<article><p class="lead">Low priced steel offers to the US from Europe are unlikely to lead to increased volumes as a quota agreement limits the continent's ability to sell significant volumes of steel<b></b>into the US, market sources say.</p><p>This week one US service center reported being offered French HRC (hot rolled coil) into Houston at $1,100/short ton (st) ($1,213/metric tonne) ddp<b>.</b> A Midwest service center reported paying $1,060/st ddp for HRC from an EU mill into Burns Harbor, Indiana. Section 232 tariffed prices to the US are between $1,300 and $1,500 ddp Houston.</p><p>Under an agreement between the US and the EU to lift US Section 232 25pc steel tariffs in exchange for quotas that went into effect on 1 January, France has an HRC quota of 4,721t for the second quarter that runs through 30 June, according to the US Department of Commerce.</p><p>The low prices have been dismissed by some market participants, who say they are likely to have little impact on the US market because of lack of potential volumes.<b></b>Europe's total nontariffed export quota for all products to the US is 3.3mn t for 2022<b>,</b> split among its member states and among 54 products. </p><p>EU's second quarter quota for exports of HRC to the US is just 65,166t, of which nearly half is for the Netherlands and 10,070t for Germany. </p><p>The quota for exports of cold rolled coil (CRC) from Europe is 57,024t, while the hot dipped galvanized (HDG) coil quota is 41,135t.</p><p>US prices have also come under pressure in recent weeks as raw material constraints appear to have been overblown. </p><p>The <i>Argus</i> US Midwest and southern HRC assessments were down by 5.2pc to $1,421.50/st on 10 May since hitting a high of $1,500/st in April. </p><p>European prices have also been under significant pressure as the automotive industry there is dealing with parts shortages, cutting into steel demand. </p><p>The <i>Argus</i> HRC ex-works Northwest Europe assessment has declined by 22pc since hitting a peak of $1,409/st in late-March and is down to $1,099/st on 10 May.</p><p>Countries can export steel volumes above the quota limits, but they would be subject to the 25pc tariff. </p><p>In 2021, US imports of HRC totaled 3.4mnt, with CRC imports at 1.71mn t and HDG imports at 2.69mn t.</p><p class="bylines">By Rye Druzin</p></article>
