India HRC volumes awaiting clearance more than twice as big as country-specific quota: EC data

Indian hot-rolled coil import volumes awaiting allocation at European ports are more than double the amount of the country-specific quota that was given by the European Commission, according to EC data July 2.

With the fresh quota period now in full swing from July 1 until Sept. 30, 381,699 mt of Indian HRC is awaiting allocation at European ports – more than double the initial quota tally of 169,717mt.

The volume awaiting allocation for hot-dipped galvanized coil from India in category 4A was also almost 57% of the quota balance of 49,638 mt.

“Lots of people bought Indian material because they needed it not because the price was particularly attractive,” said one German stockholder.

The European Commission’s decision to extend import safeguard measures by three more years and increase allowances by 3% was met with criticism from buyers heavily reliant on imports, particularly in Italy. Following the exhaustion of quotas, a 25% duty applies.

“EU mills won’t be able to offer all the products we need, this year has been an awful year about their service with unbelievable delays,” an Italy-based service center source said. “We are really worried for the next few months.”

Since the end of last year, shortages across the coils market have been rampant, with buy and sell-side players clashing over weekly price increases and depleting stocks.

Import effect on Italian domestic prices

After the news of the European Commission’s decision to extend the safeguards, import material booked in April and May has now entered the marketplace, eliciting a temporary bearish effect on Italian HRC prices.

“Some bids for lots of 5,000 mt plus are as low as Eur1050/mt ex-works Italy, justified by huge availability of import offers from everywhere and signals from Asia,” an Italy-based mill source said.

“A lot of Indian material will be released in July with new quotas, and it has been booked well under Eur900/mt CIF Italy ports,” the same source said. “And now big buyers are getting Eur950-1,000/mt CIF Italy ports for new offers, October arrival.”

Some sources suggested that Indian imports will continue to be attractive even with a 25% duty if European prices remain elevated.

For Turkey, the new HRC quota is 330,388 mt and 47,038 mt is awaiting volume allocation. For Russia, the quota tally stands at 416,848 mt, with 8,686 mt awaiting custom clearance.

For rebar among long products, over 86% Turkish quota totaling 61,938 mt, and 46% of Russia’s total quota of 59,963 mt, is awaiting allocation at ports.

For wire rod, around 80% of the total quota volume of 82,910 mt for Russia is awaiting allocation.

— Laura Varriale, Amanda Flint, Rabia Arif