EU arbitrage opening for lowest-duty Chinese HRC
Sales opportunities could be opening up for Chinese hot-rolled coil (HRC) exports to the EU.
Chinese exporters are subject to both anti-dumping (AD) and countervailing duties (CVD) in the bloc, with the combined lowest for Hesteel and Handan at 18.1pc. Both are subject to 10.3pc for AD and 7.8pc for CVD.
Chinese HRC prices have today hit another low, with the Argus fob China assessment at $480/t fob. Lower Chinese offers were heard available too into some destinations. With freight at around $50-60/t from China to the EU, and a combined duty of 18.1pc, the duty included price comes to just over $630/t cfr, or €580-590/t cfr. There have been offers into the EU lately from risk-free origins at €580-590/t, either exempt from safeguards or with ample quotas. They are of limited interest at present, given weakening domestic prices.
China itself is not subject to the EU's safeguard measures under product category 1, HRC. So, should the arbitrage remain, China is relatively risk free compared with countries with individual or capped quotas. Potential dumping cases on sellers under the other countries' quota could also increase the perception of China as a safer option.
Some large EU buyers have the ability to purchase Chinese HRC without paying dumping duties provided the material is processed and exported outside the EU.
Chinese export prices have come under further pressure this week after the launch of an anti-dumping investigation in Vietnam on Chinese HRC — Vietnam has been a key market for China, which shipped over 4mn t to the country in the first six months of this year, compared with just over 6mn t in 2023. Brazil has recently also clamped down on imports, introducing tariffs that mainly target Chinese imports. India is expected to initiate a dumping case on Chinese HRC, while market participants suggest Taiwan could also announce a case soon.
Related news posts
EC notifies Vietnam of HRC dumping complaint
EC notifies Vietnam of HRC dumping complaint
London, 30 July (Argus) — The European Commission said it has notified Vietnam that it has received a complaint for the initiation of an anti-dumping investigation into imports of hot-rolled coils (HRC). The commission did not identify who filed the complaint against Vietnam. Should a probe be launched, the commission may decide to pick a sample of exporters to investigate because of the large number of producers from Vietnam. Market participants have expected an EU investigation into Vietnamese HRC imports since volumes started picking up. Last year Vietnamese imports of HRC into the EU rose to 1.13mn t, from 400,000t in 2022. Vietnam has frequently been the lowest-priced supplier on the market, targeting primarily large buyers and pure commodity grade coils. Since the launch of the Argus HRC cif Italy origin differentials earlier this year, Vietnam has traded at a discount. There is talk that an investigation into Vietnamese hot-dip galvanised (HDG) could be launched too, and a probe into HRC imports from major ‘other countries' such as Taiwan, Japan and Egypt. . Vietnam itself has this week launched a dumping investigation on imports of HRC from China and India and previously into HDG from China. By Lora Stoyanova Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
CRC should be removed from UK steel safeguard: traders
CRC should be removed from UK steel safeguard: traders
London, 29 July (Argus) — Cold-rolled coil (CRC) should be removed from the UK steel safeguard because Tata will not produce material for external sale, traders told the Trade Remedies Authority (TRA). During its decarbonisation drive, Tata Steel will only produce CRC as a substrate for galvanising lines — the mill will not produce for external sale annealed CRC that can be used for commercial purposes, such as the automotive and office furniture industries. Tata sources confirmed annealed CRC will not be produced for sale, and that the company will use it as substrate for the manufacture of tinplate, hot-dip galvanised (HDG) and Colorcoat at its sites in Trostre, Llanwern and Shotton, in south and north Wales. All of these lines have annealing built into their respective processes. The closure of Tata's continuous annealing processing line in March 2025 and batch annealing will mean the company has no cold-rolled annealing capacity from that date, a source close to the company confirmed. As a result, UK service centres that buy CRC will have to resort to European or imported material and will not be able to purchase domestically produced CRC from Tata Steel. Tata is the only domestic producer of CRC, and there can be no safeguard if there is no domestic output. HRC suspension The UK market is still awaiting the government's decision on whether or not to suspend the import quota for hot-rolled coil (HRC). The TRA has recommended the quota be suspended in light of Tata's increased importation of HRC, but it has not been actioned by the new government — it was made in April, but was also not approved by the previous administration. The TRA's "suspension assessment" was ongoing, even though it made its recommendation months ago, a spokesperson for the department of business and trade said. The International Steel Trade Association has written to the new secretary of state for business, Jonathan Reynolds, regarding the suspension. Traders believe Tata should not be able to import HRC that is not used in its downstream processing facilities for the production of CRC and HDG. Traders and some service centres argue HRC being cut into sheet is not sufficiently downstream, as this is what most service centre importers do. Tata reportedly wants its own quota for HRC imports. By Colin Richardson Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
India’s Tata Steel tests biomass at ferro-chrome plant
India’s Tata Steel tests biomass at ferro-chrome plant
Singapore, 29 July (Argus) — India's Tata Steel has carried out a trial using charcoal as a feedstock at its domestic ferro-chrome unit, with it also open to importing the biomass product. It said it finished the trial on 20 July, in which it replaced conventional reductants such as coke in the Athagarh ferro-chrome plant in east India's Odisha state with carbon-neutral biomass charcoal, made from the low-temperature burning of wood in an oxygen starved atmosphere. The carbon released during the ferro-chrome production process was balanced by carbon absorbed by the trees from which wood for the charcoal was taken, it added. The trial was part of Tata Steel's sustainability drive to cut emissions from its operations. Athagarh has ferro-chrome production capacity of 55,000 t/yr. The use of 5pc of biomass in production is expected to lower carbon dioxide (CO2) emissions by 0.08/t of ferro-chrome, Tata Steel said, which is about 6pc of total CO2 emissions from the plant. The company is carrying out more trials and feasibility studies to stabilise the use of biomass in ferro-chrome production, it said, adding that plans to commercialise biomass use as a feedstock have not been finalised yet. Tata Steel might also consider imports of charcoal if is commercially and technically feasible. Tata Steel is also working with Australian resources firm BHP to adopt low-carbon iron and steel production . This includes using biomass and carbon capture and utilisation technology, which could cut emissions by up to 30pc for integrated steel mills. By Nadhir Mokhtar Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Blast furnace works cut S Korea's Posco 2Q steel output
Blast furnace works cut S Korea's Posco 2Q steel output
Singapore, 26 July (Argus) — South Korean steelmaker Posco reported lower crude steel output and sales in the second quarter because of refurbishments at its Pohang blast burnace, but a higher operating profit. Posco's crude steel production dropped to 8mn t over April-June, from 8.66mn t in the first quarter and 8.85mn t a year earlier, the company said in an earnings call on 25 July. Sales volume also dipped to 7.86mn t, from 8.23mn t in the previous quarter and 8.48mn t a year earlier. The firm's utilisation rates fell to 79.1pc in the second quarter, from 85.6pc in the first quarter and 87.3pc a year earlier. Posco began maintenance and modernisation of its No.4 blast furnace at Pohang in late April, which has a capacity of around 5.3mn t/yr. But production resumed at the end of June, raising its scrap consumption as reflected in its resumption of regular weekly purchases of Japanese scrap after a three-month halt. The group's combined steel revenue, including Posco and overseas steel facilities, stood at 15.4 trillion won ($11.1bn) in the second quarter. This was largely steady from the previous quarter but down from W16.5 trillion a year earlier. Combined steel operating profit stood at W497bn in the second quarter, up from W339bn in the first quarter, but less than half of W1 trillion a year earlier. Posco reported higher mill margins as the cost of raw materials dropped and sales price increased. But overseas upstream operations reported losses given an influx of cheap imports into the southeast Asian market and lower sales prices. Battery, other expansion plans Revenue from secondary battery unit Posco Future M fell by 20pc on the quarter and 23pc on the year to W915bn. Operating profit stood at W3bn, down from W38bn a quarter earlier and W52bn a year earlier. Posco, while citing a difficult battery materials industry over April-June, said during the earnings call that it is "closely monitoring demand fluctuations." The firm will pace its investment, but it will "not lose out" on any opportunity to invest in essential resources such as lithium whose prices have "hit rock bottom." Posco flagged the approaching US presidential election and shifting strategies of major automakers as factors that will continue affecting the EV supply chain. This was echoed by South Korean battery maker LG Energy Solution , which expects global EV market growth to come in at slightly over 20pc this year, down from 36pc a year earlier. Posco's first domestic lithium hydroxide plant, located at the Yulchon Industrial Complex in Gwangyang, with a capacity of 21,500 t/yr aims to start full operations in February 2025. It will be operated by Posco-Pilbara Lithium Solution, a joint venture between Posco and Australia's lithium miner Pilbara Minerals. The company also expects to finish building a second plant at the same location with similar capacity in September whose full operations will begin in September 2025. Its Argentinian lithium operations will have a total capacity of 50,000 t/yr in the near term, split between phase 1 and phase 2, which will start full operations in April 2025 and June 2026, respectively. Trading firm Posco International also reported that the final stage 4 expansion of its Myanmar offshore gas field will start in July, with about 4mn t/yr of By Tng Yong Li and Joseph Ho Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Business intelligence reports
Get concise, trustworthy and unbiased analysis of the latest trends and developments in oil and energy markets. These reports are specially created for decision makers who don’t have time to track markets day-by-day, minute-by-minute.
Learn more