Market evolution: Hot rolled steel coil 3-4.75mm (CN 720838) — 2015–2025

Introduction

This report examines the evolution of EU trade in hot-rolled flat-rolled steel coils of 3–4.75 mm thickness (customs code 720838) over the period 2015–2025. The product sits at the core of the European steel value chain, serving construction, automotive, and heavy equipment sectors. The data reveals a dramatic structural transformation: the EU has shifted from being a modest net exporter to a significantly more import-dependent market, with its trade deficit more than doubling in value. This transformation has been accompanied by a sweeping geopolitical realignment of supply sources—driven by sanctions, emerging supplier nations, and shifting competitive dynamics—alongside a period of extraordinary price volatility triggered by the 2021 global steel market shock. The following sections unpack these dynamics in detail.

1. The Structural Erosion of EU Export Capacity and Growing Import Dependence

The most striking feature of the decade is the simultaneous collapse of EU exports and the sustained growth of imports, producing a fundamental shift in the EU's trade posture for this product.

EU export volumes fell by 70% while import volumes grew by 25%

Over the full period, EU exports of CN 720838 declined from 536,392 tonnes (€196.5 million) in 2015 to 159,646 tonnes (€94.6 million) in 2025—a volume contraction of 70.2% and a value decline of 51.8%. Over the same period, imports grew from 2,047,898 tonnes (€781.3 million) to 2,554,466 tonnes (€1,358.8 million), a volume increase of 24.7% and value increase of 73.9%. The trade deficit consequently widened from −€584.8 million to −€1,264.2 million, a deterioration of 116.2%.

The fact that value declined less sharply than volume for exports (−51.8% vs. −70.2%) reflects higher average unit prices at the end of the period (€587/t in 2025 vs. €366/t in 2015, +60.2%). The EU is exporting less steel but at higher prices per tonne, suggesting that its remaining export base may be shifting toward higher-value niches or that global price inflation has partly offset the volume decline.

Domestic production contracted by 23%, signalling an underlying capacity problem

The export decline did not occur in isolation. EU production of this product fell from 25.8 billion kg in 2015 to 19.9 billion kg in 2025 (−23.0%), while production value declined from €13.3 billion to €12.6 billion (−5.5%). The smaller decline in value relative to quantity again points to rising unit prices, but the underlying message is clear: the EU's hot-rolled steel production base has materially shrunk.

This contraction is consistent with broader structural trends in European steelmaking—plant closures, the transition to lower-carbon production methods (electric arc furnaces), and competitive pressure from lower-cost producers outside the EU.

Net import reliance rose from 17% to 26%, while export propensity halved

The net import reliance ratio (net imports as a share of apparent consumption) climbed from 16.9% in 2015 to 26.0% in 2025—a 53.8% increase. Notably, this figure briefly turned negative in 2017 (−1.1%), suggesting the EU was at that point a marginal net exporter, before the subsequent reversal.

Meanwhile, export propensity (exports as a share of production) collapsed from 12.9% to just 7.5% (−42.2%). This was identified as the most salient vulnerability metric, with a salience score of 84.7 out of 100. Trade intensity (total trade relative to production) remained broadly stable at around 35%, indicating that the EU's overall engagement with international markets in this product has not diminished—it is the direction of that engagement that has shifted decisively towards imports.

2. Geopolitical Realignment of Supplier and Destination Markets

Beyond the aggregate numbers, the decade saw a profound reshuffling of the EU's trade partners for this product, driven by sanctions, competitive shifts, and the emergence of new supply chains.

Russia's near-total exclusion from EU imports created a supply gap of over €100 million

In 2015, Russia was the largest single source of EU imports by value (€104.7 million), and remained a major supplier through 2021 (peaking at €371.6 million). By 2025, Russian imports had fallen to just €119,389—a decline of 99.9%. This collapse directly reflects the EU sanctions regime imposed following Russia's invasion of Ukraine in February 2022. The import concentration HHI declined from 1,543 to 1,273 (−17.5%), partly reflecting this diversification away from a formerly dominant supplier.

Türkiye, Ukraine, India, and Vietnam filled the vacuum

The gap left by Russia (and the declining role of Brazil, which fell 92.8% from €107.5 million to €7.7 million) was absorbed by a cluster of suppliers:

• Türkiye surged from €39.5 million to €209.5 million (+430.6%), becoming the top import source by value. Its geographic proximity and competitive cost base made it a natural beneficiary of the EU's search for alternative suppliers.
• Ukraine more than doubled from €101.6 million to €233.0 million (+129.4%), becoming the second-largest supplier—despite the ongoing war on its territory. This resilience reflects the strategic importance of Ukrainian steel to the EU and the commitment to supporting Ukraine's economy.
• India grew from €11.1 million to €49.4 million (+346.0%), reflecting India's expanding steelmaking capacity and aggressive export strategy.
• Viet Nam experienced the most explosive growth—from €3.3 million to €69.0 million (+1,983.6%). Though starting from a low base, Vietnam's emergence as a significant steel supplier to the EU reflects broader supply-chain shifts in Asia and the development of Vietnamese steelmaking (often with Chinese-origin inputs).

EU export markets contracted and concentrated around the UK

On the export side, the picture is one of decline and concentration. Total export value fell from €196.5 million to €94.6 million, and the export HHI rose from 3,229 to 4,787 (+48.3%), indicating significantly higher concentration.

• Türkiye was the EU's largest export market in 2015 (€105.4 million) but shrank by 73.5% to €28.0 million—paradoxical given that it simultaneously became the EU's top import source. This reflects Türkiye's transformation from a net buyer of EU steel to a competitive exporter.
• The United Kingdom emerged as the dominant export destination, growing from €20.0 million to €59.1 million (+196.2%). Post-Brexit trade arrangements and the UK's own reduced steelmaking capacity may explain this shift.
• The United States virtually disappeared as an export market (from €25.1 million to €0.3 million, −98.8%), likely reflecting the impact of US Section 232 tariffs on steel imports.
• Several traditional markets (Serbia, North Macedonia, Egypt, Tunisia) also contracted significantly.

Within the EU, Italy, Poland, and Spain drove the import surge

Looking at which EU member states absorbed the growing imports, Italy dominated with imports rising from €380 million to €651 million (+71.3%). Poland saw the most dramatic growth (+171.5%, from €55 million to €150 million), followed by Spain (+74.0%), Bulgaria (+138.9%), and Portugal (+60.2%). These countries' construction and manufacturing sectors are the primary consumers of this product.

On the export side, France remained the largest EU exporter but saw its value decline from €67.6 million to €28.1 million (−58.5%). Romania's exports collapsed from €42.4 million to €1.6 million (−96.3%).

3. Price Volatility, the 2021 Steel Shock, and Persistent Supply Risks

The period was marked by extreme price swings, with the most dramatic event concentrated in 2021—a year that reshaped global steel markets.

The 2021 global steel price spike triggered the largest supply shocks in the dataset

The shock analysis identifies three major abnormal price events, all centred on 2021:

These shocks reflect the 2021 global steel crisis, when a post-COVID demand surge collided with constrained supply, sending prices to historic highs. EU import prices peaked at €890/t (up from €343/t at the trough), while export prices reached €810/t (from €358/t). The abnormality scores (27.5, 22.2, and 19.4 standard deviations respectively) indicate events far outside normal variation.

Several trade corridors exhibited persistently high volatility

Looking at coefficient of variation across the full period, several corridors showed elevated instability:

Most volatile import sources:

Most volatile export destinations:

The high volatility for Indonesia (1.66), Japan (1.15), and Iran (1.23) on the import side reflects the episodic nature of these suppliers—they entered and exited the EU market in fits and starts rather than maintaining steady flows. Similarly, export markets like Tunisia (1.64) and Bangladesh (1.28) were highly unstable, with sharp year-to-year swings. By contrast, Serbia (0.39 on imports) and the United Kingdom (0.37 on exports) were the most stable trade partners, consistent with geographic proximity and established commercial relationships.

Slovakia, France, and Spain are the EU's most specialised producers of this product

The specialisation analysis for 2025 reveals that production of CN 720838 is concentrated in a handful of member states with a clear comparative advantage:

Slovakia stands out with an RCA of 5.40—meaning it produces this product at more than five times the EU-average intensity relative to its overall output. France and Belgium together account for over 30% of EU production. At the other extreme, Hungary (RSCA −0.99), Estonia (−0.99), Lithuania (−0.99), and Denmark (−0.98) produce negligible quantities. This concentration suggests that the EU's capacity to sustain or grow output of this product depends critically on a small number of national steel industries.

Conclusion

The EU's market for hot-rolled steel coil (CN 720838) has undergone a structural transformation over 2015–2025. The EU has moved from a position of modest self-sufficiency to one of significant import dependence, with the net import reliance ratio rising from 17% to 26% and the trade deficit more than doubling to €1.26 billion. Domestic production declined by 23%, and export volumes fell by 70%.

Geopolitically, the market has been reshaped by the near-complete exclusion of Russian supply (a consequence of EU sanctions), the dramatic rise of Türkiye and Ukraine as primary suppliers, and the rapid emergence of Vietnam as a new source. On the export side, the UK has become the dominant destination as other markets—most notably the United States—have closed.

Price dynamics were dominated by the 2021 global steel shock, which produced the most extreme abnormal events in the entire dataset, with import prices from Brazil more than doubling in a single year. Several trade corridors continue to exhibit high volatility, suggesting that the EU's supply diversification—while necessary—has introduced new sources of instability.

Looking ahead, the EU's growing reliance on imports from a geographically diverse but sometimes volatile set of suppliers, combined with the ongoing contraction of its own production base and export capacity, points to a period of continued strategic vulnerability in this critical industrial input.