EU Launches Review of Steel Import Safeguard Tariffs: Changes Expected from April 2025

The European Commission(EC)

The European Commission(EC) has officially launched a review of its steel import safeguard tariff-rate quotas, with proposed changes to take effect from 1 April 2025. This review, which follows a request by 13 EU member states on 29 November 2024, aims to address the evolving dynamics of steel imports into the EU. The focus will be on adjusting quotas, particularly in light of a contraction in EU demand and a rise in Chinese steel exports, which have led to shifts in trade flows.

Key Changes Under Review for Steel Safeguard Tariffs

The EC's review will examine several key aspects of the current steel import safeguard measures. Among the possible changes is the introduction of a new quota volume. EU steel producers have expressed concerns that current duty-free quota volumes no longer align with the demand in the EU, with some regions experiencing gaps due to shrinking consumption. Additionally, an increase in Chinese steel exports has led to an influx of steel from other countries into the EU market, further complicating the allocation of quotas.

The EC will reassess how these quotas are managed and allocated. Producers and users have been invited to provide feedback via a questionnaire, which must be submitted by 10 January 2025. Some of the other factors under evaluation include the exclusion of certain developing countries from the safeguard measures based on their 2024 imports, as well as potential updates to the level of liberalization within the quotas.

The steel safeguard measures, which were first introduced provisionally in 2018, became definitive in 2019. Initially set for a three-year period, they were extended for another year until June 2024 and then further extended until June 2026. Recent updates to these measures have had a noticeable impact on trade, particularly with the cap on hot-rolled coils (HRC) and wire rod quotas from ‘other countries’ being limited to 15% per origin. This has resulted in a significant reduction in import opportunities, especially for smaller markets.

The Impact of the Quota Review on Steel Imports

The current steel import safeguard measures have significantly impacted trade flows within the EU. In previous years, quotas would exhaust quickly after being reset each quarter, but the 15% cap on 'other countries' volumes has left a larger portion of the quotas underused. While there were expectations that some countries, like South Korea, could increase exports to the EU in April 2025 when residual quota volumes become available, the upcoming review could alter this outlook.

With EU imports largely unaffected by these changes so far due to a rush to buy final volumes before the duties apply, the redistribution of quotas will be a key focus of the review. The EC aims to ensure that the safeguard measures strike a balance between protecting EU producers and allowing for sufficient import access to meet demand. These changes, when finalized, could have significant implications for steel producers and importers alike, influencing trade relationships and steel prices in the EU market.

EU-India Strengthen Collaboration on CBAM

The European Union has commenced fresh negotiations with India following its decision to implement the Carbon Border Adjustment Mechanism (CBAM) on imported steel and aluminum, aiming to resolve ongoing trade tensions.

European Commission Secretary-General Gerassimos Thomas led a delegation to New Delhi in early July to discuss a range of taxation and customs issues, including CBAM. The visit sought to harmonize decarbonization efforts between Indian and European industries and address the challenges Indian companies face under CBAM.

Thomas engaged with Indian government officials and steel industry stakeholders, emphasizing Europe’s commitment to importing low-carbon products to support global decarbonization and ensure equitable treatment of imported goods. This mechanism is set for gradual introduction, providing maximum predictability for investors and businesses.

Thomas lauded India's economic decarbonization plans, highlighting the shared commitment of the EU and India to tackle environmental issues collaboratively. The EC delegation's visit provided a platform to discuss the implementation challenges of CBAM for Indian companies, particularly focusing on the potential impact on SMEs.

Technical meetings with India's Ministry of Energy will continue, with a CBAM transition assessment report due to be submitted to the European Council and Parliament by the end of next year. This report will be publicly available for Indian industries and authorities to comment on and engage in further discussions.

Both parties also expressed mutual interest in cooperating on carbon trading markets, pricing mechanisms, energy efficiency, renewable energy, and clean technology. The EU plans to consult with major Asian trading partners, including South Korea and Japan, on CBAM, with both countries committed to addressing related uncertainties.

Last month, trade negotiations in New Delhi aimed at mitigating the impact of expanded safeguards and tariffs on certain steel imports failed to reach an agreement. India had sought equivalent concessions and trade compensation from the EU but to no avail.

With impending EU import restrictions on Indian steel products, speculation arose that India might retaliate through WTO litigation and trade reprisals. However, the recent EC delegation visit, which initiated discussions on various steel-related trade issues, suggests a potential easing of trade conflicts and the start of new negotiations.

China's TiO2 Output Faces Decline Amid Weak Demand, Profit Pressures

TiO2

China's titanium dioxide (TiO2) production is set to decrease during the January-February off-season. This decline stems from reduced demand and shrinking profit margins. Producers are adjusting by cutting or halting output.

Market Pressures and Production Adjustments

TiO2 prices have hit a four-year low, with 93pc rutile grade assessed at Yn13,400-14,700/t ex-works on January 14. This marks a 14pc drop since May 2024. The price decline is attributed to lower downstream demand and increased production following capacity expansions. China's TiO2 capacity reached 6.35mn t/yr in 2024. Producers are now planning maintenance shutdowns ahead of the Lunar New Year holiday. This is in response to weak demand from painting, plastics, paper, and printing ink sectors. Rising concentrate feedstock costs further squeeze profit margins. For example, a Guangxi-based producer will suspend production from January 22 to February 6 for equipment maintenance. This will result in an estimated output loss of 6,000t.

Concentrate Prices and Geopolitical Factors

46pc grade concentrate prices ended a downtrend in early September, rising to Yn1,980-2,000/t ex-works on January 14. This rise is due to reduced medium-grade ore supplies from state-controlled producer Pangang. Small and medium-sized producers face increased losses due to higher concentrate and sulfuric acid costs. Additionally, geopolitical pressures are impacting the market. The European Commission (EC) imposed definitive anti-dumping duties on TiO2 imports from China. These duties range from €0.25/kg to €0.74/kg and will be valid for five years. This has led to a reduction in exports to Europe. A Shandong-based producer has stopped exports to European buyers since July 2024. A Nanjing producer has been operating at a loss since October 2024 due to weak domestic and overseas demand.

India Aluminium Quality Control Rules Tighten for 2025 Rollout

India aluminium

Government Targets Low-Quality Imports with Stricter Compliance Measures

India aluminium quality control measures will become stricter from October 2025, as the government enforces a new Quality Control Order (QCO). The regulation targets several aluminium and alloy products, including welded irrigation tubes, EC-grade rods, and wrought bars under specific Indian Standards (IS 733:1983, IS 5484:1997, IS 16011:2012). This initiative seeks to prevent substandard imports from neighboring countries.

Phased Implementation and Enterprise Exemptions

The India aluminium quality control regulation includes exemptions for small and micro enterprises. Small businesses can continue importing non-compliant aluminium products until January 2026, while micro enterprises have until April 2026. Research and development imports of up to 200kg also remain exempt if not commercially sold. This phased implementation ensures a smoother industry transition without major supply disruptions.

Export-Focused Adjustments and Domestic Safeguards

The latest amendment allows exemptions for select imported aluminium products, while the 2024 amendment previously exempted domestically manufactured aluminium destined for export. Therefore, the policy balances trade facilitation with domestic industry protection. India aluminium quality control frameworks now aim to raise product standards, reduce unfair competition, and align with broader industrial policy goals.

The Metalnomist Commentary

India’s aluminium QCO signals a broader industrial strategy that protects domestic producers while encouraging higher-grade imports. The transition period for SMEs reflects pragmatic governance, though it will require vigilance to prevent circumvention via R&D or micro-business loopholes.