In addition, the information analysed confirmed that the Union was virtually the only major steelmaking region where installed capacity had decreased in the period 2018-2023 and thus did not contribute to the current trends in global overcapacity ⁶².

• (54) The Commission further confirmed the information on overcapacity with the data from the CRU database ⁶³ for the main steel-making countries worldwide, which include the main steel-exporting countries to the Union market.

• (55) Therefore, the Commission concluded that overcapacity remained at very high levels and was likely to increase even further.

• (56) In addition to assessing the latest evolution of global overcapacity, the Commission analysed the links between growing excess capacity in some countries and regions, and the evolution of imports into the Union from such origins. This assessment was based on import statistics as well as on the specific research on overcapacity evolution done by the OECD Steel Committee ⁶⁴ and the GFSEC ⁶⁵.

• (57) According to GFSEC “in recent years, risks of overinvestment have become increasingly apparent in Southeast Asia, parts of the Middle East and Africa, where such capacity increases exceed local demand for steel by a very wide margin”. The document added that “Viet Nam, Indonesia and Malaysia have experienced capacity growth rates in excess of 35 % to 95 %, while steel demand has either declined or increased marginally (…) and that certain other economies in the Middle East, South Asia and Northern Africa are also registering imbalanced growth (e.g., Iran, Pakistan and Algeria)” ⁶⁶.

• (58) For its part, this information was also in line with that supplied at country-level by the OECD, showing a significant increase in capacity in these (as well as other) origins ⁶⁷. In this respect, the investigation also revealed that part of these capacity additions was driven by Chinese overseas investments, in particular but not limited to the ASEAN region ⁶⁸.

• (59) When assessing the evolution of imports into the Union per origin, the Commission identified that in the period 2022-2023, imports from certain origins ⁶⁹ had surged ⁷⁰, despite the safeguard measure being in place. Imports from these origins were not amongst the Union’s traditional suppliers and in some cases were almost non-existent prior to the safeguard measure and during its first years of application. As such, they did not qualify for a country-specific quota (CSQ) and therefore they were using the space available under the residual TRQs to penetrate into the Union market at a very fast pace and with high volumes. Such abrupt presence generated significant disturbances on the market and in some instances undermined the effectiveness of the measure (See Section 7.3 below). The graph below shows the evolution of imports into the Union from some of these origins.

Image omitted; see official source

• Source: Eurostat.

• (60) The graph shows that imports from these origins increased by almost 4 million tonnes in 2023 as compared to the year 2017, prior to the safeguard measure.

• (61) Therefore, the analysis of the data available showed a direct correlation between the import evolution from certain origins into the Union market, and the evolution and state of overcapacity these origins, in addition to the increased presence of Chinese exports in some of them. As developed in Section 7.3 below, the investigation confirmed that such aggressive penetration in a market subject to a safeguard was already having a negative impact on the Union industry, and therefore further actions concerning the functioning of the measure to offset such effects were necessary.

(e) Third country measures, including US Section 232

• (62) In the Definitive Safeguard Regulation, the Commission found that the US Section 232 measures on certain steel products were likely to cause considerable trade diversion to the Union market of exports originally destined to the US market, if no remedial action was taken by the Union. In its Definitive Safeguard Regulation, the Commission concluded that there was evidence that the first signs of trade diversion had already been taking place in 2018 ⁷¹. In the First Prolongation Review Regulation, the Commission confirmed that the risk of trade diversion stemming from this measure remained ⁷². Furthermore, in the context of the Third Functioning Review Regulation, the Commission conducted a specific detailed assessment of the impact of this measure on potential trade flows into the Union market. In that assessment, the Commission concluded that the risk of trade diversion remained, despite the changes that the US Section 232 had undergone ⁷³.

• (63) In the current investigation the Commission assessed the latest status of the US measure to determine whether the previous findings remained valid. The investigation confirmed that the measure remained in place and that it had not been subject to any substantial changes in terms of scope or functioning since the last time the Commission assessed it in 2023 ⁷⁴. Furthermore, based on the information available ⁷⁵, it appeared reasonable to assume that the US Section 232 measure was not going to be removed or substantially modified in the foreseeable future.

• (64) The Commission showed in Table 11 (imports into USA) that the level of imports into the US market had remained substantially lower than in the period prior to the imposition of Section 232. In addition, as shown in Sections 3.2.2 (c) (exports to other markets and domestic consumption) the largest suppliers to the Union have generally not found other markets that would replace the volumes they formerly exported, inter alia, to the US market.

• (65) Accordingly, the risk of trade diversion into the Union market as a result of the US Section 232 measures fully remains if the Union safeguard measure were to lapse.

• (66) In addition to US Section 232, the USA also indicated that it would increase duties on imports of certain steel products from China under Section 301 ⁷⁶. This measure would increase the difficulties for China to export into the US market, creating a further risk of trade diversion, either from additional volumes of steel directly exported from China to the Union, or indirectly, through displacement of other origins in third markets due to increased Chinese presence, as already observed in Section 3.2.2 (d) above. Such volumes could then be, at least partially, directed to the Union market.

• (67) In addition to the USA, the Commission also identified new measures, other than Trade Defence Instruments (‘TDI’), ⁷⁷ adopted by other jurisdictions. For instance, in August 2023, Mexico raised from 15 % to 25 % import duties of some steel products ⁷⁸. In February 2024 Brazil raised import duties on several steel products. ⁷⁹ In April 2024, Türkiye restricted exports of certain steel products to Israel ⁸⁰.

• (68) Therefore, the investigation confirmed that the number and scope of measures adopted by third countries has continued to increase, exacerbating the risk of trade diversion as the markets available to exporters have shrunk further.

(f) Situation of trade defence measures in third countries

• (69) The evolution and state of TDI measures on steel products in third countries ⁸¹ was assessed in previous investigations ⁸². In this investigation the Commission looked into the most recent developments and confirmed that the number of TDI measures in place continued to increase and remains at high levels, as shown in the below graph.

Image omitted; see official source

• Source: WTO Trade Remedies Portal - https://trade-remedies.wto.org/en.

• (70) In addition, this graph also shows that a significant share of the measures has been imposed against the main steel exporters to the Union ⁸³. This means that these countries are experiencing increasing difficulties to export their production to third countries also as a result of the growing number of TDI measures against them.

• (71) In addition, the Commission has also observed how other jurisdictions were proposing to extend their existing safeguard measures, such as the United Kingdom ⁸⁴, or were initiating new safeguard investigations, like South Africa ⁸⁵. The growing number of trade defence measures proliferating across jurisdictions are reinforcing the difficulties for exporting countries to find outlets for their production, in a context of growing overcapacity ⁸⁶, which will contribute to increasing the already existing tensions on the market. Furthermore, the market developments observed, in particular the surge of Chinese exports amidst weak market conditions, may result in further TDI actions ⁸⁷.

(g) Attractiveness of the Union market

• (72) The Union is by far the largest steel importing market in the world in terms of volumes. ⁸⁸ In terms of price levels, import prices into the Union from its main supplying countries are consistently higher than their export prices to other third markets for a large majority of their steel exports. Based on a price assessment by the Commission, 57% to 93% of the product codes analysed per country showed higher export prices to the Union than to other third markets ⁸⁹.

• (73) This clearly indicates that exporters have a very strong interest in entering the Union market and sometimes incurring in unfair pricing conduct. In fact, in recent years the Commission has imposed a series of anti-dumping and countervailing measures on imports of steel, including on product categories covered by the safeguard ⁹⁰. This strong interest in penetrating the Union market is further revealed by some countries trying to circumvent existing TDI measures ⁹¹. The statistical trends of imports into the Union confirm the attractiveness of the Union market for exporters. Imports into the Union have, on average, even increased their market share during the period considered as compared to the period prior to the imposition of the safeguard, in a context of decreasing consumption and despite a safeguard in place. Furthermore, in some cases, available TRQs are exhausted very quickly in a given quarter, showing signs of continuous opportunistic behaviour.

• (74) In view of these elements, the Commission concluded that the Union steel market remained attractive in size and prices.

(h) Market outlooks

• (75) To complement the assessment of the factors described in Sections 3.2.2. a) to Section 3.2.2. g), the Commission also analysed the most recent market outlooks available. The outlooks pointed at a relatively slow recovery in consumption in 2024 and 2025, as compared to 2023, but still below 2021 volumes.

• (76) In its April 2024 Short Range Outlook (SRO), Worldsteel forecasted world steel demand to grow by 1.7% to 1.793 mmt in 2024 and by 1.2 %, reaching 1.815 mmt, in 2025. This modest recovery in 2024 (barely recovering 2022 figures) and 2025 would still be below demand volumes reached in 2021. The report outlined that “global economic outlook has worsened due to monetary tightening affecting consumption and investment. The construction sector, especially residential, suffers from high interest rates and costs, while infrastructure investment offers some relief. The manufacturing sector slows due to weakened demand, with consumer durables hit hard” ⁹².

• (77) For its part, the Chair statement at the March 2024 OECD Steel Committee noted that the most recent forecasts for 2024 and 2025 suggest that global steel demand growth will continue to be very sluggish ⁹³.

• (78) Lastly, EUROFER’s economic outlook was in line with the other outlooks assessed and indicated that the ongoing economic uncertainty is set to continue affecting the steel market growth over the upcoming quarters and that in 2024, steel-using sectors’ growth is projected to further decelerate (+0.2 %, revised downwards from +0.4 %), mainly due to the second recession in a row in the construction sector, before picking up moderately (+1.5 %) in 2025 ⁹⁴.

• (79) Therefore, the Commission concluded that the situation in the world steel market in general, and in the Union in particular, would continue to be challenging from the demand point of view.

3.2.3.   Conclusions on the necessity requirement

• (80) Based on the foregoing evidence and considerations, the Commission found that the Union steel industry is in a fragile situation.

• (81) The Commission also found that imports from the main steel exporting countries have exerted and still continue exerting very high and increasing import pressure on the Union’s steel market. Import pressure has been exacerbated by the sudden and quick import penetration of a variety of origins which were not present on the Union market in relevant volumes in the past. This added to the import pressure identified in previous investigations.

• (82) The Commission also confirmed high levels of overcapacity and expected capacity increases in the coming years, in a context of expected slow growth in demand. This suggests that the situation of overcapacity is not likely to improve.

• (83) Exporting countries have lost market access not only to the largest importing markets (Union and USA) but also to other third markets. In addition, their domestic consumption has also generally decreased. A surge of exports from China created an additional layer of pressure on competition on third markets, displacing volumes from other exporting countries, a trend which does not show signs of reversing in the near future.

• (84) Trade restrictive and TDI measures were on the rise and remained at high levels, thus creating additional difficulties for exporting countries to find outlets for their production. Lastly, the investigation confirmed that the Union market was attractive in terms of size and prices.

• (85) Considering the degree of global overcapacity, the high number of trade barriers across multiple jurisdictions and the existing market outlooks, the Commission concluded that should the safeguard lapse, imports into the Union would likely increase. Such increase would put additional import pressure on the fragile Union industry and hence, would likely cause serious injury. Therefore, in view of the elements analysed in Sections 3.1 and 3.2 the Commission concluded that the measure continued to be necessary to prevent or remedy serious injury to the Union industry.

3.3.   Whether there is evidence that the Union Industry is adjusting

• (86) One of the objectives of the safeguard instrument is to allow domestic producers to adjust while measures are in place. Therefore, evidence of industry adjustments is a necessary condition to prolong a safeguard measure.

• (87) In this regard, the Commission already confirmed in 2021 ⁹⁵ that the Union industry was adjusting. Actually, by the time the Commission introduced the steel safeguard in 2018, the Union industry had already initiated a process of adjustment in response to the serious crisis of the steel sector since mid-2010, when world steel demand slowed down, and capacity worldwide continued growing ⁹⁶.

• (88) In this investigation, the Commission gathered evidence of numerous adjustments made by the Union industry through questionnaire replies ⁹⁷, written submissions, and its own research (based on public available information, such as articles reporting industry adjustments in all the categories mentioned below).

• (89) The Union industry documented numerous measures to improve competitiveness in the current challenging market conditions. Since the First Prolongation Review Regulation in 2021, the Union industry continued implementing a number of restructuring measures, such as closing down less efficient or underutilised facilities ⁹⁸. This was confirmed by the capacity data provided in the questionnaire replies, which shows a slight decrease in production capacity ⁹⁹. The OECD Steel Committee data also aligned with this information, reporting that in the period 2018-2023 capacity in the Union had gone down by 5.2 million tonnes ¹⁰⁰. In connection to this type of adjustment, in April 2024, one of the largest Union producers (thyssenkrupp) announced an upcoming significant reduction of capacity of around 2.5 million tonnes in its largest production site. Thus, the Union industry undertook continuous and significant efforts to adjust to market conditions ¹⁰¹.

• (90) In addition, Union producers have also documented a variety of other adjustments to improve competitiveness, such as expanding the product portfolio, often with higher value-added products ¹⁰² and improving process efficiency and plant modernisation ¹⁰³. In this regard, the efforts of the Union steel industry have been concentrated in improving energy efficiency ¹⁰⁴, also with a view to complying with the EU emissions requirements.

• (91) The adjustments undertaken cover all the product families subject to the safeguard measure.

• (92) Therefore, the Commission concluded that the evidence showed that the Union industry has continued to adjust during the period considered.

3.4.   Union Interest

• (93) The Commission has also examined whether any compelling economic reasons exist which could lead to the conclusion that it is not in the Union interest to prolong the existing safeguard.

• (94) For this purpose, the Commission assessed the impact of possible measures on Union producers, importers and users. The assessment of the evidence available is structured as follows: i) the economic situation of Union steel producers and the possible effect of a removal of the measure; and ii) the interest of Union users and importers assessing amongst other elements, the TRQ use evolution under the safeguard and the overall availability of imports in the Union market in light of existing market outlooks.

3.4.1.   Interest of Union producers

• (95) As outlined in the First Prolongation Review Regulation, the Union steel industry has more than 500 production sites operating across 23 EU Member States. The industry directly employs more than 300 000 people, and when including indirect and induced jobs in other sectors, it is estimated that it supports 2.6 million jobs throughout the Union. In addition, different analysis undertaken by the Commission services showed the relevance of the steel industry to the Union economy [^ntr105-L_202401782EN.000101-E0105]. The current investigation confirmed that there had not been any substantial changes in this respect.

• (96) In this investigation the Commission also concluded that the measure continues to be necessary to prevent serious injury which would be likely to occur if the safeguard lapses. A situation of serious injury would seriously jeopardise the adjusting efforts being undertaken by the Union industry.

• (97) Therefore, the investigation confirmed that prolonging the measure would be in the interest of Union producers.

3.4.2.   Interest of Union users and importers

• (98) The investigation also assessed the impact that a prolongation of the measure would be likely to have on Union users and importers.

• (99) In this respect the investigation concluded that consumption in the Union had drastically decreased, and in line with this market development, there had been large volumes of TRQs consistently and increasingly unused from quarter to quarter. Furthermore, the investigation also confirmed that there had been a very large and increasing gap between the increase in TRQ volumes, on account mostly ¹⁰⁵ of regular liberalisation since 2019, as compared to the evolution of consumption ¹⁰⁶. The market outlooks also revealed that only moderate growth of Union consumption was expected to take place, and that in any event, such growth would be significantly smaller than the volumes of TRQs that remained available, usually from multiple origins, across product categories and product families.

• (100) Therefore, the Commission concluded that even if the measure is prolonged, in overall terms Union users and importers would continue to have the possibility to source free-of-duty steel across product categories from a variety of origins. In addition, the investigation also confirmed that Union producers had room to increase their capacity utilisation and could thus supply additional quantities to Union customers. Hence, the Commission confirmed that a prolongation of the measure would in overall terms not prevent Union users and importers from sourcing sufficient volumes of steel free-of-duty both from importing sources as well as from Union producers.

• (101) Furthermore, as in the First Prolongation Review Regulation ¹⁰⁷, the Commission cross-checked the potential impact that the safeguard measure ¹⁰⁸ may have had on the level of steel prices on the Union market, by comparing the trends in the Union with those in other main steel markets worldwide ¹⁰⁹. The analysis showed that the evolution of prices on the Union market was following the same or a very similar trend than that of other markets, thus indicating that the safeguard measure was not creating an anomaly in terms of price trends on the Union.

• (102) Thus, based on these findings, the Commission concluded that the submissions made by Union users and importers did not show that the prolongation would be against the overall Union interest.

3.5.   Conclusion on prolongation

• (103) The Commission has established that the legal requirements of necessity and adjustment required to prolong a safeguard measure are met. In addition, the Commission has established that the measure would not be against the overall Union interest.

• (104) Therefore, the Commission concluded that it is appropriate to prolong the steel safeguard measure beyond 30 June 2024.

4. COMMENTS BY INTERESTED PARTIES CONCERNING PROLONGATION

• (105) The Commission received over 65 submissions of observations and rebuttals from interested parties, including Union steel producers, Union steel users and importers, as well as their respective associations, exporting producers and third country governments. In this section, the Commission will address the claims made by these interested parties on prolongation. For the sake of administrative economy, the Commission grouped the claims by nature and content. Where appropriate, the Commission referred to findings in this Regulation (Sections 3 and 4) that already addressed in detail most of the claims made by interested parties. The Commission concluded that none of the arguments raised could change the Commission’s conclusion as to the appropriateness of prolonging the steel safeguard measure.

4.1.   The findings of WTO Dispute Settlement Body in dispute DS595 require the Commission to terminate the measure

• (106) Some interested parties referred to the Dispute Settlement Body (‘DSB’) Report of 29 April 2022 in the dispute DS595 European Union – Safeguard measures on certain steel products, claiming that the Commission should have automatically terminated the measure as it was inconsistent with certain provisions of the WTO Agreement on Safeguards and the General Agreement on Trade and Tariffs (‘GATT’).

• (107) In this respect, as done in previous reviews where this claim was made, the Commission refers to the Implementing Regulation (EU) 2023/104 of 13 January 2023 ¹¹⁰ whereby it implemented the DSB ruling, thus bringing the steel safeguard measure into conformity with WTO rules in the few aspects where the Panel had identified inconsistencies.

• (108) Therefore, the claims pertaining to that dispute are not pertinent in the context of the ongoing review as they were already addressed by means of a separate legal act. In any event, and as it stemmed from the logic behind Regulation (EU) 2023/104, the Commission disagreed with the claims that the findings of the Panel in that dispute would have required it to terminate the measure.

• (109) One party alleged that, according to WTO rules, WTO members had the opportunity to extend safeguard measures once. This is because the relevant text in the WTO (Article 7.3) Agreement on Safeguards refers to the word “extension” in singular. So far, there is no substantive interpretation by the Dispute Settlement Body (DSB), however, the word “extension” in Article 7.3 is preceded by the word “any”, which may suggest that more than one extension is possible. Moreover, Article 19(3) of the Basic Safeguards Regulation uses the term “extensions” in plural.

4.2.   Reduced risk of trade diversion due to changes in the US Section 232 measure

• (110) Some interested parties argued that, because of some changes in the US Section 232 measure, the risk of trade diversion would have been allegedly reduced to the point that the safeguard measure would no longer be necessary on these grounds.

• (111) This is a recurrent claim made by interested parties also in previous reviews. Therefore, the Commission assessed this issue in different occasions in the past, including the review of June 2023. ¹¹¹ In all instances, the Commission concluded that the changes in the US Section 232 measure did not alter the assessment regarding the risk of trade diversion into the Union market stemming from the US Section 232 measure ¹¹².

• (112) In the context of the current review, the changes to the US Section 232 measure referred to by interested parties took place before June 2023 and were therefore already part of the Commission’s assessment in that investigation. Therefore, no additional evidence was provided to the Commission that would make it depart from its assessment in 2023.