New EU steel safeguards quotas softer than Eurofer ask
Amendments to the EU’s steel safeguard quotas, after a European Commission review initiated in December, are far less stringent than European steel association Eurofer’s requests.
The proposed changes will see the total duty-free hot-rolled coil (HRC) quota volume reduced from 1 April to 1.9mn t/quarter, representing a 12.1pc cut quarter on quarter. The reduction is the result of the decision to remove up to 65pc of redistributed Russian volumes, owing to sanctions after the conflict in Ukraine. Those tonnages will also be taken out of the plate, wire rod and hollow sections quotas. The largest cut in volumes on HRC is for India, with duty-free volume falling by around 23pc.
In addition, the cap to the “other countries” HRC quota access every quarter is reduced to 13pc from 15pc previously. There is now a cap introduced of 13pc for the cold-rolled coil (CRC) quotas, of 20pc for 4B hot-dipped galvanised and 25pc for 4A HDG allocations, as well as 20pc for rebar. The caps for other products are in a range of 15-30pc.
The commission is removing the access to residual quota volumes in the final quarter of the measures’ year, April-June for HRC, CRC and 4A HDG. Importers will get up to 30pc access in the 4B residual volumes. There will no longer be carry over of unused quota volumes from quarter to quarter for several products, including HRC, CRC, 4A HDG, plate and wire rod, but the mechanism will remain in place for 4B HDG and rebar. The commission will also reduce the annual quotas liberalisation rate to 0.1pc from 1pc. The latter two changes will be applicable from 1 July — all other changes will be in force from 1 April.
There will also be a new 1B quota for HRC for imports under HS code 7212 60 00 with negligible volumes, following crowding out of the highly specific product, identified by one interested party.
Notably, there have been very few changes to the developing countries list to which the measures do not apply, with Indonesia, Malaysia, Saudi Arabia, China and Thailand still exempt from the HRC quotas.
Eurofer was seeking a 50pc reduction in flat product quotas as well as a 32-41pc increase in the safeguard duty applicable to material outside allocations. It also proposed a melt-and-pour clause on Chinese steel, and a cut in the HRC other countries’ cap to 7.5pc, not the 13pc put forward by the commission.
Multiple sell-side sources had repeatedly told Argus the changes would be “meaningful”, with the commission understanding the plight of European mills.
However, the changes are substantially less drastic than those requested by Eurofer.
The review has been seen as something of a damp squib by sellers, and even buyers, which were hoping severe import restrictions would help lift prices. A source close to Eurofer said he was “shocked” by the results, and that doors “remain wide open” to imports. Another mill source termed the review a “big fat nothing”.
The safeguard will run until 30 June 2026 and there will be consultations on the review over 11-18 March.
Source: argusmedia.com
EUROMETAL asks for clarifications on EU safeguard review
EUROMETAL, the federation of steel, tubes and metals distribution and trading, has formally requested that the European Commission reevaluate certain critical aspects of its review of EU safeguard measures on steel imports.
In a letter to the Commission obtained by Kallanish, the association urges the EC to extend the deadline of 10 January 2025 for the submission of questionnaires related to the review and harmonise customs rules across member states, among other considerations.
Given that the holiday season that occurs from late December to early January, the deadline of 10 January appears to be overly restrictive. A considerable number of EUROMETAL members encountered substantial difficulties in collecting the required data and organising their submissions within the timeline. In response, the European Commission has granted a three-day extension to 13 January. Although the extension is brief, the association contends that it gives businesses more time to better prepare their answers.
The review should also consider the need for standardised customs processes across the EU to make sure that the rules are applied fairly and consistently. This would create a level playing field.
“Divergences in customs rules across member states often result in inconsistent and incorrect declarations, creating unnecessary administrative burdens and an unequal treatment of European importers,” the letter states.
Clarification regarding the definition of “union users” in relation to the review of safeguard measures is urged.
“Specifically, does this definition include the distribution segment (such as service centres, stockholders and traders), which plays a pivotal role in supplying 60% of all steel products to end-users?” EUROMETAL inquires.
The organisation expresses its support for Eurofer’s proposal regarding the establishment of a steel summit by the European Commission. A summit of this nature would serve as a forum for stakeholders to deliberate on the prevailing challenges of the sector and represent an opportunity to work together in identifying solutions that benefit the overall steel value chain.
EUROMETAL represents 17 European national federations of steel distributors, 35 distributors and service centres as well as 25 trading companies.
The European distribution sector procures 70 million tonnes of steel annually and supplies more than a million small and medium-sized end users. It accounts for 60% of the supply of all steel products to end users in EU.
Natalia Capra France
European Commission investigates extending steel safeguard quotas
The European Commission initiated a review into a possible extension of safeguard quotas on steel imports into the European Union, according to a notification in the Official Journal Feb. 9.
According to the EC, 14 EU member states sent a request to extend the tariff-rate quotas to 2026.
“The request contains sufficient evidence suggesting that the safeguard measure continues to be necessary to prevent or remedy serious injury and that Union producers are adjusting,” the EC said.
As part of the extension investigation, the EC will review the allocation of tariff rate quotas, products as well as categories. The deadline for feedback is Feb. 26.
Market participants mostly welcomed the investigation Feb. 9.
“We need the safeguard extension,” an Italian flat steel service center source said. “Otherwise imports would flood the European market, and the prices would collapse. Neither mills nor distribution need the removal of safeguard.”
European market participants have been warning of the redirection of trade flows while the US is holding up its section 232 measures on imports as European producers are making costly technical changes at steel plants to decarbonize.
“The mills need the steel prices to remain higher to cover the costs of green transition, and exposure of the European market to import without safeguard would make it more challenging,” a European flat steel mill source said.
One European long steel buyer hoped for an update of specific country quotas.
In the current quota period, running from Jan. 1 to March 31, the hot-rolled coil as well as the wire rod other country quotas were exhausted swiftly after opening Jan. 3. The country-specific quota for hot-dipped galvanized coil for automotive use was also exhausted swiftly. Other steel import quotas remain open as of Feb. 9.
“The safeguard is a legitimate and indispensable tool for stabilizing the EU steel market and ensure the sustainability of the European steel industry, which is on its way to decarbonisation,” Axel Eggert, director general of the European Steel Association, or Eurofer, said Feb. 9.
“Massive, market-disruptive import surges from third countries, mostly with little or no climate ambition, further jeopardize the transition,” Eggert said.
Eurofer particularly warned of excess capacity being directed toward Europe without safeguard quotas, as particularly in Southeast Asia, the Middle East, and North Africa steel production is increasing, while China was close to record steel exports in 2023.
“Consequently, the European Union has become a primary target for trade deflection, with steel exports increasingly redirected towards its market,” Eurofer said.
The UK, which has set up its own steel safeguard quotas, is also investigating extending its safeguards while reviewing a temporary extension of the HRC import restrictions for nine months as Tata Steel UK will idle its two blast furnaces this year and not produce HRC until its electric arc furnace starts 2027.
Authors: Laura Varriale, laura.varriale@spglobal.com, Maria Tanatar, maria.tanatar@spglobal.com, Rabia Arif, rabia.arif@spglobal.com
EU Safeguard Measure is to be reviewed for a possible extension
The European Commission officially announced today that the EU Safeguard Measure is to be reviewed for a possible extension. This is backed by 14 member states who had already requested a review from the EC in January 2024.
The European Commission officially announced today, Friday, February 9, 2024, that the EU Safeguard Measure on certain steel products, which was due to expire in mid-2024, is to be reviewed for a possible extension at the insistence of 14 EU member states.
In addition, the measure is most likely to be extended to the longest possible and WTO-compliant period of 8 years.
US Section 232 tariffs have come to stay
Since the US Section 232 tariffs of the Trump Administration from 2018 are still in force and it is not to be expected that they could be repealed in the foreseeable future, the EC has now also recognized: “…that there are no elements suggesting that the US will be removing the Section 232 measures on steel”.
The introduction of the US punitive tariffs triggered a backlash from the European Union and led to the existing EU Safeguard Measures against steel imports to Europe in 2019.
German steel regions had called for EU Safeguard extension
Last Wednesday, we reported on the German steel regions’ call for the German government in Berlin to support a continuation of the Safeguard measure and that it is therefore only a matter of time before the EC takes action.
Source: steelnews.biz