The European Commission (EC) announced plans to impose a definitive safeguard measure on imports of silicon and manganese ferroalloys into the European Union (EU), following an 11-month-long investigation.

The EC has proposed a three-year safeguard measure running from 18 November 2025 to 17 November 2028, the maximum duration permitted under World Trade Organization (WTO) safeguard rules. The measure combines tariff-rate quotas (TRQs) with out-of-quota variable duties. Under this system, the TRQs limit the volume of each ferroalloy product that can enter the EU duty-free.

Annual duty-free quotas have been set for each product category based on average import volumes recorded from 2022 to 2024, reduced by 25% from that baseline. Imports within these quota limits will be duty-free, whilst imports that exceed the quota will be subject to a variable duty equal to the difference between the actual import price and a predefined price threshold.

Since current market prices for several ferroalloys are below their respective thresholds, a significant share of imports is expected to incur duties even before quotas are filled. The measure is intended to support EU ferroalloy producers in recovering approximately 30–40% of their domestic market share.

Domestic ferroalloy production in the EU had already begun to decline from 2019, driven by structural cost pressures, rising import competition, and the broader EU economic slowdown, which led to a sharp contraction in manufacturing output.

The combined impact of the pandemic and the subsequent energy crisis accelerated this downward trajectory. Energy accounts for over one-third of total input costs, with ferrosilicon being the most energy-intensive alloy (on a kWh/t basis) of the alloys included in the investigation.

Following the onset of the energy crisis in 2022, EU production of silicon-containing ferroalloys, such as silicomanganese and ferrosilicon, declined sharply, falling by 73% and 23% between 2021 and 2023, respectively.

At the same time, the EU faced intensifying competition from lower-cost producers such as Norway and India. Even at full utilisation, existing EU production capacity can meet only 35–40% of domestic ferrosilicon demand. As a result, imports account for up to 80% of consumption across member states, with Norway and Iceland together supplying around 45% of total EU ferrosilicon imports.

Norway’s advantage is predominantly energy-based: domestic electricity prices have historically been around 50% lower than the EU27 average, with the differential widening to nearly 70% during the energy crisis.

This enabled Norwegian producers to maintain high furnace utilisation while EU smelters curtailed output. India’s competitiveness stems from its lower industrial electricity costs, which typically ranged from US$0.07/kWh to US$0.12/kWh during the 2015–2025 period. Meanwhile, the depreciation of the Indian rupee against the euro has increased European purchasing power, making Indian ferroalloys significantly cheaper in euro terms.

A depressed steel market following the global manufacturing downturn in 2019 has compounded these pressures. Weak steel consumption, combined with high capital costs associated with further modernisation of production to comply with stricter EU CO2 emission standards, has changed the demand profile for alloys in the EU.

Local steelmakers have increasingly preferred imported silicomanganese over ferrosilicon, the price of which skyrocketed during the 2022 energy crisis and declined more slowly than silicomanganese in subsequent years.

In the coming months, European ferrosilicon prices are expected to rise, although the seasonal slowdown in trading activity will likely limit any significant increases.

In the medium term, the newly implemented restrictions will provide underlying support to prices by tightening the balance between domestic output and import supply. There is also a possibility that some furnaces in Norway and Iceland will shift from ferrosilicon to silicon metal production, particularly if similar restrictions are not applied to silicon metal imports into the EU. These potential furnace conversions could further constrain ferrosilicon availability and reinforce upward price pressure.

While the safeguard measures will provide short-term protection to EU ferroalloy producers, their effectiveness in the medium to long term will ultimately depend on a sustained reduction in electricity prices. Without a structural improvement in energy affordability, domestic producers will continue to face competitiveness challenges once the current restrictions expire.

Norway’s position under the European Economic Area (EEA) framework remains significant, especially since it has historically provided a considerable share of the EU’s ferrosilicon demand. However, all ferrosilicon imports, including those originating in Norway, are now subject to the new safeguard measures.

For silicomanganese, potential supply gaps may be partially offset by suppliers in developing countries such as Malaysia and Brazil. Both are listed under the product-specific application of the measures and may be able to reroute material into the EU market, depending on quota allocation and price dynamics.