EU AD probe of hot roll sparks reactions

The EU’s initiation of an anti-dumping investigation on imports of hot-rolled flat steel from Egypt, India, Japan, and Vietnam has stirred significant reactions across various regions, Kallanish notes from market participants.An EU-based source cautioned, “No one shall buy for delivery after 25 March. As it is risky, in case they shall go retroactive… No one shall buy from these countries, hoping prices shall increase.”

“The impact will be significant,” a EU-based trader opines. “Currently, sentiment is negative, and confidence is low, … and customers are only partially understanding the potential impact,” the same EU trader said. “The domestic industry will obviously benefit from this and expects a significant increase in activity upon reopening in September … Turkey will likely exhaust its quota very quickly. End users will suffer because expensive domestic material will become the primary source, making it challenging to compete when exporting finished goods. Traders are losing money, … and will likely decrease in numbers. … Chinese traders are expected to dominate the sector.”

Another EU-based trader suggested that Taiwan and Saudi Arabia, which are not facing anti-dumping measures, may see some advantage. Turkey’s AD is manageable, therefore he also agreed that Turkey may gain. Meanwhile, considering the recent volatility in China, its prices even with duties could be workable.

“I would not be surprised if we see some Chinese coils coming to Europe and paying the AD duty,” the same trader notes.

In Japan and Egypt, sentiment was pessimistic.

“It will be a big challenge to EZZ Steel,” an Egyptian source suggested.

A Japanese trader noted, “15% cap damaged us a lot already and then AD investigation started. It is very negative. We don’t think Japan will book new orders for a while.”

A Vietnamese mill source commented that, “There is a quota limit so anti-dumping is meaningless, we still cannot sell… Vietnamese exports of HRC are limited to 141,950t per quarter between two mills.” In July Vietnam launched an anti-dumping investigation into HRC from China and India.

Indian steelmakers had a mixed reaction. Sources say the EU is unlikely to buy from India during this investigation, and they expect a duty to be levied.

If the duty rate is within a manageable range, Indian mills can try to take orders at lower prices. But, if the duty is high, then the market will be lost for India for some time, a source says.

Another source says, “India is not a very big player. I guess, Indian HRC would still find a way into the EU because EU mills’ cost structure is very high, and if alternatives are cheaper, then [EU should have] no issue. However, yes it will be a setback for margins, hence exports would be strictly need based.”

Several Indian steelmakers meanwhile noted this will spur focus on the domestic steel market. One source said, “Be Indian, buy Indian, sell Indian.”

An Indian mill source added, “India is not export-oriented at the moment. And I expect no major change in the situation in the coming years. India may also initiate an investigation. This means 3-4 million tonnes less supply in the market.”

In July, India’s steel ministry called on the trade ministry to probe Vietnamese and Chinese steel. This could help offset India’s absence from European markets.

Anna Low Singapore , Elina Virchenko UAE , Suhita Poddar India