EU to Implement ‘Melt and Pour’ Rule in Steel Trade Defense

EU Steel

New origin rule targets duty evasion and strengthens trade protections

The European Commission will introduce a “melted and poured” clause as part of its steel and metals action plan, aimed at tightening trade defense measures across the EU steel sector. This clause will assign origin based on where steel was originally melted, regardless of later processing locations.

Steel Origin Rules Target Evasion via Minimal Processing

The move addresses growing concerns that foreign producers—especially in countries like China—circumvent EU tariffs through minimal downstream processing. For example, converting hot-rolled steel into hot-dip galvanised outside the EU currently allows for reclassification, bypassing existing anti-dumping duties.

With the new rule, such transformations will no longer alter origin, preventing manipulation and reinforcing fair-trade enforcement. According to a draft of the plan, this rule will clarify product origin and prevent exploitation of loopholes in trade regulations.

Broader Measures Target Steel Overcapacity and Carbon Leakage

In addition to the melt and pour clause, the European Commission plans to proactively launch investigations based on “threat of injury” instead of waiting for economic harm. The action plan also extends the Carbon Border Adjustment Mechanism (CBAM) to include downstream steel products, such as finished or semi-finished components.

This change addresses the risk that producers may shift exports to downstream goods to avoid carbon taxes on raw materials. European steel service centers and distributors have demanded such protections to prevent unfair import competition and carbon leakage.

Trade groups like Eurofer have long requested these rules, especially as Chinese-origin steel continues entering the EU via indirect supply chains. A representative from a major steel trading firm called the new clause a "game changer" for the European market.