AST's EU Safeguards (Import Duties) Memo

Dear All Steels Trading Customers,

Further announcements were made at the end of last week with regard to safeguard measures to be wisely applied in retaliation to the US Section 232 implementation.

As All Steels Trading we always try to keep our customers fully informed on any significant changes in the marketplace, which will automatically affect steel prices, and the impact of safeguards is likely to be the most dramatic overnight change when the official implementation is announced.

Through our own rolling mills’ trade association links with Eurofer, who act as the interface for steel manufacturers in Europe with the European Commission, All Steels Trading learnt on Friday evening that safeguard duties are highly likely to kick in on steel imported from all non-EU countries as from the 17th July 2018 on a quota basis.  However, because it will be a low quota level and backdated to the 1st January 2018, and imports into the EU have been high this year to date, All Steels Trading believes that the duties will still apply very quickly.

Statement from our own rolling mills’ trade association on Friday night read as follows:

EU Member States Vote to Introduce Safeguard Measures - EU member states meeting in Brussels yesterday voted to introduce provisional safeguard measures in response to the US steel tariffs. These measures (expected to be in place by 17th July) are intended to guard against surges in steel imports resulting from trade diverted away from the US, are urgently needed as trade data shows significant increases in imports for certain products, such as heavy sections and rebar, already this year. This comes on top of the record imports highs seen in 2017. The measures will take the form of tariff rate quotas, with volumes up to the 2015-17 average for each product permitted to enter into the EU tariff free, with only those above the permitted level subject to a 25% tariff. The steel industry had strongly pushed for quotas to be set at national levels to prevent front-loading and stockpiling, but at least for provisional measures the quotas will be set at a global level. The steel sector will continue to push for a more nuanced approach for definitive measures which will need to be decided upon within 200 days. We understand that 25 countries voted in favour of the measures, including the UK, with just three abstaining.

In light of this situation All Steels Trading will only provide quotations for the coming week with 12 hours validity and we must warn you that the upward change in price could be very significant, with increases of £100-150 per tonne being likely across most of the products we offer.  This is simply taking into consideration likely replacement price changes from our suppliers, including shipments that are about to sail from Turkey that could be subject to 25% duties on arrival.

It is clearly a time for recognising the value of your stock and alerting your own sales people to the significance of the safeguard event that will most likely unfold in less than 10 days’ time.

Best regards
Laurence McDougall