Potential EU HDG import registration raises stakes

European steel association Eurofer's request for registration of hot-dipped galvanised (HDG) imports from Turkey and Russia is a source of concern to buyers and traders, especially those that did not manage to custom-clear their orders in the October-December quota.

Both countries do not have country-specific quotas for HDG in Europe, so they import under the ‘other countries' allocation for 4A and 4B HDG. The 4A quota exhausted on 23 October, around three weeks after resetting, at a volume of 439,629t. The 4B quota still has 14,164t available out of 103,638t for the quarter.

The rate of exhaustion was actually slower than market participants had expected, with most previously saying it would only take a day or two for the quotas to fill. This meant some buyers held off from either buying or custom-clearing some of their orders. Most expect January quotas to exhaust within days of resetting, and this has now stalled trading for importers such as Turkey and Russia, although it appeared there was healthy demand for early January deliveries.

But port congestion in Italy has been causing delays, with some market participants reporting that it was taking double the time for their material to clear due to lengthy queues. In Ravenna alone, some suggest there is 400,000t of steel at the quayside. Logistics and high inventories are also a big problem at other key ports, including Antwerp. The slower than expected exhaustion rate of the quotas over this quarter, coupled with congestion — and the expectation the outcome of the anti-dumping investigation would be announced in mid-January — all suggests there could be more HDG coming to Europe for clearance at the start of January, and it might take longer for the material to actually be custom-cleared.

The news last week that Eurofer has requested the EC to register imports from Turkey and Russia, which allows for retroactive duties in the event that a definitive anti-dumping duty is applied, is raising questions among buyers. Material that was bought at the end of the summer, but was not cleared with the October quota and instead is expected to enter the bloc in January, could eventually face a retroactive duty, should the EU decide to impose one.

Market participants report that material has been stockpiled at ports ahead of January, despite the risk there could be an anti-dumping duty applicable. But that risk has been factored into cost calculations, whereas this has not been the case for orders originally intended to be cleared in October.

By Lora Stoyanova