Market evolution: Hot rolled pickled coils (CN 720825) — 2015–2025

Introduction

This report examines the EU's external trade in hot-rolled pickled steel coils (customs code 720825) over the period 2015–2025. The product — flat-rolled iron or non-alloy steel in coils, simply hot-rolled, pickled, without patterns in relief, of a thickness ≥ 4.75 mm and width ≥ 600 mm — sits at the foundational level of the steel value chain, supplying downstream manufacturing sectors including automotive, construction, and heavy machinery. Over the decade under review, the EU market for this product underwent a structural transformation driven by shrinking domestic production, growing import dependence, a dramatic reorientation of sourcing partners, and pronounced price volatility linked to global supply shocks. This report traces these dynamics in three main sections.

1. A Structural Widening of the Trade Deficit

The most striking macro-level development over 2015–2025 is the persistent and widening structural deficit in trade with non-EU countries. While both import and export values rose over the period, the imbalance grew substantially in favour of foreign suppliers.

Imports grew faster and more consistently than exports

Between 2015 and 2025, the value of EU imports of CN 720825 rose by 61.3%, from €49.3 million to €79.5 million, reaching a peak of €155.7 million in 2022. Over the same span, export values grew by only 20.2%, from €37.5 million to €45.0 million. The resulting trade balance in value terms deteriorated from −€11.8 million in 2015 to −€34.4 million in 2025 — a deterioration of nearly 192%.

The deficit was amplified by divergent volume trends

A closer look at quantities reveals an even more nuanced picture. Import volumes grew modestly by 14.2% (from 114,675 tonnes to 130,929 tonnes), but export volumes actually fell by 22.1% (from 83,383 tonnes to 64,964 tonnes). The fact that export values still rose despite falling volumes points to a strong price effect — average export unit values climbed from €449/tonne to €646/tonne (+43.9%), outpacing the 41.3% rise in import prices (from €430/tonne to €607/tonne). This suggests that EU exports increasingly targeted higher-value or more remote markets, while the EU absorbed growing volumes of competitively priced imports.

The EU's net import reliance has strengthened significantly

The net import reliance ratio — which measures the trade balance relative to domestic absorption — rose from 16.9% in 2015 to 26.0% in 2025, a 53.8% increase. At its peak, it reached this 26% level, meaning that over a quarter of the EU's apparent consumption of hot-rolled pickled coils was sourced from abroad. Notably, the ratio briefly turned negative in 2017–2018 (dipping to −1.1%), indicating that the EU was close to self-sufficient or a net exporter in those years. The subsequent reversal underscores the structural shift towards greater external dependency.

2. A Radical Reshaping of the Supplier Landscape

The period 2015–2025 saw not only a quantitative increase in imports but a qualitative transformation of the EU's sourcing geography. Geopolitical events — most notably sanctions on Russia and the EU's steel safeguard measures — drove a dramatic diversification away from some traditional suppliers and towards new ones.

Russian imports collapsed to near zero under sanctions

The most dramatic single-country shift involved the Russian Federation. In 2015, Russia was one of the EU's top suppliers of CN 720825, exporting €10.9 million worth of the product to the EU. By 2025, Russian imports had fallen to a mere €146,374 — a decline of 98.7%. This near-total elimination reflects the impact of EU sanctions following the invasion of Ukraine, which progressively restricted imports of Russian steel products. Russia's high coefficient of variation (0.99) in import flows confirms the abrupt and disruptive nature of this supply shock.

Türkiye and Taiwan emerged as dominant replacement suppliers

The vacated Russian volumes were partly absorbed by a handful of emerging suppliers. Türkiye saw the most spectacular growth among traditional partners, with EU imports rising from €6.2 million in 2015 to €25.5 million in 2025 — an increase of 312.9%. This made Türkiye the single largest import partner by value in 2025. Taiwan followed a similar trajectory, albeit from a much lower base: imports surged from €1.1 million to €12.7 million (+1,045.5%). Serbia also emerged as a growing supplier, with imports quadrupling from €1.0 million to €4.8 million (+364.8%).

Import concentration has marginally increased

The Herfindahl-Hirschman Index (HHI) for imports by value rose from 1,943 to 2,071 over the period, indicating a slight increase in supplier concentration. While still below the 2,500 threshold commonly associated with a highly concentrated market, the upward trend — combined with the growing share of a few key partners such as Türkiye and Taiwan — suggests that the diversification away from Russia has not fully reduced the EU's exposure to individual supplier risk. On the export side, the HHI fell modestly from 1,903 to 1,723, reflecting somewhat more diversified export destinations.

EU export destinations shifted towards developing markets

On the export side, the United Kingdom consolidated its position as the EU's primary non-EU export market, with the value of EU exports to the UK rising from €10.9 million to €15.5 million (+41.5%). Among the top export partners, however, the most notable growth occurred in developing markets: Bangladesh (+302.2%), Mexico (+258.5%), and Egypt (+52.1%). By contrast, exports to Türkiye fell by 55.1%, to the United States by 20.0%, and to Switzerland by 12.9% — suggesting that the EU is progressively losing competitiveness in higher-income markets while finding outlets in emerging economies.

3. Domestic Production Decline and Rising Vulnerability

Underlying the trade dynamics described above is a sustained contraction in EU domestic production, which has raised the sector's structural dependence on imports and heightened its vulnerability to external supply shocks.

EU production volumes fell sharply while values held up

The data on EU production volumes reveals a 23.0% decline over the period, from approximately 25.8 billion kg in 2015 to 19.9 billion kg in 2025. Production values fell more modestly, by 5.5% (from €13.3 billion to €12.6 billion), confirming that the volume decline was partly offset by higher unit prices. This pattern is consistent with the broader EU steel industry trend of capacity rationalisation, decarbonisation-driven restructuring, and the mothballing of blast furnaces.

The EU's export propensity has collapsed

Perhaps the most telling indicator of the sector's weakening competitiveness is the export propensity — the share of domestic production that is exported. This metric fell from 12.9% in 2015 to just 7.5% in 2025, a decline of 42.2%. In the context of the vulnerability analysis, export propensity emerges as the most salient vulnerability indicator (salience score: 84.7), far outweighing trade intensity (16.2). This signals that the EU is not only importing more but is also becoming structurally less capable of competing on international markets for this product.

Specialised EU producers are concentrated in a handful of member states

The specialisation analysis for 2025 shows that a small group of member states account for the bulk of the EU's comparative advantage in CN 720825:

Belgium alone accounts for 24.1% of EU production of this product, followed by France (16.1%) and Austria (8.3%). At the other end of the spectrum, countries such as Czechia, Bulgaria, Hungary, Malta, and Portugal display a near-zero or negative RSCA, indicating they are essentially non-producers. This geographic concentration means that any disruption to the major producing member states — whether from energy price shocks, industrial action, or carbon border adjustments — could have outsized effects on the EU's overall supply position.

Supply shocks have become a defining feature of the market

The volatility analysis reveals that the 2021–2022 period was marked by severe price shocks across multiple partner relationships. The most notable events include:

• United States (exports): A price abnormality of 31.4σ and a 70.3% shift in 2021, representing 17.3% of export value — likely linked to the post-COVID steel price surge.
• Serbia (imports): A price abnormality of 25.6σ and a 99.6% shift in 2021, reflecting extreme price movements.
• Korea, Republic of (imports): A 96.4% price shift in 2022, with 24.9% value share — indicating that the EU's largest import partner by value also experienced significant price instability.

Several partners exhibit very high coefficients of variation, notably China (CV: 2.18), Japan (CV: 1.38), Iran (CV: 1.17), and Brazil (CV: 0.98) — indicating that trade flows with these partners have been highly erratic, likely driven by the on-again, off-again application of trade defence measures and quota allocations.

Conclusion

Over the decade 2015–2025, the EU market for hot-rolled pickled coils (CN 720825) has undergone a fundamental structural transformation. Domestic production contracted by 23% in volume, the trade deficit more than tripled in value, and net import reliance rose to 26%. The supplier landscape was radically reshaped by EU sanctions on Russia, which eliminated a €10.9 million import flow and redirected demand towards Türkiye, Taiwan, and other emerging suppliers — without fully reducing concentration risk. On the export side, the EU's competitive position eroded sharply, with export propensity halving from 13% to 7.5%. Meanwhile, the 2021–2022 global steel price crisis exposed the market's vulnerability to supply shocks, with extreme price abnormalities recorded across multiple partner relationships.

Looking ahead, the EU's strategic challenge in this segment will be to reconcile its decarbonisation ambitions — which imply further capacity rationalisation — with the need to maintain a degree of supply security in a foundational steel product. The growing reliance on a small number of non-EU suppliers, combined with the geographic concentration of domestic production in a handful of member states, suggests that policy attention to this segment remains warranted.