The European Commission is set to implement a "melted and poured" rule as part of its Steel and Metals Action Plan to address growing concerns over trade circumvention. The draft of this plan, due for release this week, aims to strengthen the EU's trade defense measures against non-EU exporters who attempt to bypass tariffs through minimal transformations.
Under the new rule, the origin of steel products will no longer be determined by traditional non-preferential rules of origin but by the location where the metal is originally melted, regardless of where it is further processed. This change aims to eliminate the possibility of changing the product's origin through minimal transformation, providing greater clarity in tracing the origin of steel products.
The new measure has raised concerns among steel suppliers to the EU, particularly coated and cold-rolled (CR) steel producers from countries like Turkey and Vietnam. These countries have historically imported Chinese hot-rolled coil (HRC), which they use as feedstock for re-rolling. The new rule could affect their ability to use cheaper Chinese HRC, especially in Turkey, where producers are particularly worried about the impact on their profitability.
A Turkish source told SteelOrbis, "In the EU, we had the duty, then the quota, then a cap for the 'others' quota, and now the threat of being unable to use Chinese import feedstock is quite vivid." This shift could lead to a significant decline in HRC imports from China, which in 2024 totaled around 1.7 million metric tons, a 9% year-on-year increase. Turkey's anti-dumping (AD) measures against Chinese HRC have already imposed AD rates ranging from 17% to 43.31%.
Vietnam may also face similar challenges, as it is a significant supplier of flat steel to the EU and imports large quantities of Chinese HRC. However, sources suggest that the impact on Vietnam may be milder compared to Turkey, as Vietnam has already imposed AD measures on Chinese HRC and has been avoiding Chinese feedstock in favor of local or Japanese materials for some time.
In 2024, Vietnam imported about 9.03 million metric tons of HRC from China, a 37.2% year-on-year increase. This surge in imports led to a trade case, resulting in AD rates ranging from 19.38% to 27.83% on Chinese HRC, effective from March 7, 2025.
The European Commission is committed to monitoring trade flows and will actively investigate any "threat of injury" to protect the EU steel industry from the effects of global overcapacities created under non-market conditions. As part of its long-term strategy, the Commission plans to propose new measures by the third quarter of 2025 to continue safeguarding the EU's steel industry beyond the expiration of current measures in June 2026.
VietnamSteel by Hoa Sen Group
