Europe’s ‘Melted and Poured’ Rules to Shape Future of Steel Trade by September 2025
In a move that could reshape the global steel trade, the European Commission is expected to provide more clarity by September 2025 regarding its new "melted and poured" regulations. These changes, part of the European Steel and Metals Action Plan, will have significant implications for how steel products are traced to their origin, with the goal of tightening trade defense measures and curbing carbon leakage. The European Commission plans to ensure that all steel imported into Europe is clearly identifiable by its production source, which could lead to substantial changes in the steel trade dynamics.
The "melted and poured" rule essentially means that Europe will have the ability to trace not just the finished product but also the materials used in the production of steel. For instance, if a Turkish company exports hot-rolled coil (HRC) to Europe, but the slab used in the HRC production originated from China, European regulators could impose import duties on the slab, even if the final product is Turkish. This regulation will require exporters and buyers to trace the origins of the steel materials back to their sources, which could include looking back up to three years to confirm production history.
These regulatory changes, introduced in the European Steel and Metals Action Plan, reflect the Commission’s intention to strengthen its steel trade defense measures and focus on reducing carbon emissions. However, while the principles of the "melted and poured" rule are now clear, the specific mechanisms for tracking steel origins remain under review. Legal experts, such as Fabrizio Di Gianni, partner at Van Bael & Bellis, shared these insights during a recent presentation at the Eurometal Steel Day and the 10th YISAD Flat Steel Conference in Istanbul on April 8, 2025.
Key Features of the ‘Melted and Poured’ Rule and its Implications
The core feature of the new regulation revolves around tracing the precise origin of steel, from raw materials to the final product. If hot-rolled coils are produced in Turkey, but the slab used in their production originates from China, European authorities may impose an import duty on the Chinese slab rather than the Turkish finished product. This change is expected to create a more transparent supply chain and encourage the reduction of carbon footprints associated with steel production.
The rule has raised several questions about how such tracking will be conducted, especially in cases where materials undergo further processing. For example, a company in Turkey may purchase hot-rolled coils, galvanize them, and export the galvanized product to Europe. The challenge here is determining the origin of the slab, which may not be clearly identifiable once the material is processed.
Fabrizio Di Gianni addressed such concerns during his presentation at the conference, acknowledging that the European Commission would seek to investigate why the galvanizing was done in Turkey, potentially to circumvent duties on Chinese hot-dipped galvanized steel. This raises the issue of enforcement and ensuring the accurate traceability of steel materials through complex production and processing stages.
Furthermore, the Commission is facing the challenge of determining how end-users like automotive exporters will be able to trace the location of melting, given that the melting process often occurs in multiple locations. The ultimate aim is to prevent circumvention of trade defense measures, which could involve rerouting steel through different countries to evade duties.
Expected Impacts on Steel Exporters and Supply Chains
The "melted and poured" rule will have wide-reaching effects on steel exporters and supply chains. Steel producers, particularly those in countries outside Europe, will need to be much more diligent in documenting the origin of their raw materials. The rule’s retrospective nature, allowing investigations to go back as far as three years, will add another layer of complexity to compliance, as companies will be required to keep detailed records of their production processes over an extended period.
Moreover, the new regulation could also lead to increased costs for companies that need to ensure full traceability of their products. Exporters and buyers alike may face challenges in proving the origins of their materials, particularly when dealing with secondary processing like galvanization. The imposition of import duties on materials based on their country of origin could lead to higher prices for certain steel products, particularly those produced with imported slabs or other materials subject to tariffs.
While the European Commission is expected to announce more details by the third quarter of 2025, these regulations will likely alter the way steel companies operate. Producers will need to adapt their supply chains to meet the new requirements, which could involve securing more reliable documentation of the origins of raw materials or restructuring their production processes to minimize the potential for duty imposition.
Challenges in Implementing the ‘Melted and Poured’ Rule
One of the primary challenges of implementing the "melted and poured" rule lies in its complexity. The traceability of steel products will require detailed documentation and sophisticated tracking mechanisms, particularly as products pass through different stages of production in various locations. As noted by Di Gianni, key questions remain about how galvanizers, who may not know the original source of the slabs they purchase, will navigate the new rules. The European Commission will need to create a clear and transparent system for tracking the origins of materials without imposing undue burdens on companies that are simply processing steel products.
Additionally, the rule’s retrospective nature could create complications for companies that have already sold or exported steel products in the past few years. Businesses may need to revisit old transactions and verify the origins of materials used, potentially facing penalties if discrepancies are found. This could lead to further complications for industries that rely heavily on steel imports, such as automotive manufacturing, which often involves complex supply chains with materials sourced from multiple countries.
The potential for limits on scrap exports from Europe, also outlined in the European Commission’s Steel Action Plan, could further complicate the regulatory landscape for steel producers and exporters. By restricting the export of scrap materials, the Commission hopes to ensure that more steel is recycled within Europe, reducing the environmental impact of steel production.
Anticipated Timeline and Future Developments
The European Commission has set a clear timeline for the implementation of the "melted and poured" rule, with a full announcement expected by September 2025. This will provide steel producers and exporters with more clarity on how to comply with the new regulations and adapt their supply chains accordingly. Until then, companies are left to navigate a complex and evolving regulatory environment, with uncertainties still surrounding how specific materials will be traced and what evidence will be required to verify their origin.
In the coming months, industry stakeholders will be keenly watching for further updates from the European Commission, which may provide additional insights into how the rule will be enforced. These developments are expected to have a profound impact on the global steel market, particularly for exporters to Europe who will need to adjust their practices to ensure compliance with the new regulations.
Key Takeaways:
• The European Commission is set to clarify the "melted and poured" rule by September 2025, which will trace the origin of steel products imported into Europe.
• If steel products are produced with raw materials from another country, the Commission may impose duties on the original material’s origin.
• The rule could require companies to trace the origins of materials going back up to three years, adding complexity to steel supply chains.
• Challenges remain around tracking materials that undergo further processing, such as galvanization, especially when the origin of the raw materials is not clear.
• The European Commission will also explore limits on scrap exports to support recycling and reduce carbon emissions in the steel industry.
• Industry experts are awaiting more details on how the rules will be implemented and enforced, with clarity expected by the third quarter of 2025.
• The regulations may increase costs and add administrative burdens for steel exporters, particularly in countries outside Europe.
