Falling tube imports to pressurise European domestic supply

According to market sources close to the EU tube import quotas dossier, European tube imports should fall dramatically and be halted for most products in the coming two months. This may result in increasing pressure on Europe’s domestic tube supply.

“Regarding gas pipes, Turkey has already used more than 80% of the quota and should exhaust it before the end of May. The North Macedonia quota is already exhausted, the only country that could export to Europe with free quota until the of end of June is India,” a source close to the matter comments.

“As far as hollow sections are concerned the Turkish quota is already exhausted. Other importers such as Russia, Ukraine and North Macedonia will see their quota fully exhausted this week. the countries that will be able to import within the free quota are Switzerland, and to a lesser extent, Belarus for which quota is forecast to run out in beginning of June. The Turkish quota should also be exhausted in early June for all other welded tubes categories such as small line pipes, medium-sized boiler tube, precision tube and even stainless welded. In summary, there are very few commodity products in gas pipes and hollow section that will be imported in free quotas in June as the usual big importers have more or less already exhausted their individual quotas and there won’t be much residual quota to use,” the source concludes.

Safeguard measures were introduced following a surge in imports into Europe triggered by the US Section 232 measures in 2018. Six categories of steel tube are affected by the regulations. These are seamless stainless tubes, other seamless tubes, welded gas pipes, hollow sections, large welded tubes and other welded tubes. 

The safeguard measures consist of tariff rate quotas (TRQs) for 3 years for each of the six product categories mentioned above. Each annual quota is calculated on the basis of the average of imports in the period 2015-2017 with a yearly increase of 5%. When this free quota is exhausted, a customs tariff of 25% ad valorem is applied. They will be valid for the periods February to end-June 2019, July 2019 to June 2020 and July 2020 to June 2021 (see Kallanish passim).