EU rebar importers bemoan ‘hidden volumes’ at customs

The introduction of permanent safeguard measures on steel imports into the EU is causing considerable unease in the market, Kallanish hears from participants in the German rebar sector.

“The new way of splitting the duty-free tonnages per quarter and per country of origin is making everything much more complex – and much more insecure,” one western German manager says. Turkey is the main exporter of rebar to Germany and neighbours, and it took less than one week before the quota for Turkey was exhausted, he adds.

This means that there are presumably volumes sitting at the ports, on the other side of the customs, waiting for the beginning of the next quarter to come. “And I bet you, the quota then will be exhausted in less than a day,” the manager says.

“You do not have trade flows these days – you have material sitting somewhere. The problem is: you do not know what volumes there are on the other side,” another buyer says, reinforcing his colleague’s observation. “So, if you order now for delivery sometime in April, the quota is likely exhausted before your material even arrives at the port, and then it stays there.“ Buyers could still pay the 25% duty of course, “… but just try to hand that down to your customers,” he complains.

Both observers therefore believe that domestic EU mills will have space to increase both utilisation and prices. “Big bending firms that are used to buy certain volumes abroad will run into problems when they try to get 15,000 tonnes from a mill here, and then get only half,” one says. The current domestic base price is seen at €280-300/tonne ($317-340/t), which translates to a delivered price of €545-565/t, trending to the higher end.

The latest price suggested from German sources for rebar from Turkey delivered to premises in early February would have been near €500/t. “A good price, without question, but linked to a lot of risk these days,” one says.