EU steel importers are reporting customs clearance delays under the new quota system, which came into force on 1 July, prompting some buyers to review their plans to clear imported material through customs.
While the general framework of the new quota system, including a 47% reduction in total steel quotas and an increase in safeguard duties to 50%, had been released in advance, the details regarding the country-specific and residual quotas were published only one day before the regulation came into force – on 30 June. The lack of clarity paralyzed trading activity in the European coil market in June, as buyers were unable to plan their purchases from both overseas and domestic suppliers.
Multiple market sources said that customs authorities across the EU were not prepared to handle imports under the new regulations, given the last-minute announcement by the European Commission. As a result, customs may need at least two weeks to determine which quotas have been exhausted and which importers will have to pay the duties.
The lack of certainty, lower-than-expected country-specific quotas, and high volumes of imported material already at ports have prompted some buyers to review their customs clearance plans. Some sources said they had decided to delay the customs clearance of hot-rolled coil (HRC) imported from Turkey due to the risk of exceeding the quota.
“Currently the new quotas are blocked for two weeks, and nobody knows anything,” a German distributor said.
“Customs are really not prepared. Some contracts submitted for clearance at the beginning of this week have been selected for physical inspection, with the earliest date available in three weeks,” a trader said.
In addition, sources in the Benelux reported that customs authorities were requesting a deposit to cover the potential 50% duties for all material undergoing customs clearance. This requirement has added pressure on companies that may already be facing tight liquidity and cannot afford to tie up significant amounts of cash until the imports are cleared. Sources from other parts of the EU said they had not encountered similar requirements from their local authorities.
Buyers have started to show greater interest in domestic steel because they have been unable to import the volumes originally planned, a trend that is expected to support a recovery in domestic prices, sources said.
Author: Maria Tanatar
