Exhaustion Exposé Electrifies Economic Equilibrium

As the June 30 quarter‑end approaches, the EU’s steel import quota system faces acute stress. European Commission data reveals full exhaustion of quotas for hot‑rolled coil (HRC 1A) from South Korea at 161,143 metric tons and organic‑coated sheets at 71,028 metric tons. China’s quota for merchant bars and light sections (140,266 t) is also tapped out, highlighting a supply crunch just as Q2 concludes.

Kiloton Quotas Quashed by Korean Quantities

South Korea’s steel exports have fully consumed their quotas: 161,143 metric tons of HRC (1A), 71,028 t of organic‑coated sheets, and 110,038 t of quarto plates. Meanwhile, quotas set under “other countries” for Korea, 48,916 t of metallic coated sheets (4A) at 94.19% and 94,591 t of cold‑rolled coil at 98.48%, are nearing exhaustion. This status suggests Korea has leveraged both direct and general quotas to maximum effect.

China’s Quota Collapse Curbs Coil Competitiveness

China has exhausted its 140,266 t merchant bars and light sections quota. For electrical sheets (3B), China’s allocation of 39,732 t is 84.72% used, leaving limited room for last‑minute shipments. These figures underscore the restricted access Chinese mills now have to the EU market within this quota cycle.

Turkish Tariff Thresholds Teeter on Exhaustion

Turkey’s quotas are almost depleted: HRC (1A) at 93.97% of 627,026 t, stainless cold‑rolled sheets at 95.6% of 21,177 t, gas pipes at 99.95% of 49,432 t, other welded pipes at 93.6% of 43,093 t, and metallic coated sheets (4A under “other countries”) at 99.95% of 118,012 t. Even an 110,038 t quarto plate quota is pledged at 93.28%. These numbers paint a vivid picture of Turkish exporters aggressively tapping EU demand.

Multinational Metrics Mirror Market Mania

Quotas for other nations under “other countries” are also nearly exhausted: Australia’s HRC (1A) at 99.34% (111,380 t); Japan’s CRC stainless at 99.87% (43,468 t); Taiwan’s CRC at 82.47% and organic‑coated sheets at 99.79%; Indonesia’s quarto plates at 93.28% (110,038 t); Egypt’s rebar at 99.92% (27,568 t); Malaysia and Algeria’s wire rod quotas around 99.5% (15,074 t); Macedonia’s hollow sections at 99.77% (28,852 t); and the UK’s seamless pipe quota at 95.6% (39,728 t).

Industrial Implications Ignite Internal Indigestion

European manufacturers reliant on imported steel, such as automotive, appliance, and infrastructure sectors, now face tightening access. As quotas near depletion, businesses may encounter procurement bottlenecks or pay higher prices under standard tariffs. These constraints could ripple through the EU’s manufacturing and construction ecosystems, escalating production costs and weakening competitiveness.

Policy Parry Prompts Protective Posture

European policymakers must decide whether to adjust quotas, release emergency allotments, or allow the market to respond naturally to scarcity. Balancing industrial demand and domestic steel sector safeguards poses a diplomatic challenge. Any recalibration must comply with WTO frameworks, anti‑dumping rules, and internal Commission mandates.

Market Maneuvering Muscles Margin Management

With quotas nearly depleted, exporters will intensify efforts to ship before restrictions halt flows. EU buyers may stockpile or pivot to covered sources, while domestic mills could see short‑term gains. These dynamics will test resilience across procurement chains and fiscal forecasting for Q3.

Key Takeaways:

• Quotas from South Korea (HRC 161,143 t & quarto 110,038 t), China (merchant 140,266 t), Turkey, and others are nearly or fully exhausted.

• Multiple steel categories, HRC, CRC, coated sheets, rebar, pipes, are at 84%‑100% usage, restricting access and pressuring prices.

• EU must weigh quota adjustments to support industry supply without undermining domestic steel competitiveness.