The Melt & Pour Paradox

Is Europe inadvertently incentivising a clever (yet harmful) workaround?

By Christophe Lagrange

In recent years, ‘Melt & Pour’ has increasingly been promoted as a means of strengthening European industrial autonomy, reducing dependence on foreign steelmaking and reinforcing the effectiveness of the Union’s trade-defence instruments.

But what if it achieves exactly the opposite?

According to Eurostat, the European Union imported more than 500,000 tonnes of stainless-steel slabs and primary feedstock during 2025. Around 350,000 tonnes originated from Indonesia alone. These are not finished products. They are semi-finished inputs used exclusively by European steel mills and subsequently transformed within the Union.

The first observation is simple: Europe is heavily dependent on foreign melt. And not marginally so. The transport cost of moving slabs halfway around the globe is not an obstacle. Over half a million tonnes imported in a single year prove that the economics work.

The widely advocated melt & pour regime is built on the idea that the location where steel is melted should carry greater legal significance than the location where subsequent processing takes place.

This is where things become interesting.

Imagine a slab produced in Europe. That slab could be exported to Asia, transformed into flat products, tubes, bars, or any other stainless-steel products and subsequently shipped back to Europe. Under a melt & pour approach, the decisive production step would still have taken place in Europe. This means:

• No quota restrictions;
• No 50% out-of-quota tariff;
• No concerns about quota exhaustion;
• No waiting time in bonded warehouses until the opening of a next quota quarter;
• Very limited CBAM exposure: the emissions associated with melting and casting having occurred in Europe, only the subsequent transformation operations would remain CBAM-relevant.

At the same time, imported slabs would continue entering Europe.

• No quota restrictions apply to slabs;
• No 50% tariff applies to slabs;
• CBAM applies, but imported slabs are purchased from primary steel producers, who are generally able to declare actual emissions rather than relying on default values.

In other words, the system creates a curious asymmetry. Foreign slabs can enter Europe. European slabs can leave Europe. Both movements remain economically attractive.

So why would anyone choose to process European steel outside Europe? Simple: steel producers no longer think in national terms. Nor, increasingly, in European terms. They think globally.

For a large steel group with production facilities spread across several continents, the question is not whether processing takes place in Europe or elsewhere. The question is where the next tonne can be produced most efficiently. Energy costs. Labour costs. Environmental compliance. Social charges. Proximity to suppliers. Proximity to growing markets.

Europe is a mature market. Southeast Asia and India remain growth markets.

If two products ultimately enjoy the same access to the European market because both retain an EU melt & pour status, the location of processing becomes an economic decision rather than a regulatory one. And global companies are remarkably good at making such decisions.

This is not a theoretical scenario.

Over 500,000 tonnes of slabs imported into the Union during 2025 demonstrate that steel producers are already perfectly willing to move semi-finished products across continents whenever the economics justify doing so.

If such volumes are already moving despite the environmental cost of intercontinental transport, it is difficult to believe that economic operators would ignore opportunities to avoid a 50% tariff, materially reduce their CBAM exposure, and at the same time benefit from lower energy costs, lower labour costs and less burdensome regulatory environments elsewhere. These are precisely the kind of incentives capable of reshaping investment decisions and global supply chains.

The paradox is difficult to ignore. Above all, it raises a very uncomfortable question.

European steel policy is increasingly shaped around the dual objective of preserving upstream steelmaking capacity in the EU and encouraging its decarbonisation.

Is Europe designing a system that strengthens European industry and contributes to reducing global CO₂ emissions?

Or is the EU creating a system that encourages global steel groups to optimise their supply chains in new ways, shifting industrial activity, investment, and emissions beyond the Union’s borders, while the implications for the downstream segments of the European steel value chain remain largely unexplored?

It certainly warrants consideration…

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