EC opens dumping probe of HDG steel from Turkey, Russia

The European Commission announced June 24 it has opened an investigation into hot-dip galvanized coil imports from Turkey and Russia, alleging imports of certain corrosion-resistant steels originating from these countries were being dumped.

The allegation is based on a comparison of the domestic price with the export price on an ex-works basis of the product under investigation when sold to customers in the EU, according to the EC statement.

The probe will cover the period from Jan. 1, 2020 to Dec. 31, 2020 and determine whether the product under investigation is being dumped and if the dumped imports have caused injury to the EU industry. In addition, the EC said the examination of trends relevant for the assessment of injury will cover the period from Jan. 1 2017 to the end of the investigation period.

Discussions amongst market participants on a possible investigation of HDG imports on Turkey that could lead to anti-dumping duties have been circulating since February, with some sources saying producers had already received notification from the EC. Expectations of the investigation are thought to have been a contributory factor in the recent rise in prices, and some market sources believe confirmation of the trade case may further support prices.

“It would be supportive for the European market but of course we don’t know yet what the outcome will be,” one European mill source told S&P Global Platts. “There have been aggressive import offers in the past.”

EU price surge

Platts assessed HDG prices EXW Ruhr and Italy at Eur1,315/mt ($1,569/mt) June 24. Prices have risen 154% from a low of Eur515/mt on July 1, 2020, as demand increased on the back of COVID-19 related stimulus while supplies remained tight.

Russian steelmakers contacted by Platts June 24 did not immediately comment on the EC’s formal announcement.

However, Turkish steelmakers said June 24 they had expected the investigation.

“It’s not a surprise to us, as the rumors about the investigation have already started to restrict our export volumes in recent weeks, by creating concerns among European buyers,” one Turkish coated coil producer told Platts. “We raised our exports to the EU notably last year, amid material tightness in the region, which also supported our prices. So, we don’t think that EC could find any dumping in our prices. However, it is obvious that this investigation will seriously harm our export volumes, as European buyers will be cautious about a possible AD duty.”

Another coated coil producer questioned the period chosen for the investigation, as this was when the EU was demanding more imports due to regional product tightness resulting from COVID-19 mill curtailments. “They have determined 2020 as the investigation period, as it could affect the result of the investigation. Turkish mills exports to the EU rose notably on year last year,” the producer located in Turkey said.

Veysel Yayan, general secretary of the Turkish Steel Producers’ Association, called for counter measures to be taken by Turkey “immediately,” and accused the EU of being “inconsistent and unfair.”

Drop in Turkish domestic prices expected

The start of the EC probe is expected to push down galvanized steel prices in the Turkish domestic market.

A Turkish service center manager noted: “This decision will put further pressure on Turkish galvanized coil producers’ prices, as demand from the domestic market has slowed down notably in recent days. Declining imported HRC costs could also pull down mills’ quotations. We have witnessed around $50/mt decline in domestic mills’ HDG offer prices since last week.”

A manager from a coated coil producer located in Turkey noted June 23 that mills’ 0.50 mm thick HDG offers were in the range of $1,340-$1,360/mt ex-works. “We are offering the same grade HDG at $1,370/mt ex-works minimum,” the manager said.

Most Turkish mills’ 0.50 mm thick HDG offer prices to the domestic market were around $1,400/mt ex-works and above at the beginning of last week, Platts observed.

According to trade data published by European steel federation Eurofer, 315,378 mt of Turkish origin and 114,559 mt of Russian origin HDG coils were imported into the EU during the first three months of 2021 out of a total of 1.17 million mt of HDG imports in the period.

Spain and Italy were the main buyers of Turkish material during this period. Belgium and Latvia have been the main buyers of Russian material this year.

— Cenk Can, Laura Varriale and Diana Kinch