EU import quotas for Chinese HDG, HRC and wire rod ‘other country’ quotas filled swiftly

Steel import quotas into the European Union for Chinese hot-dipped galvanized coil as well as quotas in the other country categories for wire rod and hot-rolled coil have filled up swiftly following the beginning of the new quota period Jan. 1.

According to data from the European Commission last updated Jan. 4, hot-dipped galvanized coil imports from China in the category 4B have exceeded the 126,603 mt balance by 52% with a staggering 1.9 million mt waiting to be allocated.

A 25% duty will apply on imported material once a quota has been filled. Category 4B is material used for the automotive sector. The quota for India in category A (industrial use) remains 78% open but 11,688 mt are awaiting allocation adding to the remaining balance of 34,909 mt. Platts, part of S&P Global Commodity Insights, assessed the weekly Northern European HDG assessment at Eur790/mt EXW Ruhr Jan. 3, up Eur/5 mt on month. Quotas for other countries, Korean or Indian material for both HDG categories have remaining balances of 83-100%.

The “other country” quota of 923,594 mt of imports of European HRC has also been filled swiftly with an already registered excess of 18.37% and 1.09 million mt awaiting allocation. Jan. 4

The country-specific quota for Korean HRC has 67.27% remaining out of a 184,008 mt balance and 60,280 mt awaiting allocation. Turkish and Serbian HRC quota levels remain at over 90% available.

“We also suspect the quota for Q2 might also be exhausted,” said a German distributor.

Market participants reported no interest for imported hot-rolled coil among European buyers with most of them concerned about quotas already getting exhausted.

“The materials are now being left at ports, but the high interest rates and high cost of storage are also concerning,” said another German distributor.

An Italian trader also said that storing material for clearance in the second quarter may be risky, which makes imports less attractive to buyers now.

Platts assessed HRC Northern Europe at Eur690/mt EXW Ruhr Jan. 3, stable on month, while the import assessment stood at Eur650/mt CIF Antwerp Jan. 3, which means there is only a Eur40/mt price difference between domestic and import prices which further leads to muted buying interest.

Author Laura Varriale, Rabia Arif, Rituparna Nath