Details regarding the free trade agreement signed between Turkey and Ukraine on February 3 have started to come to light, SteelOrbis understands. Accordingly, some products such as flats, wire rod and rebar will be subject to a quota volume (still subject to certain duty rates), while others including semis will see 20, 30 or 50 percent reductions from the current duty rates.
Specifically, hot rolled flat products will be subject to no duty, down from the current 9-13 percent within the quota amount of 120,000 mt per year, and cold rolled flat products will be subject to six percent duty, down from the current 10 percent within the quota amount of 70,000 mt per year. Regarding long products, wire rod will have a 50,000 mt quota volume per year and imports made within this amount will attract 10 percent duty, while rebar will have a 100,000 mt quota volume per year and imports made within this amount will attract 10 percent duty. The current duty rates are 12 percent and 15 percent for wire rod and rebar respectively. When the quota volume is exceeded, the imports of the products in question will be subject to the duty rates that are now in force.
The potential effect on the HRC market is the issue that troubles players the most for now, taking into account that the 120,000 mt quota is a low volume because last year Ukraine sold 1.06 million mt of the product to Turkey. However, the low volume amount will cause trouble for buyers rather than for sellers as the duty will be paid by the buyer, a market source tells SteelOrbis. Also, there may be additional talks with the government for some further amendments as market players are not too happy with the conditions announced today. Given the long ratification process, the agreement may only come into force at the end of this year or even next year, SteelOrbis understands.
