The European Commission (EC) has announced its decision to impose provisional safeguard measures on 23 steel product categories, including rebar, hot rolled products and steel pipes, in the form of a 25 percent out-of-quota tariff. The provisional measures will be applied for 200 calendar days beginning from July 19.
Within the scope of these measures, EU's import quotas will be 4,269,009 mt for hot rolled coil (HRC), 1,318,865 mt for cold rolled coil (CRC), 2,115,054 mt for galvanized coil and other coated steel products and 414,000 mt for pre-painted galvanized iron, which will be implied for the next 200 calendar days.
Looking at the 2018 export figures, Turkish producers’ hot rolled coil exports to the EU amounted to 1.1 million mt in the first five months. Considering Turkey's flat steel export volumes in the first five months, the quotas are not likely to be exceeded within 200 days, while hot rolled coil imports from Russia and Ukraine are subject to antidumping duties. As a result Turkey, one of the biggest import sources for the EU, is expected to maintain its advantage in terms of hot rolled coil exports to the European market.
EU-based producers have welcomed the EC decision and flat steel prices in European domestic market which started to increase on July 16 have been quickly accepted, according to market sources. However, domestic producers in the EU are unlikely to significantly raise their prices given the approaching summer holidays and since the quotas are imposed not to reduce imports, but just to prevent them from increasing further.
Flat steel prices in the European domestic market currently stand at €535-585€/mt ($621-679/mt) for hot rolled coil, at €610-670/mt ($708-772/mt) for cold rolled coil and at €610-680/mt ($708-789/mt) hot dip galvanized coil, all ex-works.
€1 = $1.16