Indonesia to Lose European Commission
The European Commission recently completed its review of the safeguard measures,
which were introduced to prevent the redirection of material previously destined
for the United States. The Commission has recommended changes, to the list of
products from developing nations, that are currently excluded from the quota
system. It has made the proposed amendments based on the latest full year’s
import statistics, instead of the ones used in the previous definitive measures.
Brazil and India were removed from the list for stainless steel hot rolled
sheets and strip. These countries will become exempt from the quotas for this
product. Turkey has obtained an exemption from the safeguard measures for
stainless steel hot rolled quarto plates. This could result in increased
imports, into the EU, from these countries.
In the proposal, Indonesia will lose its developing nation exclusion for both
stainless steel hot and cold rolled sheets and strip. Imports, in these
categories, will be subject to the quota and tariff system. Tonnages, from this
country, have been arriving in the EU at a growing rate, since mid-2018.
Hot rolled stainless steel, from Indonesia, increased to over 25 percent of the
total imports into the EU, in the first quarter of 2019. China still accounts
for more than half of the foreign sales into Europe. The safeguard measures have
done little to stop the rise in stainless steel imports, from all countries,
since they were introduced in July 2018.
The volume of Indonesian cold rolled stainless steel, arriving into the EU,
increased to approximately 8 percent of total imports, in the first three months
of this year. However, production of cold rolled material, in the country, is
limited. Taiwan remains the largest supplier, of cold rolled sheets and strip,
Crucially, imports of hot and cold rolled sheets and strip, from Indonesia in
2018, exceeded the World Trade Organisation’s 3 percent threshold, at which
developing nation exemption is lost. This is the year that was used in the
recent review by the European Commission.
Prior to the announcement of the proposed changes to the safeguard measures,
Eurofer submitted an antidumping complaint to the European Commission. This
covered hot rolled stainless steel sheet and coil from China, Indonesia and
Taiwan. This investigation, combined with the application of quotas for
Indonesia, is expected to result in a reduction in imports of hot rolled
stainless steel products, in the remainder of 2019.
The proposed changes, if agreed by the member states, will come into effect on
October 1, 2019.
Nickel prices have increased significantly, since early
July. The threat of bringing forward a ban on ore exports from Indonesia, before
the originally planned 2022 date, is the main cause of this dramatic rise.
Further price advances could be recorded, if the date of the ban is confirmed.
However, the current prices suggest that the market have already factored in a
large part of the impact that this would have. Consequently, any additional
price gains are likely to be modest and short-lived.
Inventories, held in LME warehouses, moved back above 150,000 tonnes. Cancelled
warrants have also fallen, of late. This could signal that traders are getting
nervous about the level that nickel prices have reached. Consequently, a
downward correction in nickel values is predicted, later in the year.
Spot chromium prices moved upwards, in August. A modest increase is expected to
contract prices in the fourth quarter, in the EU and US. Molybdenum costs moved
upwards, this month. Values are likely to soften, in the near term, due to weak
demand in the global market.
Stainless Steel Price
Rising raw material costs are expected to push global
stainless steel transaction values upwards, in September and October. Ongoing
trade disputes and antidumping measures, being implemented in nations on all
continents, may restrict the availability of foreign material in many countries.
This could encourage more customers to purchase from their domestic suppliers,
in the coming months. Consequently, the traditional price downturn, usually
observed in the final quarter, is expected to be muted, this year.
Source: MEPS -
Stainless Steel Review - August 2019
Also See: EU -
Stainless Steel Price Table
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