Key facts
- EU steel importers are still seeking clarity on new import measures 10 days after their July 1 implementation.
- A new residual quota is available on a first-come, first-served basis for countries with both an EU free trade agreement and a country-specific quota.
- Market participants have differing interpretations of how excess volumes in country-specific quotas will be handled, with some believing they cannot be automatically transferred to the residual quota.
- Importers in Italy, Spain, Portugal, and Estonia may be able to withdraw volumes from country-specific quotas and apply for clearance into the residual quota.
- Some market participants believe the EU may introduce adjustments to the regulations within six months due to the rushed drafting.
- A 14-day blocking period is in place, and companies may need to pay a 50% duty deposit to receive material during this time.
EU steel importers are still seeking clarity on the technicalities of the bloc's new import measures, 10 days after the regulation took effect on July 1. Alongside significantly smaller free allocations, a key change is the addition of a new residual quota, available on a first-come, first-served basis to countries with both a free trade agreement with the EU and a country-specific quota for a given product.
Market participants noted that the EU's official legislative document lacks sufficient guidance on how this residual quota will be administered, leading to different interpretations among companies. The prevailing view among traders is that excess volumes in country-specific quotas cannot be automatically transferred to the residual quota, and many importers will have to pay pro-rated duties. However, importers in Italy, Spain, Portugal, and Estonia may be able to withdraw volumes from country-specific quotas and apply for clearance into the residual quota, according to some market sources.
There is also ambiguity regarding whether the pullback mechanism is still available and in which countries. Some market participants believe excess volumes in country-specific quotas will clear automatically into the residual quotas if there is room. Several participants expressed the view that the EU is likely to introduce adjustments to its new import regulations within six months, suggesting the legislation was drafted in a rush, having been released on June 30, the day before implementation.
An unusually long blocking period of 14 days is in place, meaning customs cannot release material into the market. For many products, unanswered questions regarding residual quota allocations make it difficult to estimate payable duties with certainty. Some suggested that companies wanting to receive their material during the blocking period would need to pay a 50% duty deposit. The European Commission did not respond to requests for comment, and traders and buyers reported that inquiries have yielded no definitive clarity.