Turkish-origin rebar imports awaiting allocation exceed country-specific quota: EC

Turkish-origin rebar import volumes awaiting allocation at the European ports already exceeded country specific quota, according to European Commission data.

According to the EC data, released late Oct. 3, the 100,425 mt of Turkish-origin rebar was awaiting allocation on that day. The EC has a total October-December import quota for Turkish-origin rebar of 90,856 mt.

“It could be worse as far as I know,” one European buyer said Oct. 4. “Romania and Bulgaria are not yet included in that allocation so it can easily be 10,000-20,000 mt on top of that,” the source told S&P Global Commodity Insights, adding that 25% safeguard duties would be applied on all exceeding volumes evenly.

“It’s an individual decision to keep volumes at the port [to avoid safeguard duties],” the source said, adding that if buyers decided to wait for the next quota period to received shipments and store them at the ports, there would possibly be a three-month financing cost incurred and even then, there would be no guarantee that the quota would not exceed next quarter.

Platts’ assessment of Turkish exported rebar was stable at $682.50/mt FOB on Oct. 3, according to S&P Global Commodity Insights data. Turkish mills were currently offering rebars at elevated levels around $690-$720/mt FOB amid high energy costs while sources reported weak demand.

“For the Q1 2023 quota, it’s too early for EU buyers to buy [Turkish rebar] – EU demand is not active as they are consuming their stocks and postponing purchases, but when demand returns Turkey remains the best alternative due to the short lead time,” a Turkish trader said.

Approximately 56,323 mt of imported rebars from other countries subjected to safeguard measures remained out of a quota tally of approximately 132,668 mt, while 76,345 mt was awaiting allocation.

One distributor source in the Benelux region noted that the gap between Turkish imported rebar levels and domestic rebar prices played a significant part in buyers seeking rebars from Turkey, however, no significant import activity was seen for flat steel products in the European market.

Indian HRC steel import quotas

Indian hot-rolled steel imports into Europe dominated the market over the last few quota periods, however, according to EC data published Oct. 3, the market saw low activity for Indian-origin flat steel imports.

For hot-rolled coils, no volumes were awaiting allocation on Oct. 3, out of a country specific quota of 287,227 mt. For the July-September period, 82,226 mt of the allocated quota, remained out of the country specific quota of 287,227 mt. For April-June period, 11,163 mt remained out of a total quota of 314,545 mt.

Some sources noted that the export duties introduced by Indian government in May might have hampered the import volumes for Indian-origin flat steel into Europe. On May 21, the Indian government announced plans, effective May 22, to increase export duties on some iron ore and steel products, including hot-rolled, cold-rolled and coated coils.

“Indeed, the main factors are the then-new export duties and the preference to export boron-added material. Adding boron means the CE mark is lost which excludes all EU service centers for Indian origin purchasing,” an Antwerp-based trader told S&P Global.

“India is also claiming to have a decent domestic market which would limit motivation to compete with lower import levels from other Asian mills such as in Korea, especially under the current export duty,” the source added.

Approximately 22,535 mt of the total October-December quota of 179,365 mt for South Korea-origin HRC was awaiting allocation on Oct. 3.

For Turkey-origin HRC, 9,210 mt of total quota of 452,373 was awaiting allocation as of Oct. 3, according to EC data.

Platts assessed Northwest European hot-rolled coil stable at Eur730/mt ex-works Ruhr on Oct. 3.

— Rabia Arif, Benjamin Steven, Viral Shah