EU considers emergency restrictions on steel imports

  • Market: Metals
  • 01/05/20

The EU is considering imposing emergency restrictions on imports of steel products.

The ban, using article 21 of the General Agreement on Tariffs and Trade (GATT), will possibly take place after the end of the current import safeguard quota that is currently being reviewed by the European Commission. The current safeguard period ends at the end of this second quarter.

The commission has also confirmed the impact of Covid-19 will now be in the scope of its safeguard review. This means a reduction in import quotas is almost certain, although not as much as the 75pc cut requested by European steel association Eurofer.

The commission has given interested parties until just 7 May to file comments on the inclusion of the coronavirus' impact in its review.

Article 21 of GATT states that no Word Trade Organisation member will be prevented from "taking any action which it considers necessary for the protection of its essential security interests". The EU can take action provided it is necessary to protect an "essential security interest" and is taken in time of an "emergency".

Emergency import restrictions brought on the impact Covid-19 could be the event needed by steel mills to stem the fall in prices, particularly of flat products.


Sharelinkedin-sharetwitter-sharefacebook-shareemail-share

Related news posts

Argus illuminates the markets by putting a lens on the areas that matter most to you. The market news and commentary we publish reveals vital insights that enable you to make stronger, well-informed decisions. Explore a selection of news stories related to this one.

News
20/06/24

Liberty’s Dalzell plate mill suspends offers

Liberty’s Dalzell plate mill suspends offers

London, 20 June (Argus) — UK-based Liberty Steel has suspended offers for plate from its Dalzell mill in Scotland, market participants said today. The mill has been grappling with low margins, while the wider Liberty group has also been struggling, mothballing some mills and looking to sell others. "[Dalzell] is unable to purchase slabs at a competitive enough rate to allow them to continue operations," one source said. A source close to the company said the mill continues to produce and fulfil its order commitments. But several participants said it had suspended offers, suggesting it may not be taking new orders for fresh rollings. A Liberty Steel spokesperson declined to comment. Sluggish demand and high input costs have been weighing on plate re-rollers' profit margins across the European mainland as some Italian and northern European mills are reportedly producing around break-even levels . Competitive imports from Asia have also played a role in driving European offers down. Into the UK, Korean S275 plate was heard at £620-630/t ($785-798/t) cfr this week. "[These are] frightening prices. Not surprised that Liberty cannot compete at these levels," one participant commented. Liberty recently said it would enter creditor protection in the Czech Republic , and announced it would close the coke ovens at its Hungarian operation. It said in May it would look to sell or recapitalise its EU rolling lines . By Carlo Da Cas Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Find out more
News

EU proposed lithium toxic classification concerns ILiA


20/06/24
News
20/06/24

EU proposed lithium toxic classification concerns ILiA

London, 20 June (Argus) — The International Lithium Association (ILiA) has said it is "gravely concerned" about proposals made by the European Chemicals Agency (ECHA) regarding the potential classification of lithium products as toxic. ILiA has lobbied against the proposals privately for two years, but has now made its concerns public to ensure awareness of a potential problem for the development of a European lithium industry. ECHA's proposals would classify lithium carbonate, hydroxide and chloride as Toxic for Reproduction, Category 1a. Any resulting impact on the market could take up to two years to appear, leading to uncertainty for the nascent battery industry, ILiA told Argus . "In Europe, an incorrect classification which is too high would risk making EU member states less attractive compared to other countries for lithium mining and refining projects," an ILiA representative wrote in an article for the organisation's membership newsletter. "Opening a lithium mine, a lithium refinery or a battery production plant in the EU would be more burdensome, with additional safety measures and uncertainties on permitting." EU regulation is sometimes seen as the benchmark standard for the rest of the world, which means classification could impact other countries. But some countries disagree with the ECHA proposals, highlighted by a series of assessments and letters from Chile, Argentina, Australia, Canada and the UK, which ILiA provided to ECHA. "These opinions demonstrate that there is no global scientific agreement on the classification and that other countries might reach different conclusions… with possible repercussions on trade relations and access to lithium in Europe," an ILiA representative said. ILiA highlighted that some lithium projects in Europe have already been shelved for other reasons, with the US Inflation Reduction Act attracting investment away from the region and public protests halting lithium mines, as happened to UK-Australian firm Rio Tinto's Jadar project in Serbia. Having the capacity to refine lithium is "crucial" for recycling lithium and providing the materials needed to grow the European battery industry, ILiA said. By Thomas Kavanagh Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

News

India approves funding for offshore wind projects


20/06/24
News
20/06/24

India approves funding for offshore wind projects

Mumbai, 20 June (Argus) — India's federal government cabinet has approved viability gap funding (VGF) for the installation and commissioning of 1GW of offshore wind projects in Gujarat and Tamil Nadu states. India's plans for offshore wind energy will increase short-term demand for rare earth permanent magnets and minor metals such as chromium, cobalt, manganese and molybdenum. The cabinet on 19 June approved VGF of 68.53bn rupees ($820mn) for installation and commissioning of 500MW of offshore wind projects each off the coast of northwest India's Gujarat and southeast India's Tamil Nadu. It also approved a Rs6bn grant for upgrading two ports to meet the logistics requirements for developing the projects. The VGF scheme aims to support infrastructure projects that are economically justified but fall marginally short of financial viability. The funding support from the government reduces the cost of power from offshore wind projects and make them viable for purchase by electricity distribution companies. India's Ministry of New and Renewable Energy expects the commissioning of the 1GW wind projects to promote development of the offshore industry. It is targeting an initial 37GW of offshore wind power generation capacity with investment of about Rs4.5 trillion. Initial assessments by India's National Institute of Wind Energy for potential offshore zones for wind energy projects indicate the potential of 36GW of wind energy projects off Gujarat and about 35GW offshore Tamil Nadu. By Samil Surendran Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

News

Australia’s MinRes to close Yilgarn iron ore hub


20/06/24
News
20/06/24

Australia’s MinRes to close Yilgarn iron ore hub

Sydney, 20 June (Argus) — West Australian (WA) iron ore mining firm Mineral Resources (MinRes) will stop shipping from its lower grade Yilgarn operations by 31 December and transfer staff to its Onslow project in the Pilbara. The 8mn t/yr Yilgarn in the Mid West region of WA is not financially viable beyond the end of 2024, according to MinRes. The mine operated at a delivered cost of A$139/wet metric tonne (wmt) ($93/wmt) and received revenue of A$164/wmt during July-December 2023 . The Argus ICX 62pc Fe iron ore price averaged $117.45/dry metric tonne (dmt) cfr Qingdao January-June this year compared with $121.47/dmt for July-December 2023. It was last assessed at $107.10/dmt on 19 June. As prices have fallen for MinRes, costs are also rising, particularly at the ageing Yilgarn operations, which it bought six years ago after its previous owners US firm Cleveland Cliffs closed it in 2018. The WA government helped MinRes to restart the Koolyanobbing mine as the foundation of the Yilgarn operations in early 2019 . The Argus ICX price was $72.80/dmt cfr Qingdao on 31 December 2018 and rose to a peak of over $200/dmt in mid-2021 before easing to its current levels. MinRes will move staff and equipment from Yilgarn to its new 35mn t/yr Onslow, which shipped its first ore to Chinese producer Baowu Steel in May . By Jo Clarke Iron ore prices ($/dmt) Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

News

Buyers, ex-EU mills discussing HRC quota management


19/06/24
News
19/06/24

Buyers, ex-EU mills discussing HRC quota management

London, 19 June (Argus) — Buyers and exporters to the EU are trying to reduce the risk of purchasing "other countries" hot-rolled coil (HRC) under the 15pc single country quota cap. They are discussing adding duty-sharing clauses to contracts, and commitments from sellers to not exceed their quotas. Mills from the same countries, in the meantime, are deciding whether it would benefit them to allocate the quarterly quota between themselves, in a similar way to South Korean producers, or adopt India's approach, where each seller has tried to maximise its market share. Participants are preparing for a turbulent lead-up to and start of July, and trying to estimate how much duty will be payable on imports mainly from Japan and Vietnam, but also Egypt and Taiwan. Sources expect that October arrivals could also be above quota allocations. In order for purchasing to resume, amid all the uncertainty, buyers are demanding that sellers provide some guarantees that they would not sell excessively in the EU. But feedback from mills has so far been mixed — Vietnamese sellers have said they cannot be held responsible if exports to the EU are higher than the roughly 142,000 t/quarter allowed duty-free, and they were not willing to share duties with buyers, according to participants. Some buyers said they have enquired with Egypt about committing their full quota to them with a firm bid. But controlling Egypt's quota may be more complicated, as often the mill sells on a fob basis to traders, which may in turn sell to Europe or not, market participants said. Some sources said the producer is allocating volumes per buyer depending on the relationship and historical tonnages purchased. Co-operation between Taiwanese mills could be more straightforward, as export certificates are issued by the Taiwanese steel association, according to a seller, in which case volumes can be tracked and monitored more easily. One source said mills will look to sell higher grades and specialties in lieu of commodity HRC to compensate for the reduction in volume to the EU, but maximise the revenue generated. In Japan, mills have been discussing sharing the allocation between themselves, but each seller is reportedly pushing for a larger portion of the quota, even those that have sold very low historical amounts to the EU previously, placing the most active mill under further pressure. There have been suggestions that Japan could try to ramp up its exports of other products to compensate for the loss in HRC — it is often already the lowest-priced supplier of cold-rolled coil (CRC). Buyers and traders are continuing to urge the EU to allow for a grace period in the meantime, so that the material due to be cleared on 1 July is subject to the old regulations. But it appears that the European Commission, which has not yet officially confirmed that the safeguards have been passed as proposed, is not going to take those requests into account. Sources in Brussels suggest that no grace period has been included in the regulation. By Lora Stoyanova Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Generic Hero Banner

Business intelligence reports

Get concise, trustworthy and unbiased analysis of the latest trends and developments in oil and energy markets. These reports are specially created for decision makers who don’t have time to track markets day-by-day, minute-by-minute.

Learn more