Outokumpu calls for efficient safeguard measures to protect European steel industry

Outokumpu calls for efficient safeguard measures to protect European steel industry

The European Commission is currently preparing a new more efficient trade measure replacing the current steel trade safeguards in place until July 2026. The proposal is expected in the near future. The aim is to provide a highly effective level of protection against negative trade-related effects caused by global overcapacities, especially in Asia.

The European steel industry remains threatened by global excess capacities and by global distortions from China and other countries that artificially support their domestic industries or circumvent the current measures. This threat is further exacerbated by 50% tariffs imposed by the US on steel. It causes diversion of trade flows from the countries with excess capacities to the EU instead of the US.  A more efficient mechanism should replace the current steel safeguard as soon as possible, ideally before it expires

“Currently, European producers are struggling with low-capacity utilization levels due to low demand, high share of low-priced Asian imports and 50% export tariffs to the US. Efficient safeguards to create a level playing field for the European steel industry are essential for Europe’s independency in mobility, infrastructure, defense and clean tech - and for ensuring a business case for EU steel decarbonization,” highlights Outokumpu’s President and CEO Kati ter Horst.

Strict tariff rate quotas by true country of origin, review mechanism for changing situations

The EU needs to respond with more assertive solutions and replace current trade safeguards as soon as possible with more effective measures. Outokumpu believes that the most effective form of trade measure to protect the European steel sector against unfair trade and global excess capacities would be global tariff rate quotas with a maximum cap per country of origin. Quotas would be efficient if tariffs would rise to 50% on each tonne above quota, and the country of origin would be defined by where the steel is melted and poured. In this way, producers could not circumvent the quotas by further processing steel in another country. There must be strict per-country limits for steel imports. No carry-over mechanism, which has allowed countries to roll over unused quotas to the next quarter, should be allowed under a new measure, to prevent short-term import surges that distort the EU market.

These new quotas need to be linked to import market shares of a period when demand was equally weak like today, such as 2012–2013. Moreover, the EU demand will need to be reviewed on a periodic basis to ensure the measure remains relevant. In addition, the above-quota tariff level would need to be checked on its effectiveness in keeping target import market share. In this way, the tariffs can bring imports back to levels that support healthy EU steel capacity utilization and profitability.

The measures need to have a review mechanism to evaluate the effectiveness of the measure including swift corrective actions where needed. Such a review should be based on solid market and industry data, focusing on the quota and tariff levels. Also, an emergency review should be activated in case of sudden, extraordinary demand shocks.

European sustainable steel strengthens Europe and makes it more self-sufficient

The Asian steel has a significantly higher carbon footprint than European steel.  Outokumpu’s stainless steel has up to 75% lower carbon footprint than the global industry average. One of the key reasons for our low carbon footprint is high recycled material content rate.*

“In general, stainless-steel production in Europe uses mainly scrap as a raw material, which significantly reduces the carbon footprint of European production compared to Asian producers. If this steel is allowed to take over the European market, Europe’s carbon footprint will increase, scrap will not be used enough, European melting capacity will decrease, and Europe will become dependent on Asian countries like Indonesia and China. We need trade defense measures to guarantee economic stability, innovation, and sustainability development in the EU,” says Kati ter Horst. 

*) Outokumpu’s average product carbon footprint (2024): 1.6 kg CO₂e per kg of stainless steel based on lifecycle assessment. Global average carbon footprint of stainless steel (2024): 7 kg CO₂e per kg of stainless steel. (Outokumpu’s calculation based on data provided by CRU, worldstainless, and Kobolde & Partners AB) Besides the use of recycled steel, other key factors for low carbon footprint are Outokumpu’s own chrome mine and the use of low-carbon electricity.

For more information:

Outokumpu’s position paper on steel trade post safeguard measure is available at www.outokumpu.com/en/news/position-papers. 

Karoliina Rasi, Head of Public Affairs, Europe, tel. +32 476 349 263 or Outokumpu media desk, tel. +358 40 351 9840, e-mail media(at)outokumpu.com

Outokumpu Corporation