European HRC quota for ‘other countries’ immediately full after start of new period

European importers have exhausted safeguard quota for hot-rolled coil originating from ‘other countries’ in a couple of days after start of the new quota period of Oct. 1- Dec. 31, according to European Commission published data Oct. 3.

Currently 1,041,719 mt of HRC originating from “other countries” are awaiting allocation, exceeding the quota for October-December this year of 933,744 mt.

Not all numbers are final of course, but that is the indication,” a Northwest European trader said.

The current situation matches the original expectations of the market sources, as significant volumes of HRC from Asia, mainly falling under ‘other countries’ category, had been imported in the late spring-early summer due to competitive prices.

Quota from South Korea, which has country-specific quota, was filled by 52.51% from a total quota of 186,030 mt.

“Quota for ‘other countries’ was full in the first days of the fourth quarter, in fact the volumes awaiting allocation exceed the allowed volumes,” an Italian distributor said. “So some buyers will have to pay a duty, maybe around [the equivalent] of 2.5%. Which is not bearable for big buyers as they booked HRC with discounts.”

A service center source said: “And we will see how much HRC will be left at port, and if the importers would choose to pay the quota or to pay to keep the material in ports until January.”

Quotas from major HRC supplying countries that have their own quotas, however, have not been filled: the UK used only 1.05% of its assigned quota; India 2.91%; Serbia 0.67% and Turkey 0.3%. Prices from these countries had not been competitive compared with domestic prices and importers had been avoiding purchases.

Demand in the European coil market has been low due to sufficient stocks, low end-user demand and the influx of imported coil in the start of October supports the negative mood in the market, sources said.

Platts assessed domestic prices for hot-rolled coil in Northwest Europe at Eur625/mt ex-works Ruhr on Oct. 3, unchanged on day.

Platts assessed prices for imported hot-rolled coil in the region at Eur600/mt CIF Antwerp on Oct. 3, down by Eur20/mt.

Platts is part of S&P Global Commodity Insights.

Maria Tanatar