EU steel importers are reporting delays in customs clearance under the new quota system that came into effect on July 1, prompting some buyers to reconsider their plans for customs clearance of imported material.
Although the general framework of the new quota system, including a 47% reduction in total steel quotas and an increase in protective duties to 50%, was made public in advance, details regarding country-specific quotas and residual quotas were published in advance. They were published just one day before the decree came into force – on June 30. The lack of clarity paralyzed trading activity in the European market of rolled materials in June, as buyers were unable to plan their purchases from both foreign and domestic suppliers.
Numerous market sources reported that customs authorities across the EU were not ready to process imports in accordance with the new rules, given the last-minute statement from the European Commission. As a result, it may take customs at least two weeks to determine which quotas have been exhausted and which importers will have to pay duties.
The lack of certainty, lower-than-expected quotas for specific countries, and large volumes of imported materials that are already in ports have prompted some buyers to reconsider their customs clearance plans. Some sources reported that they decided to postpone the customs clearance of hot rolled roll (HRC) imported from Turkey due to the risk of exceeding the quota.
"Currently, the new quotas are blocked for two weeks, and no one knows anything," said the German distributor.
"Customs is really not ready. Some contracts submitted for customs clearance earlier this week have been selected for physical verification, and the earliest date will be available in three weeks," the trader said.
In addition, sources in the Benelux countries reported that customs authorities are requesting a deposit to cover potential 50% duties on all goods undergoing customs clearance. This requirement has added preliminary precautions for companies that may already be facing liquidity shortages and cannot afford to deposit significant amounts of cash until imports are cleared. Sources from other EU countries reported that they had not encountered similar demands from local authorities.
Buyers began to show more interest in domestic steel as they were unable to import it in the originally planned volumes, and this trend is expected to support the recovery in domestic prices, the sources said.
Author: Maria Thanatar