European producers will be more interested in the hot-rolled coil and preparation of Ukrainian origin
The US temporary suspension of Section 232 tariffs on Ukrainian steel for another year is likely to help EU exporters, informs Fastmarkets.
Sources of the price agency expect that this decision will lead to an increase in demand for Ukrainian steel in Europe. Steel enterprises will use Ukrainian semi-finished products or raw materials for the production of steel products, and these products will be able to enter the US without paying import taxes.
In a statement published by the White House, it is stated that steel products from a member state of the European Union, which used steel smelted and cast in Ukraine, are not subject to and do not count towards the domestic volume of the tariff quota established in the proclamation in December 2021. The wording reflects changes in trade relations that began in 2021, when the United States and the European Union agreed to replace Section 232 tariffs on steel and aluminum with tariff quotas for 27 countries in the bloc.
According to Fastmarkets sources, as a result, European producers of steel pipes will be more and more interested in hot-rolled coil from Ukraine, and exporters of rebar – in billets of Ukrainian origin. In addition, it will be an opportunity for EU steel mills to increase the supply of rebar and wire rod to the USA. In the European Union, the demand for graded rolled steel has been falling since the end of last year, and the prospects for 2023 are not the best yet. In 2022, the total volume of exports of rolled products from the EU to the United States increased by 22% – up to 695.4 thousand tons.
«The decision taken by the United States is the right step to support the Ukrainian economy. However, it is not sufficient, as anti-dumping duties on Ukrainian steel products continue to apply in the USA. It would be logical to cancel anti-dumping duties as well, as the European Union did. The possibilities of additional deliveries of products from Ukraine are quite limited and they will not harm either European or American producers,» says GMK Center analyst Andriy Glushchenko.
Import duties at the level of 25% for steel and 10% for aluminum were introduced in 2018. The United States appealed to Section 232 of the 1962 law, which allows the president to restrict imports if it threatens national security. Subsequently, America’s free trade partners – Canada and Mexico – were exempted from the specified customs tariffs. Then importers from other countries, including Brazil, Japan, and South Korea, received benefits.
As GMK Center reported earlier, the government of the UK accepted the recommendation of the Trade Remedies Administration (TRA) to extend the suspension of trade defense measures on imports of hot-rolled flat and coil products from Ukraine for another 12 months.
Also, on May 25, the Council of the European Union adopted a resolution, which renews the suspension of all customs duties, quotas and trade protection measures on Ukrainian exports to the EU for another year, until June 2024.