EU states to vote on TRQ, variable duty alloy safeguard

The European Commission has proposed safeguard measures that combine tariff-rate quotas (TRQ) and out-of-quota variable duties on ferro-manganese, ferro-silicon, ferro-silico-manganese and ferro-silico-magnesium, in order to support EU ferro-alloy production and market share. EU member states are set to vote on the measures on 17 November.

The commission's proposed measures were circulated by the World Trade Organisation at the request of the EU on 12 November. The EU declined to comment on the document.

The vote was postponed from today and is the culmination of a safeguard investigation initiated in December 2024. The measures seek to protect seven ferro-alloy producers that have lost significant market share to lower-priced third-country imports.

The commission acknowledged that buyers benefit from low prices but argued that protective measures are in the economic and strategic interest of the EU because they ensure a viable domestic industry and steady ferro-alloy supply for EU end-markets.

Safeguards to combine TRQ, out-of-quota variable duty

The proposed measures set a tariff-rate quota for duty free entry into the EU for each product. Imports in excess of the quota are subject to an out-of-quota variable duty that is the difference between an established price threshold for each product (see table) and the actual import price.

The quota quantities are equivalent to 75pc of the EU's average imports of each product in 2022-24. This aims to give a 30-40pc "sustainable" market share to European producers, while still maintaining "adequate" supply for downstream users.

The annual quota is divided into four three-month segments, starting on 18 November. If excess imports are made at the level of the price threshold or above, no duty needs to be paid. If imports are made at a lower price, the duty paid would be equal to the difference between the net free-at-EU frontier (cif) price and the respective price threshold.

The thresholds are set at a "non-injurious price for ferro-alloy imports" determined by the cost of domestic sales for each product type, with added compliance costs, investments and a target profit. But some market participants view the price thresholds as detached from reality.

The threshold proposed by the commission is €2,408/t ($2,800/t) cif Europe, which is almost double the actual market price today. Argus assessed ferro-silicon prices at €1,180-1,235/t ddp Europe on 13 November.

The excessive size of the threshold means end-users will substitute the alloy with silicon metal or other alternative products, which makes it unlikely the ferro-silicon quota will be met and therefore the threshold will not be a factor, a ferro-silicon producer told Argus.

Norway, Iceland subject to measures

The proposed measures would apply to imports from European Economic Area (EEA) member states Norway and Iceland, affecting major producers such as Elkem and Finnfjord.

The ferro-alloy industry association that was the driving force behind the safeguard investigation, Euroalliages, called for the exclusion of Norway and Iceland from the measures, in a recent interview with Argus. The measures should not apply to either country for reasons of economic integration with the EU economy and business ties, secretary-general Bob Lambrechts said.

But Norway and Iceland have inflicted sustained economic injury on EU ferro-alloy producers and the proposed measures satisfy the requirements of Articles 112 and 113, which set out conditions and procedures for safeguards, the commission said.

Norway and Iceland supplied 47.4pc of total EU imports last year. Those imports were priced below EU producers' but were noticeably higher than imports from third countries such as India.

Silicon excluded

Silicon metal imports into the EU did not increase between 2019-24, according to the commission's analysis. Silicon metal was consequently excluded from further investigations and the resulting safeguards.

The EU imported 334,861t of silicon in 2024, near flat against 2019 imports of 335,415t, Eurostat data show. Imports decreased to 326,372t in the most recent reported 12-month period, 1 July 2024-30 June 2025.

The commission analysed imports relative to production and consumption of ferro-alloys, but it is not clear whether this analysis was done for silicon. Absolute import volumes have not increased, but EU silicon production and consumption have decreased sharply in recent years due to lower demand from aluminium alloy and silicone producers. And EU producers are not able to compete against lower-priced imports from third countries.

All EU silicon metal production is currently off line due to untenable market conditions, with shutdowns executed in France, Spain, Germany and Bosnia-Herzegovina.

Silicon metal may be affected indirectly if steel mills substitute silicon metal for ferro-silicon, although this is dependent on adjustment of production processes and ferro-silicon prices.

Major producer Ferroglobe expressed concern that silicon was excluded from these measures, but welcomed "the commission's commitment to address this in a second step in the coming months". The EU has not publicly communicated any additional trade defence investigations for silicon metal.

By Maeve Flaherty and Samuel Wood