Duty-free rebar import quotas in EU from Russia, Ukraine drop to critical levels

Duty-free quotas for rebar shipments into the EU from Russia and Ukraine are getting close to critical levels, according to data published by the European Commission on its website.

However, the remaining quota levels — mainly for rebar — together with extended mill stoppages over the holiday period and a rebound in apparent consumption could help European steel producers achieve higher asking prices for the first quarter, market, sources said.

European mills are currently offering rebar at around Eur495-Eur500/mt delivered, and pushing for further increases, after European monthly ferrous scrap settlements rose for the second consecutive month in January. The spread between Platts TSI Northwest Europe Rebar EXW assessment and Platts Northern European shredded ferrous scrap assessment was at Eur215/mt on January 10, up marginally from Eur210/mt on December 6.

According to the latest data, there is only 5,885 mt remaining in rebar quotas for delivery from Russia, with 8,596 mt from Ukraine. At the beginning of the current period on July 1, Russia had an original allocation of 241,998 mt of rebar and Ukraine had 160,848 mt.

CIS rebar exports into the EU only started to ramp up since the end of October, after Turkey finished its 301,537 mt of free quotas as of October 11.

On October 1, the European Commission retroactively reduced the planned increase in tariff-free steel quotas to 3%, down from 5% across all product categories for the annual quota period July 2019-June 2020.

Once Russia and Ukraine exhaust their quotas, the only option for rebar importers will be to buy rebar from Bosnia — which at present has about 65,471 mt remaining of its original July allocation of 101,229 mt — and Moldova — with 26,689 mt remaining of its original 72,752 mt total allocation.

Turkey’s wire rod quota has also reached a critical level, with just 13,557 mt remaining out of a total of 312,081 mt for the rest of the period. For rod, there are still lots of other quotas open, although Russian quotas have halved to 139,908 mt from 316,074 mt at the beginning of the period.

For both rebar and wire rod, the other countries’ quota will be renewed for the April-June quarter on April 1, when Turkey is able to sell its products again, although it will be limited to 30% of its quota.

— Annalisa Villa, Viral Shah