EU steel import quotas for hot-rolled and cold-rolled steel coils and hot-dipped galvanized steel have filled at a slower rate than expected since new import safeguard measures took effect April 1, according to market sources.
The European Commission reduced quota levels per country and announced it would stop the quarter-to-quarter transfers of unused quota volumes for HRC, CRC and HDG category 4A.
First-quarter HRC safeguard quotas for key Asian suppliers were exhausted within a week, highlighting Q2’s slowdown in fill rate and largely subdued demand that has persisted in the market.
Some sources cited the bullish implications of the measures on domestic material, with many midstream buyers expecting supply-side price increases amid the changes.
Since the new measures have taken effect, domestic HRC in Northern Europe has been assessed at the highest level seen since April 2, 2024, where it was assessed at Eur665/mt ex-works Ruhr.
HRC in Northern Europe was assessed May 1 at Eur655/mt ex-works Ruhr.
In contrast, imported HRC in Northern Europe was assessed May 1 at Eur545/mt, down Eur5 month over month, which some sources attributed to the uncertainty of these new measures for importers, and the strong availability of domestic material.
Some market participants believed the amount of unallocated material was larger than anticipated.
“Many people were uncertain and didn’t know what measures would be introduced, so they didn’t place many orders,” a service center source said.
“New safeguard clauses from April 1 have kept import activity low,” one trader told Platts. “Some trading houses don’t offer steel to EU customers anymore.”
However, a second service center source suggested that with more clarity on trade measures, there could be an increase in imports again.
The wider price differential between domestic and imported HRC could suggest that imports may be starting to look more attractive, as market participants have previously raised concerns about the quality of material and delivery times of imported material.
“We are still cautious about the market spread between import and domestic,” a mill source told Platts, referring to the price differential. “When do we get to the [price] point where people are willing to take a risk on them.”
Market participants have also cited Indonesia as a viable alternative for HRC imports. Following their exemption from any safeguard measures, the number of Indonesian-origin materials being offered has sharply increased.
The April 7 implementation of temporary antidumping duties on HRC imports from Egypt, Vietnam and Japan on April 7 further increased the attractiveness of Indonesian material.
Hot-rolled coils
South Korean HRC quota levels are at a critical level, according to data from the European Commission. The initial quota amount allocated for South Korean material was 161,144 mt, and only 2.49% remains as of May 2.
Quota levels on imported Turkish HRC have 44.41% remaining, out of an initial quota allocation of 397,957 mt.
The “other country” category for HRC has 69.87% left, out of an allocation of 856,770 mt. Serbian quota levels are at 71.40% available, from an original quota allocation of 142,379 mt.
The country-specific quota levels for the UK and India remain above 95%.
Platts, part of S&P Commodity Insights, assessed imported HRC in Northern Europe at Eur540/mt CIF Antwerp May 1, down Eur5 from April 1. Imported HRC in Southern Europe was assessed at Eur530/mt CIF S. Europe May 1, down Eur15 since new measures took effect.
Cold-rolled coils
Quota levels for CRC have remained largely untapped since the start of the second quarter.
South Korean quota levels for CRC have 66.37% remaining, from an original quota allocation of 94,591 mt.
The “other country” category has 75.55% left out of a 334,370 mt allocation.
India, Serbia, and the UK all have remaining quota levels above 85%, with many sources suggesting the CRC market, particularly for imports, has been relatively subdued since the new measures came into play.
Platts assessed imported CRC in Northern Europe at Eur 635/mt CIF Antwerp May 1, largely stable since April 1. The monthly Southern European import price was assessed at Eur 640/mt CIF S. Europe May 1, up Eur10 Month over month.
Hot-dipped galvanized steel
A 25% duty will apply on any additional imports of HDG 4A from India and HDG 4B from China, after quotas were exhausted April 4.
One service center source said that this exhaustion is “unlikely to have much of a longer-term impact.”
HDG 4A is used primarily in the industrial sector, whereas HDG 4B is typically used in the automotive.
The “other country” category for HDG 4A has a quota level of 22.65% remaining, from an initial allocation of 473,050 mt.
UK quota levels for HDG 4A have 39.10% left, out of 35,355 mt. Levels for South Korea remain around 75%, from a quota allocation of 37.523 mt.
For “other countries” in HDG 4B, quotas are at a critical level according to the data, at 6.55%, from an allocation of 104,799 mt.
South Korean, Indian, and UK HDG 4B quota levels range from 70%-84% available.
Platts assessed domestic HDG in Northern Europe April 30 at Eur750/mt ex-works Ruhr, up Eur25 since April 2, and in Southern Europe at Eur730/mt, up Eur10 over the same period.
