The main topic of discussion within the European Steel Market this week was the new EU Country Quotas (CSQs), which market participants were eagerly awaiting.
No changes in supply prices for rebar or wire rod were recorded in the EU this week, indicating overall stability as the summer season approaches.
However, it is worth noting that in the Italian market, prices for wire mesh have reached 550 euros per ton (780 euros per ton) compared with the price of rebar of about 440 euros per ton of finished products (700 euros per ton of finished products). "This is an extremely large gap. Wire mesh is usually more expensive by about 30 euros per ton compared to rebar. This is an unusual scenario," the trader commented.
As for quotas, the quotas for specific EU countries for reinforcing bars (category 13) and wire rods made of non-alloy and other alloy steel (category 16) are distributed as follows:
*Empty fields indicate that these countries have not taken advantage of the quotas for these specific categories or that they have taken advantage of the global residual quota.
The opinions of market participants on this issue differ. Some expressed satisfaction, while others hoped for tougher measures. However, all sources interviewed by SteelOrbis agree that the effects of these new measures will only manifest themselves after the summer holidays, as the market is currently in a state of stagnation. In addition, there is a possibility that, in order to compensate for the missing volumes in the European market, domestic manufacturers will increase the utilization factor of their production facilities. Some of them are already working on upgrading production lines, but at the moment there have been no official reports.
"This is certainly an important message, but some products are under more pressure than others. The consequences will be different for all products," the source commented. "I am satisfied with the measures regarding rebar and wire rod, but perhaps more could be done regarding Turkey. The cuts are in line with expectations, and I hope they will help stabilize prices."
Meanwhile, another representative of the Italian plant stated: "The reduction in volumes was less than expected, while, on the other hand, the risk associated with exceeding quotas is very high. It will be interesting to see how importers behave.[ ]I expect that the requests for customs clearance will not be so high, including because thanks to this regulation you have a second chance to get a residual quota."
However, according to the available data, only taking into account Turkish materials, there are already about 97,069 tons.