Indian HRC volumes awaiting clearance exceed country-specific quota: EC data

Indian hot-rolled coil import volumes awaiting allocation at European ports exceeded the amount of the country-specific quota that was given by the European Commission, according to EC data on Oct. 1.

With the fresh quota period in full swing from Oct. 1 until Dec. 31, around 181,601 mt of Indian HRC is awaiting allocation at European ports on Oct. 1 – exceeding the quota tally of 169,717 mt.

Sources also expect Russian origin hot-rolled coil quota to be filled abruptly.

"The quotas will be filled very quickly, there is major pressure on the ports. India and Russia have lowest availability of quota out of any other countries so they will be first to go," one German mill source told S&P Global Platts.

One Benelux service center source expects market to feel some pressure on domestic HRC prices as the imported product starts flowing in.

"The main pressure on prices is from imports. I think we will see more decreasing prices for this next quota period, after that maybe stable. There is a lot of material at the port, most of the service centres will get material and have more panic if they see higher stocks," the source noted.

Approximately 86,815 mt of the total October-December quota of 416,848 mt for Russain-origin HRC was awaiting allocation on Oct. 1. For Turkey, the quota tally stands at 330,388 mt, with 161,859 mt awaiting custom clearance.

S&P Global Platts assessed Northwest European hot-rolled coil up Eur5/mt to Eur1055/mt ($1222.63/mt) ex-works Ruhr on Oct. 1.

Turkish rebar imports volume at double of country-specific quota

Sources reported that over 100,000 mt of Turkish rebar is awaiting allocation at European ports -- almost double the initial quota tally of 61,938 mt.

One Turkish mill source told Platts that mills seem to have exported over 105,000 mt of rebar to Europe in three months, which means the current fourth quarter quota for Turkish imported rebar into EU is already exhausted. The source noted that it might hinder Turkish mills' ability to sell substantial quantities to EU to be cleared during the next quota period starting Jan. 1, 2022, meaning that Turkish mills might not be able to sell to Europe till March 2022.

Another EU buyer noted that Turkish mills have sold around 110,000 mt of rebar to European buyers during the third quarter in 2021.

"So, most likely a large number of importers will leave out some volumes and wait to clear them on Jan. 1, 2022. I expect that approximately 30,000 mt will be left uncleared all around Europe," the source told Platts.

"If the rumors are true that a Northwest European importer has already bought 25,000 mt [of rebar from Turkey] and we will have 30,000 mt left on top of that, this pretty much means that most of Q1 2022 quota is already booked," he said.

One EU trader was under negotiations to lower clearance volume set to be cleared as the October-December quota period started.

"We will see how it goes, but the absence of organization of Turkish rebars producers for sales to Europe will disadvantage them," he told Platts, indicating that it might increase reluctance among European buyers to purchase further from Turkish mills.

Approximately 12,751 mt of the total October-December quota of 61,938 mt for Turkish-origin rebar was awaiting allocation on Oct. 1.

Platts assessed Turkish exported rebar at $660/mt FOB Turkey Oct. 1, stable on day.

US, EU negotiations on S232 tariffs

There are also discussions going on between US and Europe to devise alternatives to Section 232 steel tariffs.

"There is no way to predict how it will be concluded. We understand there is now a goodwill between the two to have a compromise and somehow allow European steel to come to the US on more preferential terms. We have not heard of a certain distinction between products," Yuri Rudiyuk, a trade lawyer, said Sept. 30 during a presentation at the Eurometal conference in Lisbon.

A decision is expected to be made by Dec. 1 when the EU plans to start applying retaliatory measures against the US as a result of Section 232 measures.

"Everyone will want a solution before Dec. 1," the source said.