Market evolution: Hot rolled pickled coil under 3mm (CN 720827) — 2015–2025

Introduction

This report analyses the trade dynamics of hot-rolled pickled flat-rolled coils of iron or non-alloy steel under 3mm thickness (customs code 720827) within the European Union over the period 2015–2025. This product is a foundational semi-finished steel input used across automotive, construction, and appliance manufacturing. The decade under review has been marked by significant disruptions—including the post-COVID steel price surge, the impact of EU safeguard measures, and sanctions on Russian steel—making it a particularly instructive case study for understanding how global trade flows in basic steel products have reconfigured around the EU.

The data reveals three overarching stories: the EU's progressive shift from a net exporter toward net import dependence, a dramatic reorientation of supplier geography away from Russia and toward Asia and the Western Balkans, and a period of exceptional price volatility that reshaped both value flows and competitive dynamics.

1. From Net Exporter to Import-Dependent: A Structural Shift in the EU's Trade Balance

1.1 The trade balance inversion

The most striking macro-level development over the decade is the EU's transformation from a net exporter to a net importer of CN 720827. In 2015, the EU recorded a trade surplus of approximately EUR 61.9 million. By 2025, this had swung to a deficit of EUR 132.1 million—a deterioration of over 300%. This structural shift was not sudden but unfolded progressively, accelerating after 2020.

1.2 Diverging volume trajectories

The underlying volume data tells an even starker story. EU exports of this product fell by 50.9% in quantity over the period, declining from 391,555 tonnes to 192,059 tonnes. Meanwhile, import volumes grew by 62.4%, rising from 278,081 tonnes to 451,495 tonnes. By 2025, the EU was importing more than twice the volume it exported—a complete inversion of the 2015 relationship.

1.3 Rising net import reliance

The net import reliance ratio confirms this structural shift. It rose from 16.9% in 2015 to 26.0% in 2025—a 53.8% increase. At its peak, the ratio briefly turned negative (approximately -1.1% in 2017), meaning the EU was briefly a significant net exporter by this metric. The subsequent and persistent rise to 26% signals a lasting reorientation of the EU's position in this market segment.

1.4 Declining export propensity

The export propensity—the share of domestic production that is exported—dropped from 12.9% to 7.5% (-42.2%). This decline indicates that EU mills increasingly oriented their output toward the domestic market rather than international sales, consistent with reduced competitiveness in third-country markets or stronger domestic absorption. Meanwhile, trade intensity remained broadly stable at around 35%, suggesting that the overall openness of the EU market to this product category did not dramatically change—but the direction of flows did.

2. Geopolitical Disruption and Supplier Reorientation

2.1 The collapse of Russian supply

The most dramatic single-country shift in the import data is the near-total disappearance of Russian Federation supply. In 2015, Russia was the EU's largest single import partner by value at EUR 38.3 million. By 2025, Russian imports had collapsed to just EUR 164,149—a decline of 99.6%. This reflects the impact of EU sanctions imposed following the 2022 invasion of Ukraine, which progressively restricted imports of Russian steel products.

2.2 The rise of Asian suppliers

The vacuum left by Russia was filled primarily by East and Southeast Asian suppliers. The most dramatic growth was recorded by:

Taiwan emerged as the EU's single largest import partner by 2025, having grown from a relatively minor supplier to capturing over EUR 108.9 million in trade—a thirteen-fold increase. This likely reflects both the competitiveness of Taiwanese integrated mills and their ability to fill the supply gap created by geopolitical realignment.

Türkiye similarly surged from marginal supplier (EUR 1.6 million) to a major source (EUR 46.0 million). Turkey's geographical proximity to the EU, its modernised steel capacity, and its Customs Union with the EU all facilitated this rapid reorientation.

Egypt followed a similar trajectory, growing from EUR 1.1 million to EUR 27.1 million, suggesting that Egyptian steel producers have successfully positioned themselves as competitive suppliers to the EU market—potentially leveraging lower energy costs.

Serbia, as an EU candidate country with preferential trade arrangements, grew from EUR 11.5 million to EUR 40.1 million, cementing its role as a significant regional supplier.

2.3 The stability and decline of traditional suppliers

In contrast to the new entrants, traditional suppliers showed more mixed performance:

South Korea maintained a relatively stable presence, while India showed modest growth. Both countries have historically been important steel suppliers to the EU and appear to have maintained their positions without major gains, suggesting they were less able or willing to capitalise on the Russian supply disruption.

2.4 Import concentration increased

Despite the diversification away from Russia, the import concentration index (HHI) actually increased from 1,990 to 2,205 (+10.8%). This seemingly paradoxical result—higher concentration despite supplier diversification—reflects the fact that while Russia was displaced, the replacement suppliers (particularly Taiwan and Türkiye) grew so rapidly that they became dominant individually, leading to a more concentrated supply base than the more distributed Russian-era pattern.

2.5 Export markets: contraction in traditional destinations

On the export side, the EU experienced significant declines in several key markets:

The Swiss decline is particularly notable and may reflect both the strong appreciation of the Swiss franc making EU exports less competitive and Switzerland's own sourcing diversification. The halving of exports to Türkiye is ironic given Turkey's simultaneous surge as an EU supplier—suggesting that the EU-Türkiye steel trade relationship has become increasingly asymmetric.

The United Kingdom, the EU's largest single export destination, showed modest growth (+14.5% to EUR 36.6 million), likely reflecting the structural importance of EU-UK steel trade flows even post-Brexit.

2.6 Internal EU shifts

Within the EU, the import geography shifted notably:

Germany's near-complete withdrawal from imports of this product (from EUR 13.1 million to EUR 0.5 million) is remarkable and may reflect the restructuring of the German steel sector, increased domestic sourcing, or the shift toward higher-value product categories. In contrast, Spain and Portugal became major importers, possibly reflecting the growth of their automotive and appliance sectors and their logistical position as entry points for transhipment from Asian suppliers.

Belgium maintained its position as the EU's most specialised exporter of this product (with a Revealed Symmetric Comparative Advantage of 0.61 and an RCA of 4.11), consistent with its role as home to major steel processing and trading hubs.

3. Price Shocks, Volatility, and the 2021 Inflection

3.1 The dramatic price trajectory

The period 2015–2025 witnessed extreme price movements for CN 720827. EU import prices ranged from a low of EUR 396/t to a peak of EUR 971/t—a 2.5-fold variation. Export prices showed even greater amplitude, ranging from EUR 465/t to EUR 1,009/t.

Export prices consistently exceeded import prices, reflecting the higher-value positioning of EU-origin steel. This premium widened over the period, with the export-import price differential growing from EUR 26/t in 2015 to EUR 158/t in 2025.

3.2 The 2021 price shock

The year 2021 stands out as the epicentre of price disruption. The shock detection analysis identifies three major price shock events centred on 2021:

The US export shock was the most extreme, with prices more than doubling in a single year and an abnormality score of 74.8 (indicating a highly statistically unusual event). This coincided with the global steel price surge driven by post-COVID restocking, supply chain disruptions, and the US Section 232 tariffs creating a premium market. EU exporters to the US captured enormous price premiums during this window.

The Serbia import shock (prices +93.1%) reflects the pass-through of global raw material and energy cost increases to Serbian mills, which then transmitted these higher costs to EU buyers.

3.3 Volatility patterns by partner

The coefficient of variation (CV) data reveals which trade relationships were most volatile over the decade:

Most volatile import sources (by value CV):

The extreme volatility of Japanese imports (CV 1.66) likely reflects the intermittent nature of trade flows from Japan, which typically supplies specialised grades. Iranian and Ukrainian volatility reflects geopolitical disruptions (sanctions on Iran, conflict in Ukraine). Russian volatility captures the pre-sanctions boom followed by the sanctions-driven collapse.

Most stable export destinations:

The UK's low volatility (CV 0.20) confirms its role as the EU's most reliable and stable export market for this product, underpinned by geographical proximity, integrated supply chains, and the structural dependence of UK steel-consuming industries on EU supply.

3.4 Production decline and price-volume dynamics

EU production of CN 720827 declined by 23% by volume (from 25.8 billion kg to 19.9 billion kg) and by 5.5% by value over the period. The fact that value declined less than volume indicates that higher unit prices partially offset the production contraction. This production decline is consistent with the broader trend of EU steel capacity rationalisation, driven by high energy costs, decarbonisation pressures, and competition from lower-cost producers.

The interaction between declining production, falling exports, and rising imports points to a market where EU producers are losing share in the lower-thickness hot-rolled segment while potentially shifting toward higher-value or thicker product specifications. The specialisation analysis supports this: Belgium, Austria, and Slovakia are the most specialised EU producers, while larger economies like Germany show minimal specialisation in this specific product category.

Conclusion

The EU market for hot-rolled pickled coils under 3mm (CN 720827) has undergone a fundamental transformation between 2015 and 2025. Three interconnected dynamics define this transformation:

First, the EU has shifted from a net exporter to a net importer, with import reliance rising to 26% and export volumes halving. This structural change reflects the cumulative impact of EU capacity rationalisation, rising domestic energy costs, and increasing competitiveness of third-country suppliers.

Second, the supplier landscape has been dramatically reshaped by geopolitical forces. The collapse of Russian supply—from the EU's largest import source to near-zero—created a vacuum that was filled primarily by Taiwan, Türkiye, and Egypt. These three suppliers collectively grew by over EUR 170 million, more than offsetting the Russian decline. However, this concentration of new supply has increased import dependency risk, as evidenced by the rising HHI.

Third, the 2021 global steel price shock marked an inflection point, with prices more than doubling for key trade relationships and subsequently normalising at levels well above pre-2020 norms. The extreme volatility of the period revealed the vulnerability of trade flows to supply chain disruptions and the speed at which price signals can reconfigure sourcing patterns.

Looking forward, the data suggests the EU's dependence on imported thin hot-rolled coil is likely to persist or deepen unless domestic capacity is expanded or redirected. The continued growth of Asian and Western Balkan suppliers, combined with the EU's declining export competitiveness in this segment, points to a market where the EU increasingly acts as a demand centre rather than a production hub for standard-grade hot-rolled pickled products.