EU steel quota after adjustment with Russia

Previously, according to the announcement of the President of the European Commission (EC) on March 11, the EC has imposed a fourth package of sanctions against Russia, which includes an import ban on goods. iron and steel from Russia to the EU. Russia's export quota to the EU will be divided among other countries as a solution for the EU to cope with the situation of hot steel demand after the ban.

The EU's 2022 quota reallocation will be detailed to each other EU partner country based on import and export figures for 2021 and will be based on whether those countries supply similar products. like Russia in 2021 or not. The list of products with quotas entering the EU includes: HRC, sheet steel, CRC, coiled steel, section steel, pipe steel, box steel, galvanized steel and color coated steel sheet with a total quota of about 30 million tons of which HRC accounting for 12 million tons, steel plate is about 4.6 million tons, etc. In detail about the allocation of quota:

 

 

- HRC: the output of more than 407 thousand tons of Russia imported into the EU will be the most increased for India, by 39% from 166 thousand tons to 273 thousand tons. Turkey increased 25% from 323 thousand tons to 430 thousand tons.

- Steel coil: the output of more than 81 thousand tons imported by Russia into the EU will be the most increased for Turkey by 27% from 78 thousand tons to 107 thousand tons. Moldova increased 24% from 48 thousand tons to 63 thousand tons.

- Steel plate: the output of more than 74 thousand tons imported by Russia into the EU will be increased the most for India by 19% from 49,000 tons to 61 thousand tons. Ukraine increased 16% from 216 thousand tons to 256 thousand tons.

- Steel pipes/boxes: Russia's output of 59 thousand tons imported into the EU will be the most increased for Turkey by 34% from 64 thousand tons to 97 thousand tons. China and the UK both increased by 17% from 106,000 tons to 128 thousand tons and from 89 thousand tons to 107 thousand tons, respectively.

Other items have only minor adjustments.

Comment: the redistribution of quotas has caused turmoil in the international market

India has now stopped exporting HRC to Vietnam to focus on the EU market when the price of HRC in this market has surpassed the threshold of USD 1,500/ton. India's latest offer price has also reached 1,300 USD/ton CFR. Given the current situation where despite the continuous increase in prices, the supply of HRC is still in short supply in Europe, India's price increase is not expected to stop.
Among the countries that are allocated quotas, Turkey is one of the most allocated countries, it is estimated that it can benefit an additional $ 1 billion through exporting steel to the EU market. At the same time, Turkey is the world's No. 1 scrap steel importer, so this country immediately accelerated the import of scrap, leading to an increase in scrap prices. This can drag the global market price up.