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EU safeguards quota to hit Turkish rebar mills - Report

Steel News - Published on Fri, 18 Jan 2019

Image Source: Reuters
Reuters quoted some sources as saying that the European Commission’s move to extend its steel import restrictions threatens to force Turkish mills, already buckling under the weight of US tariffs, to cut production further or in some cases close down. A London based Turkish steel trader told Reuters that “Our export markets have disappeared, the local market hardly exists, we’ve got lots of capacity and no market.”

Turkish Steel Exporters’ Association (CIB) head Adnan Aslan said “EU quotas for Turkish rebar are extremely low and will be exceeded in the first one or two months. Local demand is also extremely poor.”

International Rebar Producers and Exports Association said “Traditional export destinations for Turkish mills are closing one after the other. Most probably, the EU quotas will be filled immediately, so EU producers will have a relatively good year.”

Major Turkish mills such as Cebitas and Ekinciler said they had, before the EU announcement, already slashed output while Koc Metalurji said it had stopped output for about a month. However, Erdemir, Turkey’s largest producer, said it was producing as normal.

The Commission said on Wednesday it will extend and beef up its existing safeguard steel import caps until July 2021 to counter concerns that European Union markets are being flooded with steel no longer being exported to the United States. For Turkey’s vast steel sector, the fourth largest contributor to the country’s economy, the caps could prove particularly painful as the EU has given it additional country-specific quotas. Under the safeguards, Turkey has a tariff-free quota for rebar, a construction steel that makes up most of its steel exports, of around 300,000 tonnes for the first nine months of the respective quota periods, down 60 percent from its 2018 exports. Country-specific restrictions do not apply in the last three months of the quota periods and Turkey could make up some sales then, but its annual export levels will still be sharply lower.

Jefferies estimates EU caps on rebar from all countries combined should reduce its total rebar imports by at least 28 percent a year, adding producers such as ArcelorMittal and CMC should benefit most from EU caps on long products like rebar.

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Posted By : Ratan Singh on Fri, 18 Jan 2019
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