The new European permanent safeguard system for steel. in place since the beginning of February, is continuing to create problems. Some specific quotas have already been filled until the end of June and the market is still struggling to understand how much impact these will have on the global sector.

According to official data, three set of quotas have already been completed. These are rebar and wire rod originating from Turkey for the period February-June and automotive HDG from general sources (except China, India and Taiwan) for the period February-March.

In the case of Turkish rebar and wire rod, importers will only be able to decide, eventually, to use the remaining quotas assigned to “...other countries” in the second quarter. Importers of automotive grade HDG from countries such as Turkey, Vietnam or Japan, on the other hand, will now have to wait until the beginning of April to clear their material through European customs.

In the German rebar sector, for example, the uncertainty is palpable. “The new way of splitting the duty-free tonnages per quarter and per country of origin is making everything much more complex – and much more insecure,” one western German manager says. Turkey is the main exporter of rebar to Germany and neighbours, and it took less than one week before the quota for Turkey was exhausted, he adds.

This means that there are presumably volumes sitting at the ports, on the other side of the customs, waiting for the beginning of the next quarter to come. “And I bet you, the quota then will be exhausted in less than a day,” the manager says.