EU hot-rolled coil market: Quotas near exhaustion, oversupply concerns loom

Importers of EU hot-rolled coil are quickly using up their safeguard quotas for the third quarter of 2023. By July, 40% of the quota had already been depleted. Other countries have used up two-thirds of their import quota, while Korea has used up three-fourths. Compared to the previous week, the consumption rate for hot-rolled coil has increased by about 23%, and the import quota for Korea has grown by approximately 9%.

From early July to the present, nearly 900,000 tonnes (t) of hot-rolled coils have been imported into the EU. The amount of EU hot-rolled coil imports during the second quarter of 2023 was around 2.3 million tonnes (mnt). However, in January to May 2023, it was around 8 mnt, down 25% y-o-y. During the period, Italy was the largest importer with 2.6 mnt, followed by Spain and Belgium with 1.3 mnt each.

India became the largest supplier of HRC (hot rolled coils) to the European Union in May, by supplying 1,74,000 t, up by 8.6% m-o-m. Vietnam followed, increasing its supplies by about three times to 1,61,000 t. Egypt exported 1,43,000 t, which was a 43% increase m-o-m. Taiwan supplied 1,28,000 t, a rise of 66% m-o-m, while Japan provided 1,17,000 t, a rise of 24% m-o-m. South Korea exported 92,000 t, an 18% rise m-o-m.

Oversupply concerns

ArcelorMittal's Fos-sur-Mer steel mill in France was temporarily closed due to environmental concerns, while its Gijon steel mill in Spain was restarted after about 3.5 months, despite uncertainty about the closure period. Liberty Steel, after acquiring Dunaferr in Hungary, plans to increase heavy plate production.

However, some industry players believe that the closure of ArcelorMittal's Dunkirk steel plant in France, Tata Steel's refurbishment of the sixth blast furnace in the Netherlands, and Voestalpine's renovation of the fifth blast furnace in Austria will not alleviate the oversupply issue. They expect the oversupply burden to only ease in October, as import quotas are quickly exhausted and local production is slow to ramp up.

This article has been published under an exchange agreement between Steel Daily and SteelMint.