Half of the import quotas have been allocated exclusively to free trade agreement (FTA) partners, while the remaining half will be available to all exporting countries, including FTA partners.

The regulation establishes three different quota access mechanisms depending on the exporting country’s status.

Countries receiving a country-specific quota (CSQ) may use their allocated quota immediately. Once exhausted, eligible FTA partners may continue exporting under an additional FTA Quota – CSQ, which is administered on a first-come, first-served basis.

Countries without country-specific quotas may instead access:
- “Other countries” quota: accessible for the exporting countries which are not FTA partners.
- FTA Quota – Other countries quota: accessible for the exporting countries which are FTA partners.

The countries that are able to access these three type of quotas may vary depending on the products.

The CSQ allocations for reinforcing bars are as follows:

• Türkiye : 239,66.09 mtons (59,919.02 mtons per quarter)
• Egypt : 144,367.80 mtons (36,091.95 mtons per quarter)
• Algeria : 63,761.42 mtons (15,940.36 mtons per quarter)
• Moldova : 39,719.11 mtons (9,929.78 mtons per quarter)
• China : 20,216.13 mtons (5,054.03 mtons per quarter)
• Ukraine : 67,710.16 mtons (16,927.54 mtons per quarter)
• FTA Quota – CSQ : 158,803.37 mtons (39,700.84 mtons per quarter)
• Other Countries : 63,322.34 mtons (15,830.59 mtons per quarter)
• FTA Quota – Other Countries : 38,299.23 mtons (9,574.81 mtons per quarter)
• UK (to Northern Ireland from other parts of the UK) : 8,649.90 mtons (2,162.48 mtons per quarter)

The CSQ allocations for wire rods are as follows:

• Türkiye : 244,589.00 mtons (61,147.25 mtons per quarter)
• Malaysia : 86,683.40 mtons (21,670.85 mtons per quarter)
• UK : 175,399.53 mtons (43,849.88 mtons per quarter)
• Ukraine : 189,145.02 mtons (47,286.26 mtons per quarter)
• Switzerland : 162,195.34 mtons (40,548.83 mtons per quarter)
• Viet Nam : 97,086.65 mtons (24,271.66 mtons per quarter)
• Moldova : 95,839.25 mtons (23,959.81 mtons per quarter)
• Egypt : 86,714.89 mtons (21,678.72 mtons per quarter)
• FTA Quota – CSQ : 122,881.38 mtons (30,720.34 mtons per quarter)
• Other Countries : 153,927.34 mtons (38,481.84 mtons per quarter)
• FTA Quota – Other Countries : 138,440.96 mtons (34,610.24 mtons per quarter)
• Korea : 11,334.76 mtons (2,833.69 mtons per quarter)
• Japan : 5,293.99 mtons (1,323.50 mtons per quarter)

The “melt and pour” requirement the regulation introduces will apply from October 1, 2026. The European Commission is required to adopt detailed implementing rules specifying the evidence required by August 31, 2026. By June 30, 2028, the Commission shall, based on the information collected pursuant to “melt and pour” requirement, assess whether it is necessary to designate the country of “melt and pour” as the basis for benefiting from the tariff quotas provided for in this regulation. Based on that assessment, the Commission may submit a legislative proposal to the European Parliament and to the Council.

By 30 June 2027, the Commission shall assess the necessity of amending the product scope, taking into account in particular whether it should cover additional products that are made of, or contain, a significant amount of steel, including as a matter of priority downstream iron and steel products not covered by the regulation. Where sufficient evidence is gathered in its assessment demonstrating that necessity, the Commission may without undue delay submit a legislative proposal to the European Parliament and to the Council.

By June 30, 2029 and every three years thereafter the implementation of the regulation, the Commission shall evaluate the effectiveness of this regulation, after having carried out broad consultations with stakeholders throughout the steel value chain.

The regulation sets the total annual tariff-rate quota at 18,345,922 mt, while imports within the quota will remain duty-free, while volumes exceeding the quota will be subject to a 50 percent tariff, a sharp increase compared to the previous 25 percent safeguard duty. Depending on the product category, quota volume reductions of up to 90 percent will be implemented. However, details regarding the country-specific quota allocations have not yet been announced.

According to a statement released by the Department of Finance, Canada will extend its steel tariff-rate quota regime for imports from non-CUSMA partners until June 27, 2027, while the existing horizontal tariff relief for eligible steel and aluminum products from the US, as well as for eligible steel products subject to derivative tariffs, will be extended until June 30, 2027. The Department of Finance Canada stated that the extension will provide producers and importers with greater business predictability and longer-term certainty, while helping the government defend the Canadian steel industry and its workers against the impact of trade flows driven by excess capacity and unfair market conditions.

Under the current framework, quota levels will remain based on 20 percent of 2024 import volumes for partners without a free trade agreement with Canada and 75 percent of 2024 import volumes for partners that have a free trade agreement in force with Canada, while imports exceeding the quota limits will continue to be subject to a 50 percent tariff. Canada will also continue to exempt the US and Mexico from the steel tariff-rate quotas.

Following the planned extension, the government intends to consider an allocations-based approach for the administration of quotas for certain product classes, with producers and importers expected to be invited to share their views as part of the ongoing review of the tariff-rate quota framework.

The regulation sets the total annual tariff-rate quota at 18,345,922 mt, while imports within the quota will remain duty-free, while volumes exceeding the quota will be subject to a 50 percent tariff, a sharp increase compared to the previous 25 percent safeguard duty.

This measure applies broadly to all third countries, including those with free trade agreements or preferential access, reinforcing the EU’s efforts to prevent trade diversion and protect domestic producers. However, imports originating from Norway, Iceland and Liechtenstein are excluded from the scope of the measure. The European Commission also retains the authority to expand the scope to include downstream steel products in future reviews.

The tariff-rate quotas will be administered on a quarterly basis, aiming to prevent import surges within short periods. During the first year of implementation, unused quotas will be carried over to subsequent quarters. However, the commission may later adjust this rule depending on market conditions, including import pressure and supply shortages.

The European Commission will:

• review the product scope regularly,
• assess the effectiveness of the measure every three years,
• potentially adjust quota volumes within a range of 14.4-22.2 million mt depending on market developments.

Annual volumes of tariff rate quotas for some steel products are listed below.

• Merchant Bars and Light Sections  :  881,735 mtons
• Rebars    : 844,526 mtons
• Wire Rods   : 1,569,532 mtons

In a joint statement, the European Parliament, the Council and the European Commission underlined that the EU has taken unprecedented steps since the start of the war to reduce its economic dependence on Russia and prevent its economic activity from supporting Russia’s war efforts.

However, the institutions acknowledged that some dependencies still remain, particularly for certain steel products that are not yet fully restricted. Limited volumes of Russian steel imports are therefore still permitted under transitional arrangements until September 30, 2028, with quotas that decrease annually. The EU confirmed that these measures are designed to ensure a complete phase-out of remaining Russian steel imports by the 2028 deadline.

Due the war in the Middle East, levels of uncertainty have surged in the global long steel products market. Energy prices are flying high, supply chains have been disrupted, bunker oil and freight rates are up and stocks are down. It is too early to predict the overall impact of the war. While concerns regarding deliveries of cargoes originating from regions in the East have helped push prices up in the Western markets, demand is not improving, which comes as no surprise especially when we have no clue about how long this war will continue or to what extent it might spread. Another major question is what will happen to scrap prices.

Investments to be put on hold, no panic purchases despite EU mills’ price hikes

Investments will be put on hold given the high levels of uncertainty all around. EU mills have reacted with price increases but, as the market is still waking up after the winter season, this has not resulted in panic purchases.

Imports into EU risky amid lack of regulatory clarity

Brussels’ incompetence or unwillingness to announce final CBAM regulations and how safeguard measures will be continued after June 2026 makes imports into the EU extremely risky.

Turkish mills face slow local and export demand, adjust capacity usage accordingly

In Turkey, construction activity is slow and exports are down by 20 percent compared to the same period last year. Mills are adjusting their production based on the demand they receive.

US Supreme Court gives some breathing space to importers, but new tariffs likely

The Supreme Court decision in the US against Trump’s tariffs gives a partial breather to importers. However, it will probably not be long before new tariffs will be implemented under different names.

Current market status unstable, outlook unpredictable

It is very difficult to talk about competition under the current levels of protectionism, geopolitical issues and uncertainty in the market. Under the current overall market circumstances, the current status of the market can be described as unstable with an unpredictable and unstable outlook.

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Demand remains weak in the global long steel products market, both structurally and seasonally. Buyers are cautious, operating on a hand-to-mouth basis and are still delaying medium- or long-term commitments. At the same time, supply pressure remains high. China has finally shown a significant production decline (with 2025 output down to 960 million mt, below one billion mt for the first time since 2019), but its exports surged to a record 119 million mt.

Geopolitics pull FX and commodity markets in different directions, causing uncertainty

Geopolitical tensions are clearly growing and are tearing the foreign exchange (FX) and commodity markets in different directions, increasing uncertainty for both mills and traders. This is feeding buyers’ wait-and-see stance on the demand side, while keeping input costs – especially scrap – more supported than finished steel products.

Demand still weak in EU, imports slowed down a lot by CBAM uncertainties

Demand in the EU market is still weak. Not only seasonal conditions but also uncertainties regarding political decisions are holding buyers back from making bigger commitments. Despite solid order books, construction companies are not flooding the market to avoid increases. The absolute uncertainty about quotas, CBAM, etc., has slowed down import volumes a lot. Only a few quotas were used up completely on January 1, which is proof of the fears of importers and traders.

US commercial construction expectations weaken for 2026

In the US, commercial construction expectations are down this year, with five of 17 market segments showing negative outlooks. Data centers (57 percent net positive) and power projects (34 percent net positive) remain strong. Although 63 percent of firms are planning new hires in 2026, over 80 percent are struggling to find qualified workers. Tariffs have affected 70 percent of contractors, and 63 percent report project delays or cancellations due to funding issues and rising costs. Top concerns for 2026 include the economic slowdown, workforce shortages, rising labor costs and material price volatility due to imports.

US residential construction segment also shows weakening, US mills in strong position

Residential construction in the US is not any better. Multi-family housing starts dropped 25.9 percent in October last year compared to September and were down 10.8 percent year on year, falling to their lowest level since 2020, according to the US Census Bureau and the Department of Housing and Urban Development. Overall, housing starts in the US in October fell 4.6 percent from September and 7.8 percent from October 2024. Developers face challenges ranging from high inventory to high interest rates. Imports face tough competition with domestic products having a 50 percent duty advantage and with antidumping and countervailing duties on most commodities. Domestic mills are in the best position with high prices and practically no competition.

Seasonal supply tightness boosts scrap market, thereby providing support for longs market

The ferrous scrap market is strong mainly due to the seasonal supply tightness and provides some support for the long steel products market.

Competition at high levels but is not on a level playing field due to trade protectionism

There is high competition in the market. That said, with all the trade measures and tariffs, there is no fair competition anymore. It is just about searching for opportunities.

Market outlook slightly better but remains tough, some cautious optimism for 2026

Under these circumstances, the current status of the market can be described as unstable. The outlook is slightly better due to seasonal reasons but remains tough. Despite all this and everchanging trade restrictions, we are still cautiously optimistic for 2026.

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The same pattern continues to prevail in the global long steel products market – weak demand, new capacities and mills running below where they should be. The global picture has narrowed: demand is flat and partly seasonal, supply keeps increasing and the supply-demand balance looks worse every week. The main issue is not really demand or supply, it is about who can still move material. The tonnages are there but trading opportunities have shrunk and competition is relentless. China keeps exporting because it must and, with most traditional markets closing behind protective barriers, exporters are fighting over the same limited opportunities for open trade.

Mills lack profitability, buyers lack interest, system lacks oxygen

Prices appear stable, but confidence seems to be absent. Mills remain busy, but lack profitability, while buyers hold stocks, but have no appetite to buy more. The system still functions, but with less and less oxygen.

Uncertainty still predominates, 2026 foreseen to be difficult for exporters

Uncertainty is still the prevailing tone in the market. The recent China-US talks were not as positive as the leaders described, similar to the situation regarding China’s five-year plan. It seems that China will continue to flood the market with 10 million tonnes every month. On the other hand, due to the 50 percent Section 232 tariffs, US imports will be reduced by 10 million tonnes annually and the new safeguard system in the EU will take approximately another 20 million tonnes of demand from the import market. This means import demand will be down approximately 30 million tonnes annually. With total Chinese exports increasing by around 60 million tonnes, next year will be very difficult for exporting countries.

Longs imports into EU almost at standstill, regional prices foreseen to increase by Q1

In the EU, the uncertainties about CBAM, reduced quotas and higher duties have led to an almost 100 percent standstill in imports of long steel products into the EU market.  As the shipments ordered a month ago are now entering the market, the impact on domestic mills’ price increases is still not visible. The seasonal demand trend will not provide any help either to bring prices up. However, it is expected that the prices of EU domestic producers will increase significantly in the first quarter of 2026 at the latest due to the absence of import alternatives.

New capacities in US increase pressure on prices

US long product demand remains flat and below 2024 levels, while domestic supply has expanded with new mill capacities, adding pressure on prices. Imports are minimal due to the 50 percent Section 232 duty, compounded by the AD/CVD tariffs on traditional suppliers.

Extended US government shutdown hits confidence levels in domestic market

The 0.25 percent interest rate cut in the US has done little to revive construction activity, and even a further reduction of a similar scale expected in December would not significantly shift market sentiment. The ongoing US government shutdown – now exceeding 30 days – has further weakened confidence, delaying infrastructure spending and procurement. Overall, the US market remains oversupplied and cautious, with limited visibility for an improvement into early 2026.

Few positives entering the holiday season, protectionism here to stay for now

We are entering the holiday season up to mid-February and so market activity will be slower than usual in the northern hemisphere. It is very tough to point to real positives in the market, but at least we know where we stand now. Protectionism is not just a temporary phase, it is the current framework market players have to operate in. This at least brings a certain level of stability: there are fewer unexpected twists and there is somewhat greater predictability in the market.

At least no escalation in US-China trade tensions, future interest rate cuts may help

Another positive development is that the trade war between the US and China has not escalated. Further interest cuts in 2026 will certainly help, if they happen.

Current market status unstable, with unsatisfactory outlook

Under these circumstances, the current status of the market can be described as unstable with a tough, slow and unsatisfactory outlook.

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Accordingly, the new system maintains the principle of open trade and strengthens engagement with global partners to tackle overcapacity, by

1. limiting tariff-free import volumes to 18.3 million mt a year (a reduction of 47 percent compared to the 2024 steel quotas),
2. doubling the level of out-of-quota duty to 50 percent, compared to the 25 percent under the safeguard, and
3. strengthening the traceability of steel markets by introducing a “Melt and Pour” requirement to prevent circumvention.

The quota volumes of various long steel products can be seen in the table below.

• Merchant Bars and Light Sections    881,735 metric tons
• Reinforcing bars    844,526 metric tons
• Wire Rods    1,569,532 metric tons

Under the new regulation, the EU will maintain free-of-duty tariff quotas equivalent to pre-overcapacity market conditions – calculated based on the 2013 import share of around 13 percent of EU consumption, resulting in an annual total quota volume of 18.3 million mt. The EU’s import volume will decrease as a result of the decline in the quota volume. The quotas will be administered on a quarterly basis, without carry-over between quarters, to avoid market flooding. The quotas will also be allocated per product category based on the share of imports that each product category held over the 2022-24 period. If deemed necessary, the European Commission may implement country-specific quotas or restrictions. Once these quotas are exhausted, a 50 percent tariff will apply, up from the current 25 percent, in line with global tariff levels with an aim to minimize the risk of trade diversion.

The measures will require importers to declare the country of “melt and pour” origin, verifying where the steel was originally produced in liquid form to prevent circumvention.

The Commission will make an assessment at the latest within two years following the adoption of this regulation to evaluate the necessity to adjust the scope of products and, if deemed necessary, it will consider making a legislative proposal to add additional steel products, including products that are made of or contain a significant amount of steel. In addition, the Commission shall evaluate the effectiveness of this regulation before July 1, 2031, and every five years thereafter.

Demand is very weak and the situation remains difficult in the global long steel products market. Mills are cutting production, protectionist measures are continuing full speed ahead, while China and other countries in the region are exporting a lot, putting pressure on prices. There is very severe competition in the market and every producer is fighting with its last penny in order to keep operating. Imports displaced by US tariffs are searching for homes, causing worldwide disruptions and any demand is contested by multiple origins.

Demand may show some improvement after the holiday season

The holiday season is over and we may observe relatively better demand in the coming months. For the last few weeks, a small price increase has been seen in Chinese domestic market, which has had a positive impact but further developments in China need to be observed. Anticipated interest rate cuts may also create a positive atmosphere in the global longs market. The price of scrap has moved sideways and the main problem is that mills are operating with no profits due to low capacity-utilization, which creates real damage for the future.

Imports still flood into Europe, summer production halts may support market balance

Imports continue to flood into Europe and demand there is weak. However, with European mills cutting production over the summer there is at least a chance of some balance returning to the market in the fourth quarter of the year. Whether this leads to a real turnaround remains to be seen. German domestic prices dropped substantially from June to August but now mills are trying to push prices back up again and recover some lost ground. Activity is still very slow, but the expectation is that September will be a better month.

Court appeals against Trump’s tariffs create further uncertainty

US President Trump has now had five of his tariff rulings challenged by courts of appeals. This will throw the market into uncertainty, more than before. It may take at least six months to have the appeals go through the court system all the way to the Supreme Court.

Domestic supply meets most demand in US longs market, prices soften a little

In the US, demand is very soft. With little to no imports, domestic supply seems to be meeting demand, which is why prices have not moved up even with the 50 percent duty on imports. On the contrary, most prices are moving down a little each week. Capacity utilization is still under 80 percent despite six months of “tariff protection”. More capacity is coming online, which means that the capacity utilization percentage will probably move down further. The market seems to be waiting for interest rate cuts. If the cut is just 0.25 percent, it will not be enough to stimulate the economy. Most stockists expect a reduction or a change in import duties, which is why they prefer to wait, instead of importing now in order to restock.

Current market is unstable and unpredictable, with an unsatisfactory outlook

Under these circumstances, the current status of the market can be described as unstable. Prices are within long-term trends, but market fundamentals and economic policies are unpredictable. The outlook of the market for the next quarter is also unstable and unsatisfactory, with weak demand and policy uncertainty pointing to continued weakness of the market.

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