The global stainless steel market navigated a series of sharp sentiment. The opening weeks saw Indonesia's mill closures and price hikes push the cost narrative to its highest point of the year, before a combination of easing geopolitical tensions triggered the first price reduction since December 2025. The month's defining characteristic was similar to April's. What differentiated May was the sharply higher amplitude of both the policy signals and the emotional swings that accompanied them.

The South Korean government, through its Ministry of Trade, Industry and Energy (MOTIE), has officially requested the European Commission to ensure fair treatment and preserve historical tariff-rate quota (TRQ) volumes for Korean steelmakers under the EU's newly adopted steel trade protection framework set to take effect on July 1, 2026. The revised EU system mandates a severe 47% reduction in global tariff-free import quotas to an annual ceiling of 18.3 million metric tons (mt), alongside doubling the punitive duty to 50% for any volumes exceeding specified limits. South Korea emphasized that its steelmakers, who heavily supply the European automotive and consumer appliance supply chains with high-end flat products, should not be unfairly penalized by anti-circumvention measures designed to target global overcapacity actors. The market impact indicates an escalating diplomatic and trade policy friction surrounding the EU's highly restrictive single market barriers.

Italy's steel market faces persistent downstream weakness, but the EU's new safeguard measures taking effect July 1, featuring significantly tighter import quotas and doubled out-of-quota duties, compounded by CBAM and antidumping constraints, are expected to sharply curtail non-EU procurement options, strengthen EU mills' bargaining power, and drive a price rebound during summer as inventories draw down. In the stainless steel segment, service center volumes collapsed 15–20% MoM in May as artificial price supports faded, with Assofermet seeing no near-term recovery signals.

The Council of the European Union has formally adopted a revised tariff-rate quota (TRQ) system set to enter into force on July 1, 2026, immediately after the current safeguard expires on June 30. The new regulation aims to reduce steel import quotas, apply higher duties to imports exceeding quota volumes, and introduce a strict "melt and pour" requirement to ensure traceability. This framework provides greater flexibility by allowing unused quotas to roll over within the same year but firmly limits non-EU influxes and Russian steel dependence. By strengthening import surveillance, these measures provide structural insulation for European domestic mills, allowing them to defend local pricing despite challenging market conditions.

The EU has formally adopted a new steel trade framework to replace the current safeguard system expiring July 1, 2026. Tariff-free import quotas are cut by ~47% to approximately 18.3 million tonnes per year, with above-quota tariffs doubled to 50%. A new "melt and pour" traceability rule is introduced to prevent circumvention. Industry groups welcomed the move but continue to call for lower energy costs and stronger industrial policy support.

The EU's Directorate-General for Trade plans to publish country-specific steel import quotas only in the final week of June, just few days before the safeguard successor measure takes effect on July 1, 2026. The new framework imposes 50% tariffs and reduces import quotas by 47%, placing a significant burden on Europe's steel-processing sector. Critics argue the delayed publication undermines business planning and may conflict with Article 41 of the EU Charter on the right to good administration. Separately, the Commission has launched a consultation on Melt & Pour proof-of-origin requirements under the EU Steel Regulation, running from June 4 to July 2, 2026. The implementing act will determine documentation standards for importers proving where steel was melted, with overly burdensome requirements risking disproportionate impact on SMEs versus large integrated producers.

The UK Business Secretary is set to meet the EU Trade Commissioner in Brussels, raising concerns over the EU's plan to cut duty-free steel import quotas for non-EU countries by 47% from 2024 levels, effective July 1. The move threatens UK steel exports significantly. Meanwhile, the EU steel association has pushed back against the UK's own quota reductions, with products including hot-rolled coil, tinplate, and rebar at risk. Both sides are tightening steel trade protections in response to Chinese competition and global overcapacity, but the quota adjustments risk deepening bilateral trade friction.

【SMM Steel】India has warned it may withdraw tariff concessions granted to the UK under their free trade agreement unless concerns over Britain's new steel safeguard measures are addressed. From July 1 2026 the UK will cut duty-free steel import quotas by 60% and impose a 50% tariff on over-quota shipments. India is considering "rebalancing" measures including rolling back planned duty cuts on Scotch whisky. Despite UK Trade Secretary Peter Kyle's recent visit to New Delhi to push for the deal's implementation no firm timeline has been set. The FTA which would liberalise 99% of UK tariffs remains unsigned as the steel dispute creates a significant hurdle.

[SMM Steel] Brazil’s steel import quotas reached an average utilization rate of 60% as of May 20, up from 56% in late April, according to Siscomex data. The quota system, valid from February 24 to June 23, allows 445,469 mt of finished steel imports at regular tariff rates. Utilization rates reached 77% for Galvalume, 72% for zinc-coated steel, and 54% for CRC, while HRC quota usage remained relatively low at 18%. Imports exceeding quota volumes are subject to a 25% tariff. Market participants said Brazilian steelmakers continue pushing for stronger trade protection measures against imported steel.

[Price Review] Silver fell sharply at the beginning of this week, mainly due to repeated Middle East geopolitical tensions with slow progress in US-Iran negotiations, critically low global crude oil inventories driving oil prices higher, combined with rising interest rate hike expectations and rising US Treasury yields, which continued to weigh on precious metals valuations. On Wednesday evening, as US-Iran tensions eased somewhat, oil prices declined while medium- and long-term US Treasury yields both pulled back, and precious metals futures rebounded slightly. On the macro front, new Fed Chairman Waller delivered his first public speech maintaining a hawkish stance. Combined with US April non-farm payrolls and CPI both exceeding expectations, interest rate hike expectations continued to rise, with expectations for rate cuts within the year nearly zeroed out. CME Fed Watch showed a 97.3% probability of the US Fed holding rates unchanged in June and a 2.7% probability of a rate cut; a 72.7% probability of rates remaining unchanged from current levels in September, a 2% probability of a rate cut, and a 25.4% probability of a rate hike. Industrial demand side, at the beginning of the week, downstream consumption recovered slightly as silver prices declined, but demand quickly faded as prices rebounded. Some suppliers also showed weak willingness to offer due to continuously widening transaction discounts, with the price spread between high and low offers widening. The silver spot market remained generally low in activity, and inventory continued to increase slightly. Gold/silver ratio, as of May 20, the LBMA gold/silver ratio rebounded to 59x, widening notably WoW. [Key Data] Bearish New Fed Chairman Waller delivered his first speech on May 15 with an extremely hawkish tone, explicitly stating there was no reason for rate cuts in the near term and not ruling out the possibility of resuming rate hikes. April CPI came in at 3.8% YoY (the highest since May 2023), core CPI at 2.8% (the highest since September 2025), and PPI at 6.0% YoY (the largest single-month increase in over four years), with inflation stickiness exceeding market expectations. The US dollar index rebounded above 105, the 10-year US Treasury yield broke through 4.5%, and the 30-year US Treasury yield reached above 5%, significantly raising the opportunity cost of holding precious metals. India raised silver import tariffs from 6% to 15% while tightening import quotas, causing demand from the world's largest physical buyer to drop sharply. Bullish: Peru's energy crisis continued, with a national state of emergency extending through year-end. Twelve large mines have implemented staggered production, and May silver production is expected to decline by 5%-8%, with the global supply-demand gap persisting. US-Iran negotiations saw new positive progress, with both sides engaging in indirect contact through Qatar and reaching preliminary consensus on some core disagreements. [Upcoming Focus] May 22: Waller's inauguration speech; Eurozone and UK May manufacturing PMI preliminary readings May 23: US May Markit manufacturing and services PMI preliminary readings May 27: US 2026 Q1 real GDP annualized quarterly rate revised value May 28: US April core PCE price index, weekly initial jobless claims Key focus: Waller's official inauguration speech as Fed Chairman, US-Iran negotiation progress [Price Forecast] Silver is expected to remain under pressure with adjustments next week, with core variables being Waller's inauguration speech and US-Iran negotiation progress. The market is closely watching Warsh's debut and four key focus areas: the US Fed's stance on independence, inflation framework reform, interest rate path, and balance sheet reduction pace. Combined with Warsh's previous policy positions, if he insists on prioritizing anti-inflation efforts and releases expectations of retaining the rate hike option, precious metals are expected to face sustained suppression in the short term. On the China fundamentals side, downstream buying sentiment is generally cautious. The decline in silver's absolute price has not significantly boosted downstream demand, and wait-and-see sentiment remains strong. Social inventory of spot silver ingots has increased slightly, and the market expects spot mainstream transaction discounts to widen slightly to the SGE TD discount range of 50-20 yuan/kg.