The main topic of discussion in the European long steel market this week has been the new country-specific quotas (CSQs) of the EU, which market participants had been eagerly awaiting.
No changes in offer prices for rebar or wire rod have been recorded within the EU this week, indicating overall stability as the summer season approaches.
However, it is worth noting that in the Italian market prices for wire mesh have reached €550/mt ex-works base (€780/mt ex-works), compared to a rebar price of around €440/mt ex-works base (€700/mt ex-works). “This is an extremely wide gap. Usually, wire mesh carries an extra cost of about €30/mt compared to rebar. This is an unusual scenario,” a trader commented.
Regarding quotas, the EU country-specific quotas for reinforcing bars (category 13) and non-alloy and other alloy steel wire rod (category 16) have been allocated as follows:
| Country | Category 13 – Rebar (mt) | Previous quota | Quota reduction (%) | Category 16 – Wire rod (mt) | Previous quota | Quota reduction (%) |
|---|---|---|---|---|---|---|
| Turkey | 239,676.09 | 381,744.44 | 37.22% | 244,589.00 | 476,042.88 | 48.62% |
| Egypt | 144,367.80 | – | – | 86,714.89 | – | – |
| Ukraine | 67,710.16 | 177,721.36 | 61.90% | 189,145.02 | 498,307.24 | 62.05% |
| Algeria | 63,761.42 | – | – | 0.00 | – | – |
| Moldova | 39,719.11 | 114,779.32 | 65.40% | 95,839.25 | 279,749.84 | 65.74% |
| China | 20,216.13 | – | – | 0.00 | – | – |
| United Kingdom | 0.00 | – | – | 175,399.53 | 741,096.52 | 76.33% |
| Switzerland | 0.00 | – | – | 162,195.34 | 547,777.12 | 70.39% |
| Vietnam | 0.00 | – | – | 97,086.65 | – | – |
| Malaysia | 0.00 | – | – | 86,683.40 | 491,019.88 | – |
*Blank fields indicate that those countries did not benefit from a CSQ for those specific categories, or that they drew from the global residual quota.
Market participants’ opinions on the matter differ. Some have expressed satisfaction, while others had hoped for stricter measures. However, all sources interviewed by SteelOrbis agree that the effects of these new measures will only materialize at the end of the summer holidays, as the market is currently at a standstill. In addition, there is a chance that – to offset the missing volumes in the European market – domestic producers will increase their capacity utilization rates. Some are already working on production line upgrades, but at the moment no official communications have been released.
“It is certainly an important message, but some products are under more pressure than others. The consequences will not be the same for all products,” a source commented. “I am satisfied with the measures on rebar and wire rod, but perhaps more could have been done regarding Turkey. The reductions are in line with expectations, and I hope they will help stabilize prices.”
Meanwhile, another representative of an Italian mill stated, “The volume reductions have been lower than expected, while on the other hand the risk related to exceeding the quotas is very high. It will be interesting to see how importers behave. … I expect customs clearance requests will not be so high, also because with this regulation you have a second chance with the residual quota.”
According to reports, however, only considering Turkish material, there are already around 97,069 mt awaiting customs clearance for category 13 (against a quarterly quota of 59,919 mt) and about 93,635 mt for category 16 (against a quarterly quota of 61,147 mt).
In the meantime, export offers for rebar and wire rod from Turkey have been reported at €540-550/mt CFR and €550-560/mt CFR respectively, down by €5-10/mt week on week. As for Egypt, rebar and wire rod offers have been reported at €540-560/mt CFR and €560-570/mt CFR respectively, with only a slight change in the euro-dollar exchange rate from 1.13 to 1.14 compared to the previous week. For Egyptian prices, offers are down by €10-15/mt week on week.
Author: SteelOrbis Editorial Team
