EU steel quotas exhausted within days: CBAM makes new imports nearly impossible

India completely exhausted its hot-rolled coil (HRC) allocation for the first quarter of 2026 just nine days after renewal. According to European Commission customs data, HRC quotas for Türkiye and Taiwan were nearly full as of 9 January. Market sources indicated that due to high demand, there was a significant volume of "old tonnage" that buyers could not clear through customs during the October-December 2025 period, and these volumes therefore needed to be transferred for customs clearance in January.

A buyer in Southern Europe said: "We couldn't complete the customs procedures for all of the [HRC] we ordered duty-free from Türkiye for Q4 2025." Quotas allocated to traditional suppliers Egypt, Vietnam, and Japan (see table) remained intact because all three countries were subject to anti-dumping (AD) duties in the EU. Definitive duties against these three suppliers were imposed at the end of September. The situation was even more striking for the finished flat steel market, which traditionally relies more heavily on imports. In cold-rolled coil (CRC) production, Türkiye had consumed nearly its entire allocation by 9 January; Taiwan's quota was also fully used. Vietnam had used approximately 80% of its January-March allocation.

CBAM has made new steel imports "nearly impossible"

For hot-dip galvanised coil (HDG), quota utilisation was also high. According to trade sources, tight quotas and the entry into force of the EU's Carbon Border Adjustment Mechanism (CBAM) on 1 January made new steel imports "extremely difficult" and even "nearly impossible." Sources noted that during customs clearance of new imports in January 2026, customs officers demanded advance payment to cover CBAM costs.

The CBAM application was expected to increase flat steel import prices by approximately €35–600 ($41–702) per tonne depending on the country of origin, assuming default emission values are used to calculate the CBAM charge. A buyer in Germany said: "Imports are out of control. There's no coil shortage in the market so far, but domestic mills are definitely a more reliable option." According to information obtained by Fastmarkets, the confusion surrounding new imports supported the upward trend in the domestic market despite stable end-user demand.

Mills quoting from €700 per tonne for Q2

Fastmarkets' daily hot-rolled steel coil index (domestic, Northern Europe delivered) was €635.00 per tonne on Friday — a €0.75 increase from the €634.25 per tonne recorded on 8 January. The index rose €7.50 week-on-week and €12.19 month-on-month. According to market sources, suppliers in Northern Europe were offering HRC for February-March shipment at €630–650 per tonne, tonnage for March-April delivery at €650–670, while some mills quoted from €700 per tonne for Q2.

In the long steel sector, quota utilisation lagged notably behind flat steel products, with CBAM cited as the main barrier. The only sectors with significant quota utilisation were Turkish rebar and wire rod, where 60.5% and 68.4% of quotas were used respectively.

This was followed by Algeria, which took 29.4% of the rebar quota and 39.9% of the wire rod quota. "I think quota [utilisation] is weak because normally Algerian, Egyptian, and Turkish-origin products are taken on the first day of the quarter," said a trader. "What we're seeing now is plenty of tonnage remaining for all countries and products, because many people are staying away from imports due to CBAM — they don't understand the cost calculations." "Flat steel prices in Europe have risen significantly in the past few months," they added, "but the long steel sector has been slow to react, so demand has shifted to local suppliers." Fastmarkets' price assessment for domestic steel rebar delivered to Northern Europe averaged €607.50 in January, compared with an average of €603.50/tonne in December 2025. The weekly price assessment for domestic steel wire rod (mesh quality) delivered to Northern Europe was €595 per tonne in January, compared with an average of €591 per tonne in December 2025.