Commission Implementing Regulation (EU) 2025/612 of 24 March 2025 amending Commission Implementing Regulation (EU) 2019/159 imposing a definitive safeguard measure on imports of certain steel products

THE EUROPEAN COMMISSION,

Having regard to the Treaty on the Functioning of the European Union,

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 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 Articles 13 and 16 thereof,

Whereas:

(1) By Implementing Regulation (EU) 2019/159 (3) (‘the Definitive Regulation’), the European Commission (‘the Commission’) imposed a definitive safeguard measure on certain steel imports (‘the measure’). The measure consists of tariff-rate quotas (‘TRQs’) with respect to certain steel products (‘the product concerned’), covering 26 steel product categories. The TRQs are set at levels preserving traditional trade flows on a per-product-category basis. Where the relevant TRQ is exhausted, an out-of-quota duty of 25 % is levied. 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 the measure was in the interest of the Union. Accordingly, it decided to prolong the safeguard measure until 30 June 2024.

(3) By Commission Implementing Regulation (EU) 2024/1782 (5) (‘the Second Prolongation Review Regulation’), the Commission concluded that the prolongation of the measure was necessary to prevent or remedy serious injury, and that such prolongation was in the interest of the Union. It also concluded that the industry was adjusting. Accordingly, it decided to prolong the safeguard measure until 30 June 2026.

(4) In recital (161) of the Definitive 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 (6), 2020 (7) and 2022 (8) respectively. In June 2023 (9) it also assessed, in a review investigation, whether an early termination of the measure was warranted (10).

(5) On 29 November 2024, the Commission received a substantiated request by thirteen Member States to initiate a functioning review pursuant to Article 20 of Regulation (EU) 2015/478 of the European Parliament and of the Council (11) (‘EU Basic Safeguard Regulation’) and Article 16 of Regulation (EU) 2015/755 of the European Parliament and of the Council (12). The request contained evidence of a change of circumstances since the last review of the measure. In particular, the request contained information regarding the contraction in Union demand for steel, resulting in widening gaps with the current level of duty-free quota volumes as these have been continuously liberalised. Moreover, China’s steel export surges to major regions have pushed exports from other markets to the EU.

(6) According to the request, these recent market developments called for a reassessment of the allocation and management of the TRQs. In view of Article 20 of the EU Basic Safeguard Regulation and Article 8 of the Definitive Regulation, the Commission considered that the information provided, including the sources and supporting evidence, constitute a sufficient basis to initiate an investigation.

(8) The Notice invited interested parties to provide evidence and data to determine whether it would be justified to adjust the functioning of the safeguard measure in order to keep the operation of the safeguard adapted to market evolution and in line with the interest of all stakeholders.

(9) The Commission sought specific information from Union producers and users via questionnaires, which were made available to interested parties on the public file (‘TRON’) (14) as well as on the European Commission’s (DG TRADE) website (15).

(10) As in previous review investigations, the Commission devised a two-stage written procedure. First, parties had the possibility to send their submissions and where applicable, a reply to the questionnaires by 10 January 2025. The Commission made this information available on the public file and interested parties had 14 days to make comments (rebuttals phase). The Commission subsequently made the rebuttals available in TRON.

(11) The Commission received 12 questionnaire replies, 40 submissions and 22 rebuttals.

Comments from interested parties

(12) Multiple interested parties commented that neither the request from Member States for a functioning review, nor the underlying evidence was made immediately available to interested parties. An argument has been made that this has unduly restricted interested parties’ opportunity to rebut the evidence, and significantly impacted the ability of interested parties to provide meaningful contributions.

(13) Some interested parties argued that there is no legal basis for a functioning review, and others argued that conducting a functioning review based on changed circumstances is inconsistent with WTO law. One interested party mentioned that conducting a reassessment of the TRQs within six months from the previous review amounts to excessive frequency of reviewing the measure.

Commission position

(14) In the Notice of Initiation, parties were specifically invited to share their views and submit evidence concerning five grounds of review (see recital 7 above), rather than commenting on the initial request from Member States. Following a written request for information received on 3 January 2025 (16), the Commission has made the relevant documents available for inspection on TRON on 7 January 2025, as provided for in Article 5(4) of Regulation (EU) 2015/478. (17) Additionally, parties have had the chance to respond to the evidence brought forward by the Union industry in their rebuttals, for which they have received 14 days. Some interested parties requested an extension, and in two cases an extension of 10 days was given. As such, interested parties have been afforded ample opportunity to provide their comments.

(15) As per the Notice of Initiation, the legal basis for the review is Article 20 of Regulation (EU) 2015/478 of the European Parliament and of the Council, Article 16 of Regulation (EU) 2015/755 and Article 8 of Commission Implementing Regulation (EU) 2019/159. The latter explicitly provides that the Commission may review the measure in case of changed circumstances. The WTO Safeguard Agreement does not preclude such (optional) reviews besides the mandatory mid-term review.

(16) In response to the claim that conducting a reassessment of the TRQs within six months of the previous review constitutes excessive frequency, said Article 8 does not impose any time-based restrictions on when a review may be initiated. Since the purpose of the functioning review is to keep the operation of the safeguard adapted to market evolution and in line with the interests of all stakeholders, there is no time bar as to when such a review is warranted.

(17) Therefore, the timing of the current functioning review is fully consistent with the legal framework of the EU and international obligations under WTO law.

(18) In identifying the need and extent of possible adjustments, the Commission also assessed the evolution, since the last review investigation, of two key elements: overcapacity and trade measures in third countries.

(19) The situation of overcapacity continued deteriorating in the second half of 2024 and early 2025. By the end of 2024, it was estimated that the global installed capacity reached 2 482 million tonnes, representing an increase of more than 50 million tonnes compared to 2023 (18). This increase was concentrated in India, ASEAN and Middle East. Such relevant increase in capacity took place in a context of weakening global steel demand. In 2024, global steel demand went down by 1 % (-18 million tonnes) compared to 2023 (19), therefore widening the gap with installed capacity further.

(20) Going forward, significant additional capacity is expected to come on stream, with around 145 million tonnes either as ongoing or planned projects (20), while demand in 2025 is only expected to grow moderately, reaching 2023 levels, i.e. still outpaced by the sustained growth in capacity. As a result, the level of overcapacity is set to remain at very high levels. Estimates indicate that the gap between installed capacity and production may reach 630 million tonnes in 2026 (21).

(21) The concerns about the deteriorating situation of overcapacity and its negative impact on steelmakers were clearly reflected in the Global Steel Forum's Ministerial Statement of 8 October 2024 (22). The statement recalled the severe negative impact that overcapacity had on jobs, production, prices, market share, revenue and profitability of the industry, and recognised the importance to take concrete actions to address overcapacity.

(22) In this context of growing overcapacity, the Commission confirmed that Chinese steel exports continued to increase, reaching 110 million tonnes, close to record levels (23). Since the market outlook indicates a further reduction in domestic demand in China in 2025 (24), it is to be expected that the trend of high level of exports that started in 2023 and peaked in 2024, will continue.

(23) It is thus reasonable to expect that Chinese exports will continue exerting very strong pressure, both in terms of volumes and prices, across third country markets (25), thus impacting negatively competitors in those markets directly, e.g. by displacing them or by forcing them to compete against lower prices. In addition, since steelmakers in certain third countries are seeing a further gap between demand and capacity growth in their domestic markets, they would be pushed into seeking alternative outlets for their excess capacity. As a result, additional import pressure into the Union market from these origins would take place. This would add to the overall increasing level of imports’ market share seen in 2024 in the Union market.

(24) In this regard, the Commission further confirmed that since the last investigation, the import presence in the Union market of some origins where relevant capacity expansions continue (notably ASEAN, India, China, Middle East and North Africa), remains high and in some cases, has increased even further. This data showed a correlation between capacity developments and level of import pressure from those origins on the Union market (26).

(25) Therefore, the Commission confirmed that the situation and outlook of global overcapacity continue to be very worrying and expected it to lead, in the absence of adjustments, to further increased import pressure in the Union, due to increasing capacity, demand evolution and persistent pressure on third country markets.

(26) The Commission also assessed the latest developments concerning trade measures on steel imports adopted by third countries. The Commission confirmed that the number of trade defence measures in place at the end of 2024 exceeded those in place the year before.

(27) Beyond trade defence measures, the Commission observed that the tariff measures in place had increased since the previous review investigation. These measures included, amongst others, increased tariffs in Türkiye (27), Colombia (28) and Canada (29). In addition to safeguard measures on certain steel products in South Africa (30), and the initiation of a safeguard investigation on certain flat steel products by India. (31)

(28) Furthermore, on 10 February 2025, the US announced the termination of previous country exclusions, product exemptions as well as of specific TRQ or quota regimes under the Section 232 measure (32). As a result of this change to the measure, all origins would in principle be subject to a 25 % duty. Given the size of the US market and the level of duty, the Commission considers that this development (33), together with the additional tariff measures implemented by other countries, would create further tensions on the steel markets, thus increasing the risks of additional trade diversion into the Union.

(29) 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 certain injury indicators for the product concerned during the period considered. The questionnaires were also made available on the website of the European Commission’s Directorate-General for Trade. (34) All the relevant instructions regarding questionnaires were also included in the Notice of Initiation.

(30) The Commission received questionnaire replies from members of the three known Union industry associations as well as from other Union producers not members of any association.

(31) 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.

(32) The evolution of the injury indicators between years 2021 and 2024 is shown in Tables 1 to 3 below:

(33) Over the period considered, the production volume of Union producers steadily decreased by -11 % in 2022, by -13 % in 2023 and by –18 % in 2024, when compared to 2021. Capacity utilisation followed a declining trend, reaching a very low level of 67 % in 2023 and remained at the same level in 2024, despite a decrease in capacity of 5 % in 2024.

(34) Consumption in the Union market started decreasing in 2022 (-8 %), this trend continued in 2023 (-14 %) and remained at the same level in 2024 (–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, -13 % in 2023 and -14 % in 2024 when compared to 2021). During the period considered, the Union industry’s market share decreased by 0,7 %.

(35) Unit sales prices increased in 2022 by 34 %, increased in 2023 by 12 % and in 2024 by 1 % when compared to 2021.

(36) The increase in prices and post-COVID recovery drive turned the Union industry into profit-making in 2021 (9,1 %) with profits slightly increasing in 2022 (9,9 %). In 2023 profitability sharply declined, reaching only a 0,5 % profit and the trend continued in 2024 turning into loss-making (–0,4 %).

Conclusion

(37) The negative trend observed in 2023 continued into 2024 with injury indicators further deteriorating or remaining at the lower levels of 2023.

Additional analysis per product family

(38) Following the approach of the original investigation, (36) the Commission also assessed the evolution of injury indicators per product family. (37) The product families covered by the steel safeguard are flat products, long products and tubes.

(40) 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 the product family tubes, which showed a better performance as regards profitability and market share developments, nevertheless saw a deterioration of other key indicators such as capacity utilisation, levels of production and domestic sales over the period considered.

Import pressure, evolution of imports and market share

(41) 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.

(44) The Commission received 12 questionnaire replies, 40 submissions and 22 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. This section provides an overview of the comments from interested parties is given, organised in 8 sub-sections. The comments are grouped by nature and content.

(45) The Union industry asserted that the existing TRQs no longer align with the steel demand within the EU. The industry argued that quotas have been liberalised by more than 15 percentage points compared to 2019. This, along with the recent decline in steel demand, has created a widening gap between the current duty-free quota volumes and actual demand. As a result, the Union industry has requested an adjustment of the TRQs to better reflect the present demand, asking the Commission to reduce TRQ levels by 25 % to 50 % on average.

(46) Certain exporting countries and users argued that although overall demand may seem to have decreased, certain sectors exhibit growing demand for specific steel products. According to these parties, tightening the TRQs in these categories would negatively impact the competitiveness of downstream EU industries. By keeping quotas more flexible, these industries can better meet their material needs, which EU producers may not be able to supply in sufficient quantities. These parties argued that a one-size-fits-all approach to TRQs fails to reflect the diverse demand across different sectors within the EU.

(47) Additionally, several exporting producers referenced a recent WorldSteel report that predicts global steel demand will increase in 2025. (39) They argue that this contradicts the industry's forecasts, casting doubt on the reliability of the industry's evidence.

(48) The Union industry asserted that their economic situation has deteriorated significantly, notably in the latest quarters. They argue that this is visible in terms of production, sales, and profitability, while imports retain high or increasing market shares and undercut EU producers’ prices.

(49) Certain exporting countries and users argued that external factors such as high energy costs and geopolitical issues significantly influenced the steel market. These factors, rather than pressure of imports, may account for much of the difficulties experienced by the EU steel industry.

(50) The Union industry requested to eliminate the quarterly carry-over of unused quotas to the next quarter, or alternatively, to cap the carry-over. Several exporting countries and users requested to keep the carry-over mechanism, arguing that this is a core element of the TRQ structure that provides predictability and as such does not fall under the scope of the review.