Posted on 08 Oct 2026
The European Union's new "melt-and-pour" origin rule for steel, effective October 1, is set to reshape stainless steel exports from Indonesia and China. The rule tightens traceability requirements from the outset and, from October 2027, links melt-and-pour data to import quota allocation.
The rule does not impose new tariffs directly, but significantly strengthens origin tracing requirements, closing a loophole that allows third-country processing to disguise the true origin of steel and to circumvent EU trade defense measures, sources note.
Under the provision, importers must identify the country where the steel was originally melted and cast – a location that may not be the same as the country of final processing. From October 2026, importers are required to provide a Mill Test Certificate that includes the melt-and-pour country and the heat number, though alternative documents may be accepted as standalone evidence during a one-year transition period.
From October 2027, alternative documents will no longer be accepted as standalone evidence, and melt-and-pour data will begin feeding into quotas for steel import volumes. During the first transitional year, however, the declared melt-and-pour origin will not be used to determine quota allocation, which continues to be based on the Customs area origin of the goods.
Impact on Indonesia
Indonesian stainless steel exporters are expected to be among the hardest hit, Mysteel Global notes. In the January-July period, Indonesia exported around 127,900 tonnes of stainless steel to the EU, of which slabs accounted for roughly 120,000 tonnes, or 93.9%, according to data from Statistics Indonesia.
Because slabs are not currently subject to trade measures, European mills have relied on imported Indonesian slabs for local rolling to avoid anti-dumping and countervailing duties on finished products. Under the new rule, even if Indonesian slabs are rolled in Europe, their melt-and-pour origin remains Indonesia.
From October 2027, such slabs will therefore count against Indonesia's quota, squeezing available space for Indonesian finished products. Combined with existing trade barriers on Indonesian hot-rolled and cold-rolled stainless steel, direct exports to Europe will become less economically viable.
Impact on China
China's stainless steel exports to Europe already face high trade barriers. Cold-rolled products are subject to anti-dumping duties of 24.4-25.3%, keeping direct export volumes minimal. Hot-rolled products face duties of 9.2–19% and are also under sunset review, with China's quota access limited to a small country-specific allocation and the first-come, first-served residual pool.
Under the new regulation, hot-rolled products are among the categories that must provide full traceability documents. If Chinese hot-rolled coils and sheets or slab material are simply rolled in third countries such as Vietnam or Turkey before being shipped to the EU, the stainless will still be identified as being of Chinese-origin, consuming China's quota. Once the quota is exhausted, a 50% over-quota tariff applies, erasing price competitiveness.
The new rule is expected to sharply reduce the feasibility of grey re-export routes through Turkey and Vietnam for Chinese material.
Outlook
The EU's new policy is likely to reduce Indonesian slab inflows, improve the competitiveness of European local mills, but raise procurement costs for downstream manufacturers, Mysteel Global notes.
Indonesia and China are expected to accelerate diversification away from the EU toward Southeast Asia, the Middle East and South America, intensifying competition for stainless business in those markets.
Source:Mysteel Global
