Eurofer’s appeals to reduce EU quota volumes draw Turkish mills’ reaction

A source at a major Turkish steel producer told S&P Global Platts Friday he would not be surprised if the European Steel Association (Eurofer) asked for imports to be banned, as part of moves to ensure EU safeguard quota volumes are reduced by the European Commission.

Eurofer is demanding a cut in safeguard quota volumes as steel demand in Europe fell more than 50% in recent months amid the COVID-19 pandemic. The trade association recently wrote a letter in that regard to Phil Hogan, European Commissioner for Trade, sources said.

The EC has recently launched an anti-dumping investigation into imports of certain hot-rolled flat products from Turkey, a decision following an appeal by Eurofer for the EC action.

Turkish steel producers, however, were expecting the EC not to impose any anti-dumping duty against Turkish HRC after the investigation, as Turkish mills steel exports to the EU have declined notably in recent years amid quotas.

After becoming a net HRC exporter in 2018 due to strong EU demand, especially from southern Europe, Turkey flipped to being a net HRC importer in 2019 as trade barriers restricted Turkish HRC exports, especially to the EU.

According to Turkish Steel Exporters’ Union (CIB) data, domestic mills’ steel exports to the EU fell 30% in the first quarter, while European mills’ steel exports to Turkey doubled in the period. Turkish mills have asked the government to impose counter measures against the EU.

Turkey has already increased import duties on some finished and semi-finished steel products for a three month-period to protect production and employment in the domestic steel industry during COVID-19.

According to the decree, customs duties on some alloy and non alloy billet, slab, hot-rolled coil, cold rolled coil, coated coil, stainless steel, sections and some bar products have been increased by 5% effective April 18 until July 15, from the previous range of 9%-15% up to 14%-20%.

However, as EU countries and countries with which Turkey has free trade agreements are exempted from that custom duty rise, EU producers have gained an advantageous in exports to Turkey, Ugur Dalbeler, CEO of Turkish steelmaker Colakoglu, told S&P Global Platts Friday.

“While they are trying to block imports from Turkey, we are providing advantage to them,” Dalbeler said adding that inward processing regime in Turkey, which exempts exporters of finished products, such as pipemakers, from feedstock steel import duties, were also supporting imports.

— Cenk Can