Traders hope for clarity over EU safeguards by May

A combination of weak demand, uncompetitive offers and tariff uncertainty has left traders across Europe in a difficult position, with some unwilling to restart business until the European Commission has outlined whether it will introduce a quota.

While import offers have remained largely uncompetitive for months, the threat of duties being applied to future bookings is causing consternation, with traders in the UK in particular claiming to be dissuaded from booking before an anticipated clarification in May.

“It’s brought everything to a standstill,” a trader said noting the announcement by the EC that a quota system could be introduced in response to the Section 232 order in the US had meant “trading from outside the EU has become impossible.”

“There are two problems, one is where do we buy our steel from forward, and the second problem is boats already on the water,” a trader said.

A stockholder in the UK said a trader had cancelled a shipment from India that had already been loaded, but the trader doubted this. “If someone’s bought a 5,000 mt cargo and wants to cancel, I don’t see how you can really. It’s created an impossible situation really,” he said.

In an open letter, the International Steel Trade Association (ISTA) noted the European Commission said provisional measures on imports could be taken between one and five months of the start of the investigation, which was launched March 26. “These measures could be provisional duties or tariff free quotas, either of which would be devastating. Either importers will have to pay duties which were not previously budgeted for, or it is possible that shipments may be turned away if tariff free quotas are put in place which are subsequently filled prior to the arrival of pre-purchased goods,” ISTA chairwoman Simone Jordan said.

Traders on the continent were less nervous, as a buyer in Iberia saying he thought it unlikely that the EC would apply tariffs to orders already made. Similarly a trader in northern Europe said they were continuing to book where it was economically viable.

The Iberian trader said other issues were more important. “The consumption went down a bit in Iberia, with this slow down both end users and SSCs have slightly higher stocks than usual, meaning people are not under pressure to buy,” he said.

Peter Brennan, PLATTS