Insight: Importers eyeing July as EU longs quotas fill

EU safeguard quotas for imports of rebar and wire rod from “other countries” were exhausted a week after they opened, according to the official European Commission website.

Importers are starting already to keep material for July in the ports and there are expectations that again the Turkish quotas will be filled up just days from July 1.

The existing quotas ran from April 1 to the end of June for 139,270 mt of rebar and 78,000 mt of wire rod from “other countries,” meaning that in the first week of April those precise volumes entered the EU, with market sources agreeing that most of that came from Turkey and Russia, as their country-specific allocations were quickly filled on February 9.

EU importers can still buy from Ukraine, Bosnia-Herzegovina, Switzerland, Moldova and Belarus without facing the 25% cap duty. As of Monday they can still import 18,948 mt of rebar from Ukraine, 26,000 mt from Bosnia and Herzegovina and 11,000 mt from Moldova. Rod importers can still import from Ukraine (90,796 mt), Switzerland (66,793 mt), Belarus (83,000 mt) and Moldova (34,820 mt), according to the EC website.

Due to the import limitations, some importers are starting to feel the pressure. “For this second half of the year now hard times are on their way,” a Netherlands-based importer said. “For example for us it is difficult to import from Switzerland as no one produces a commodity grade of rod that we need; or from Ukraine for example, where they are finding it hard to export at the moment.”

One Germany-based trader said all eyes are on the July quota allocation, although he said there was “definitely no shortage” of rebar in Europe. However, he said rod buyers, particularly independent wire rod drawers, were in for a hard time as they depend increasingly on imports.

“From Turkey there is a huge risk [of having to pay the 25% tariff], because everyone will try for customs clearing on July 1. If you have a delay, you may have your material there, but then you can’t import without a tariff,” he said. “For ‘all other countries,’ trade flows are changing, not by market requirements but by political interference.”

One UK importer of rebar, who imports large volumes from Turkey, said: “We cannot currently run the risk of buying Turkish material because we fear that the quota material will be filled in a few days,” he said. “We struggled with customs clearing on February 1 and April 1.”

“I find it surprising that there is no trade body that is willing to count export sales to Europe so we can avoid this risk in our purchases,” he added. “By the time it [the rebar] is imported it’s too late for all of us; someone should be counting what has been imported into the EU [in a more timely manner].”

— Annalisa Villa and Pascal Dick