Market sweats potential EU HRC retroactive duties

The potential imposition of retroactive anti-dumping duties on hot-rolled coil (HRC) imports into the EU could affect trade sooner than anticipated.

The European Commission will formally announce its anti-dumping case on Egypt, Japan, India and Vietnam this week, after Egypt — the final country to receive diplomatic notice of the case — received its note over the weekend. The formal announcement will probably be made in the EU's official journal on 8 August, sources in Brussels said.

European steel association Eurofer has pushed for imports from the four countries to be registered and for retroactive duties to be imposed. Retroactive duties have rarely been imposed in EU steel trade cases, although the commission did take this path in its case against Russian and Chinese cold-rolled coil imports in 2015-16.

Retroactive duties are typically imposed 90 days prior to provisional measures taking effect, but this is only possible if imports are registered. The final decision over retroactive duties will be taken at the definitive stage of the investigation. Should the case start on 8 August and provisional duties be imposed after eight months — as is typically the case where dumping is proven — retroactive definitive duties could be imposed on imports dating back to January 2025. This would mean material from these countries clearing customs on 1 January are unlikely to face anti-dumping duties, but imports clearing customs after this date carry the risk of definitive duties, should dumping be proven and retroactive duties are imposed.

HRC trade has been slow in recent weeks, owing to a seasonal slowdown in demand. Service centres are opting to manage their inventories and preserve cash flow, rather than restocking. But this could be the best time to make purchases, given the potential impact to imports the possible duties may bring, sources suggest. The countries covered in the case represent more than 50pc of EU HRC imports this year so far.

"At this price level... the risk of increases is far higher than the risk of going down," one trading firm said. Another trading source did not understand why EU mills were not being firmer on pricing. Argus' north European HRC index has fallen by €30.75/t ($34/t) since the start of June, to €604.75/t ex-works on 2 August, while the Italian index dropped by €29.75/t to €600.75/t over the same period.

By Colin Richardson