EU automotive HDG quota for China dwindles

The safeguard quotas available for the import of automotive grade HDG into the EU are rapidly declining. The country-specific quota for China also appears to be almost fully filled until the end of June this year, Kallanish learns from EU official customs data.

Chinese exporters had been allocated almost 205,000 tonnes of tariff-free quotas in the period February-July. Of these, only some 28,500t remain, with over 17,000t of material awaiting to be cleared at customs in the coming days.

Once the quotas are exhausted completely, importers will have two options. The first is to pay a 25% tariff to import automotive grade HDG from China. The second is the possibility of using some of the quotas allocated under the ‘other countries’ section from the beginning of April to the end of June. These however amount to less than 77,000t.

The exhaustion of Chinese automotive HDG quotas further exacerbates a situation in which the ‘other countries’ quotas for the same product were exhausted last week until the end of March. The speed with which these quotas are being filled confirms the concerns expressed by market participants as soon as the new quotas system was announced in January this year.

For automotive grade HDG quotas are still widely available for imports from South Korea, India and Taiwan. A trader comments that the rapid usage of these quotas confirms that the system is clearly not protecting the market from the redirection of imports into the EU, but creating a new barrier for existing traditional trade flows.