From July 2026, the EU will implement new safeguard measures, reducing import quotas and tightening import regulations. Key Asian exporters, including South Korea and Taiwan, China, are set to be affected the most.
The European Union's stainless steel safeguard framework is entering a more restrictive phase as quota allocations tighten from 1 July 2026. Under the new regulations, tariff-free import volumes will be reduced by 53–65%, significantly tightening access to CRC and HRC imports, while imports of stainless steel plates are not expected to be affected due to low volumes. Exports from South Korea and Taiwan, China are set to be affected the most, with out-of-quota CRC volumes representing 7% and 10% of their respective 2026 CRC production.
The introduction of the "melt and pour" rule may reduce quotas for countries with no crude stainless steel production, such as Turkey, Vietnam, Thailand and Malaysia. The initial effect of the new EU quotas will be less pronounced due to a significant reduction in stainless steel imports driven by CBAM regulations, but the new measures will have a more visible impact on the structure of European stainless steel supply in the medium term.
The overview of the new EU import quota system
In April 2026, the European Commission adopted its Steel and Metals Action Plan, highlighting the strategic role of the steel sector in the EU's economic security and introducing several measures to protect the stability of the EU steel industry. These measures include the following:
- The European Commission will introduce a revised tariff-rate quota (TRQ) system for steel imports into the EU. The new system reduces overall EU import quotas by approximately 47% compared with the 2024 safeguard quotas and raises the out-of-quota penalty to 50% from 25% previously. The new TRQ system will commence on 1 July 2026, with the ability to carry over unused import quota into the next period during the first year of application (1 July 2026 to 30 June 2027). The European Commission will revise the quarterly carry-over for specific products during the second year of application (1 July 2027 to 30 June 2028), considering import pressure, quota utilisation and product availability on the domestic market.
- The European Commission will introduce the "melt and pour" principle for steel imports, identifying the country where the steel was produced from liquid form into its first solid shape as the country of origin. This new rule will be taken into consideration for import quota allocation. During the first two years (1 July 2026 to 30 June 2028), the European Commission will determine whether the "melt and pour" rule will be used as the basis for country-specific tariff quota allocations.
- The new regulation will be revised on a regular basis. Within the first six months (1 July to 31 December 2026), the European Commission will review the scope of the current legislation, considering expanding the regulation to additional steel products, including tubes and pipes, certain types of wire and forged bars. Within the first 12 months (1 July 2026 to 30 June 2027), the European Commission will review the need to expand the regulations to products made from or containing a significant amount of steel. Subsequent revisions will take place every two years.
The structure and dynamics of EU stainless imports
Cold-rolled coils (CRC) dominate import volumes, constituting 65% of EU flat stainless steel imports (2023–2025), driven by demand from the automotive and consumer durables sectors where consistent surface finish and tight tolerances are critical. Hot-rolled coils (HRC) form the next key segment, serving as both a feedstock for downstream processing and a cost-effective solution for less surface-critical applications.
Cold-rolled plates (CMP) address intermediate industrial uses, while plate mill plate (PMP) caters to heavy engineering and energy sectors where import reliance is comparatively lower due to stronger domestic capabilities. Overall, the import mix is skewed towards higher-value flat products, underscoring the EU's structural dependence on external suppliers for advanced finishing segments.
CRC imports into the EU are structurally concentrated among Asian suppliers, reflecting both cost competitiveness and vertically integrated production ecosystems. Asia accounts for over 70% of stainless steel imports into the EU, led by South Korea and Taiwan, alongside China, Vietnam and India as key suppliers. From the start of 2026, stainless steel imports into the EU declined significantly, driven by the introduction of the Carbon Border Adjustment Mechanism (CBAM) from 1 January 2026.
Imports of CRC and HRC to be most affected, with a marginal impact on imported plates
Our analysis indicates that the new regulations will significantly reduce EU import quotas for stainless steel. The reduction for CRC will be 53%, while for HRC and PMP the reductions will be 65% and 62%, respectively. Based on the most recent EU stainless steel import data (12 months ending February 2026), CRC and HRC stainless steel imports will exceed the new import quotas, while the new quota for stainless steel plate imports will remain above current levels of plate imports into the EU.
New EU quotas to create winners and losers among stainless steel exporters
Reduced EU import quotas will ultimately benefit EU domestic producers. The analysis of existing CRC imports over the 12 months ending February 2026 and the new EU CRC quotas indicates that up to 374 kt of CRC imports could fall outside quota limits. Assuming the new reduced quotas are applied proportionally to all importing countries, the largest CRC exporters to the EU – namely South Korea, Turkey and Taiwan, China – will sustain the largest tonnage cuts.
Some CRC-exporting countries – particularly India, South Africa and the USA – will emerge as relative winners, with new quotas exceeding their recent import volumes. In reality, the effect of the new reduced quotas is likely to be less pronounced, as imports into the EU are already down significantly due to the introduction of CBAM at the start of 2026 (CBAM stainless steel impact: Short term gains, long term risks).
The impact of the new quotas and changes to CRC imports will vary across key exporting countries. Taiwan, China is set to be affected the most in absolute terms, with out-of-quota CRC exports estimated at 106 kt, representing 10% of 2026 CRC production. South Korea is another Asian exporter likely to be affected by the new EU quotas, with an estimated 57 kt of out-of-quota CRC exports, accounting for 7% of South Korean 2026 CRC production.
The effect on exports from Turkey and Malaysia will be less pronounced in absolute terms but could represent 21–23% of 2026 CRC production in these countries. Among the potential winners, India and South Africa have the capacity to benefit from the new quota regulations, though the overall effect of potentially higher exports on their 2026 CRC production is likely to be minimal, confined to 3–6%. Although the USA has the highest absolute level of potential upside in CRC exports to the EU at 37 kt, we remain sceptical about the export economics of US-produced CRC to the European market.
“Melt and pour” rule may endanger imports from Turkey, Vietnam, Thailand and Malaysia
Under the new safeguard framework, the EU also plans to introduce the ‘melt and pour’ principle, which identifies the country where the steel was originally melted and poured, rather than where downstream processing occurs. This rule may impact exporting countries such as Turkey, Vietnam, Thailand and Malaysia, which rely on imported slabs or HRC (mostly from Asia) for re-rolling and finishing.
Under the new regime, such material will be counted against the originating country’s quota, effectively removing the ability to channel exports through secondary processing hubs to access EU quotas. As a result, these countries face reduced quota availability, higher risk of out-of-quota duties, and loss of routing flexibility, leading to declining export competitiveness. Trade flows are expected to reconsolidate towards primary producers with EU quota access, while processing hubs may increasingly redirect volumes to alternative markets, intensifying competition there.
