EU Drastically Slashes Steel Import Quotas, Impacting Domestic Industry

The European Union (EU) has finalized new trade measures that drastically cut the volume of steel eligible for duty-free import from countries including South Korea, and will impose high tariffs on shipments exceeding these limits. Last year, annual steel exports to the EU reached 3.88 million tons, representing 13.8% of the total, with 1.06 million tons exported in the first quarter of 2024 alone (approximately 15%). The new measures, agreed upon politically by the European Commission, are set to take effect on July 1, coinciding with the expiration of current EU steel safeguard measures.

In addition to slashing duty-free quotas, the EU is introducing a new 'melt & pour' requirement to verify the country where steel was actually melted and cast. This move aims to boost supply chain traceability and transparency, further tightening entry conditions for Korean steel into the EU market.

The EU's intensified protectionist measures are making the export environment increasingly stringent for domestic steelmakers targeting the EU, a key market for South Korean steel exports. In particular, strengthened regulations across major flat steel products such as hot-rolled, cold-rolled, and plated steel are expected to impact sales of automotive steel sheets and high-value-added plates. Given that many of these products are integrated into the supply chains of finished vehicles, home appliances, and industrial goods, the impact could extend beyond mere volume reduction to pressure profitability.

An industry official stated that the reduction in EU duty-free quotas, coupled with the need to address the Carbon Border Adjustment Mechanism (CBAM), makes the impact unavoidable. Concerns were also raised about rising costs due to the global trend of increased tariffs.