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According to Bloomberg, the European SA533 Type A steel Commission has recently decided to adjust the steel import quota system for multiple countries, including South Korea, starting from April 1, 2025. South Korea's steel export quota will face significant compression. Among them, the duty-free quota for hot-rolled products exported by South Korea to the European Union, which accounts for the largest proportion of its exports to Europe, will be reduced by about 14%, from the original 186358 tons to 161144 tons, a decrease of 25194 tons.
Except for hot-rolled steel, the export quotas for other categories of Korean steel will also be slightly reduced. This round of adjustment is due to the EU's decision to significantly reduce the tax-free import ratio applicable to steel products from 1% of the total import volume to 0.1%, with the aim of further tightening safeguard measures and strengthening protection for the local steel industry.
According to the new regulations, the EU SA533 Type A steel will also cancel the "deferral mechanism" of quarterly quotas from July 2025, meaning that unused quotas from the current quarter will no longer be carried over to the next quarter. There is widespread concern within the industry that this policy may result in exporting countries being unable to fully utilize their quotas, thereby weakening their competitiveness and supply pace in the EU market.
At the same time, the EU will also set export quotas for certain steel varieties under the "global quota" system, with restrictions ranging from 13% to 30%. The system originally allowed any country to continue exporting related products until the global quota was exhausted, but after adjustment, it will impose restrictions on duty-free exports of specific categories by a single country to prevent export concentration.
This round of quota adjustment is the result of long-term calls from EU member states to strengthen steel security mechanisms, aimed at alleviating the import impact faced by local enterprises. This policy adjustment is also seen as a quick response from the European side to the implementation of a new round of steel tariffs by the United States on March 12, 2025.
This measure is also a follow-up implementation of the European SA533 Type A steel Commission's "Action Plan for the Steel and Metals Industry" released on March 19, 2025. According to the plan, starting from the second quarter of 2025, the EU will reduce quota allocation within the framework of existing steel safeguard measures to further compress import volume. Since 2018, the EU has implemented low or zero tariffs on steel within quotas, while imposing a 25% tariff on steel outside of quotas. Reuters predicts that this new regulation may reduce the scale of steel imports in the European Union by up to 15%.
Industry insiders pointed out that this round of policy adjustments will put substantial pressure on South Korea's steel exports to Europe, which are mainly hot-rolled, cold-rolled, and galvanized. Subsequently, South Korean steel mills may need to reassess their export market structure and quota management strategies.
