EU proposes lower HRC import quota: Update

Adding details about other products

The European Commission has surprised market participants by maintaining a global quota for hot-rolled coil in its safeguard review.

The commission said the share for any exporting country in any given quarter will be capped at 30pc of the total. The volume for 1 July 2019 to 30 June 2020 will be lowered marginally to 8.47mn t from 8.64mn t previously, and the measure will come into force on 1 October this year after approval by EU member states.

The commission factored in more recent imports in its safeguard review, and has reduced its relaxation for all products from 5pc to 3pc across all product categories, noting last year was a record for shipments to the EU. The commission also said Turkey, India and Serbia have been replacing HRC imports from countries with anti-dumping and countervailing duties, and that Russia has recovered a "substantial part of its historical trading volume" despite the duties in place.

The 3pc means quotas for the remaining period from 1 October 2019 will be revised down to ensure the total increase in the allowance is 3pc over the year.

The commission is also proposing to amend the hot-dip galvanised products quotas, falling under CN codes 4A and 4B, so that imports into the 4B quota can demonstrate an end-use in the automotive sector. In addition, India will be granted a country-specific quota for 4A, as it does not export significant volumes of auto grade galvanised steel.

The commission's investigation has also found that for some product groups – namely rebar and wire rod – countries with country-based quotas were able to "crowd out" traditional import flows from other origins in the last quarter of the period, to which all importers get access. As a result, it is suggesting that a 30pc cap per supplying country is introduced in the last quarter of each period.

This would guarantee a sufficient amount of supply sources, the commission said. The move will affect Turkish and Russian mills mainly, which exhausted their country-based quotas quickly and would then rush to export in order to get a larger share of the "other countries" quota once they were opened to them.