Group Business Development Manager, Ross Walker.
It can never have been a more challenging time to be in the metals business. The automotive sector is depressed, currencies are volatile, Brexit uncertainty means projects aren’t progressing, and now importers are having to think about European safeguarding quotas brought in during February further to the US introducing higher tariffs.
For those who aren’t fully familiar with the issue, steel importers could face duties of 25% if they exceed certain trade volumes, completely wiping out any commercial benefit.
The measures are said to protect European producers from trade flows being directed towards Europe and to preserve traditional levels of imports. 26 steel products are affected with the annual quota limits based on an average of the past 3-years’ imports.
This matters to us because it is having a major impact on our customers, who face a logistical and administration nightmare managing their own volumes in a way that avoids incurring the high duties.
At the time of writing the following products were deemed ‘critical’ i.e. either exhausted or within 90% of the allocated quota.
- All imports, hot rolled sheets (period 2nd Feb – 31st Mar)
- Turkish rebar
- Russian rebar
- Chinese metallic coated sheets
- Turkish organic coated sheets
- Russian non-alloy and other alloy wire rod
- Turkish angles, shapes and sections of iron or non-alloy steel
Taking rebar as just one example, Turkish quotas have been exhausted within days of opening, with material still at ports throughout Europe awaiting clearance.
HMRC allows a 90-day period for customs clearance before issuing associated penalties. This offers some flexibility on the safeguarding dates for imports but means that product is retained at the port until it is customer cleared. This ties up cash for the importer and space at the port.
The full impact of the Safeguarding measures in the UK market is yet to be determined. The effect on European supply will be interesting to watch in the coming months around certain products such as rebar where there will be ‘pinch-points’ at various points in the year.
In the meantime, our priority is to work with customers on maximising efficiency through the port. We are already discussing practical measures with customers and we welcome enquiries to email@example.com for all steel and metals business.
See full details of the European Commission implementing regulation which includes:
- Products concerned – Annex 1
- List of WTO ‘developing countries’ where measures apply – Annex 3
- Quota volumes per product per country, including ‘all other country’ tariff allocation per quarter – Annex 4
To check on an individual product the Commission website publishes the tariff balances and volumes awaiting clearance. The database requires the product ‘order number’ for the commodity of interest to be populated to provide an update on its status.
To find out more on our Steel & Metals services, click HERE.
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