Posted on 27 Mar 2019
Tariff-free quotas for the import of rebar and wire rod into Europe are continuing to exhaust quickly as specific quotas for Russia have also become critical during recent weeks.
In the permanent safeguard measures, the EU allocates specific country-based quotas for the period ending 30 June 2019 to Turkey, Russia and Ukraine imports among others. Turkey exhausted its quotas very quickly for both rebar and wire rod, but now Russian allocations are also approaching the limit, meaning imports of these products in the second quarter will be particularly scarce.
In the case of rebar, for example, remaining Russian quotas available this week were only slightly more than 9,000 tonnes out of almost 95,000t available for the period February-June 2019. In addition, over 3,000t worth of quotas were still waiting to be allocated, confirming that quotas would likely be exhausted by the end of the month.
Rebar importers in Q2 will have the possibility of using the remaining quotas allocated for general origins of which only slightly more than 100,000t are still available until the end of June.
Similarly, for wire rod the possibilities for imports will be tight in Q2, Kallanish notes. Turkish quotas have all been used while those for Russian material are also reducing quickly. importers can still buy from Ukraine or Switzerland, but it is worth noticing that all of the quotas available for general imports until end of March have been used. This means that those wishing to use them for the import of Turkish material, for example, will have only slightly less than 75,000t of quotas at their disposal in Q2.
Market sources confirm that difficulties in importing rebar and wire rod in Q2 is likely to support prices across Europe. As scrap values remain firm, rebar and wire rod prices could well recover further going into Q2.
