EU quota definitions hinder Swiss merchant bar exports

Swiss mill Stahl Gerlafingen has been affected by EU restrictions against flat-rolled and sheet products, although it does not produce them. However, as a side effect, the subsidiary of Beltrame has lost markets in neighbouring EU countries and, as a consequence, announced last week that it will discontinue production of merchant bar.

In the definition of the products it subjected to safeguard measures in 2019, the European Commission’s Category 1 – tariff quota order number 09.8601 – comprises rolled sheet and strip. In this product group, the EU also includes wide flat steel, sometimes referred to as universal flats. This is essentially merchant bar, which has different production routes and customer sectors than coil/sheet/strip.

It has since been a political issue between Switzerland and the EU, involving the Swiss economy ministry. Unlike some other non-EU countries, there is no bilateral agreement with Switzerland giving it a separate contingency for such products. Instead, wide flat steel competes with any coil imports from overseas countries, against which it does not stand a chance, the ministry says in a dossier sent to Kallanish. “Since summer 2023, the quotas that are allowed per quarter are basically filled in a matter of hours or days by overseas importers,” the ministry writes.

According to a Stahl Gerlafingen spokeswoman, the mill cannot compete with the tonnages sitting in vessels outside EU ports, waiting for clearance on the first day of each quarter. The problem has been aggravated over time, along with increasing shiploads from overseas. Last summer, it came to a head. Since then, Stahl Gerlafingen, with its limited storage capacities, cannot deliver the same volumes in a short time to EU Customs as the vessels at Antwerp or Rotterdam.

Any volume outside the quota limit would require payment of a 25% duty, “which neither the Swiss exporters nor the EU importers can cope with in a profitable way”, the economy ministry writes. “Exports of steel of Product Category 1 have since been de-facto impossible.”

Christian Koehl Germany