EU plans to introduce global safeguard quotas on some steel products

The European Commission (EU) announced that it is planning to introduce new import quotas for some steel products and extend steel import safeguard measures until 2024.

The commission submitted a proposal to extend the steel import safeguards to World Trade Organisation on May 30.

Proposed changes in quota system-

The annual import quota will be increased from 3% to 4% and the new system will be implemented from 1 July of every year.

The commission has decided to change the import quota for each country into a global import quota for 'category 7' (thick plate) and 'category 17' (angle and section steel). In both categories, Ukrainian imports account for 33% of EU's total imports.

Due to Russia's invasion of Ukraine, the EU decided to temporarily allow import liberalisation of Ukrainian steel products and also suspended the application of steel safeguards for the time being.

However, individual quotas were applied for Ukraine in 'category 1' (hot-rolled steel sheet), 'category 4B' (hot-dip galvanised steel for automobiles), and 'category 26' (other welded steel pipes).

The commission has added Vietnam to its 'other countries quota' as it updated its list of developing countries for steel imports. Vietnam is added to 'category 1' (hot-rolled steel sheet), 'category 3A.3B' (electrical steel sheet), and 'category 4B' (hot-dip galvanised steel for automobiles).

The developing countries such as Brazil, China, Egypt, India, Kazakhstan, Malaysia, Moldova, North Macedonia, Ukraine, the UAE, Thailand, Vietnam are included in 'category 4A' (hot-dip galvanised steel). It is because the proportion of imports from these countries rose from less than 3% to 9% in 2021.

Egypt, too, is added to 'category 1' (hot-rolled steel sheet) and China to 'category 2' (cold-rolled steel sheet), 'category 3A' (electrical steel sheet), 'category 14' (stainless steel bar and light weight section steel), and 'category 25A' (large diameter welded steelpipe).

On the other hand, Brazil and Vietnam are excluded from 'category 2'.

Notably, only Brazil is excluded from 'category 3A', but added to 'category 6' (stone steel plate).

India is excluded from 'category 3B' (electrical steel sheet) and North Macedonia is excluded from 'category 5' (colour steel sheet).

For 'category 8' (stainless hot-rolled steel sheet), Turkiye and India are added while Egypt is excluded. In 'category 9' (stainless cold-rolled steel sheet), China and Malaysia are added while Thailand is excluded. Malaysia and Moldova are added in 'category 12' (merchant bar and light weight section), the UAE in 'category 16' (alloy steel wire), and 'category 19' (railway steel) and Kazakhstan in 'category 24' (other non-grained wood pipes).

In the case of Korea, the EU quota distribution is as follows-

The European Commission is of the opinion that the implementation of the US steel import reduced quota tariff (TRQ) would not affect the functioning of the EU's steel import safeguard system and would not change the evidence supporting the assessment of trade system transition risks.

The European Steel Association (Eurofer) responded positively to the European Commission's decision to continue safeguarding steel imports in order to ensure market stability and smooth supply flow in the region.

Steel prices continue downtrend in Europe

EU hot-rolled coil prices have been on a downward trend since late-March. As of June 23, the price of hot-rolled in northwestern Europe was Euro 860/tonnes (t) exw and that in southern Europe was Euro 780/t exw, down 6.7% from the beginning of 2022, respectively.

Note: This article has been published under an article exchange agreement between SteelDaily and SteelMint.