Dec 21, 2023
EU confirms quota extension of Russian slab until 2028, but volumes to be reduced

The European Commission has moved to extend import quotas for Russia-origin steel slab for four more years, according to an official notice published on Monday December 18 in the Official Journal of the EU.

This comes after multiple sources told Fastmarkets last week that it was likely the quotas would be extended for a further four years, with an annual decrease in quota volumes.

The details of the new twelfth package of the EU sanctions against Russia in response to its invasion of Ukraine were published in the EU Official Journal on December 18. These included restrictions on imports of some ferroalloys and pig iron.

While the main purpose of sanctions is to limit trade flows, sources were quick to point out the latest package is set to extend the existing quotas for Russian slab until 2028.

Notably, the EU document said that from September 30, 2024 until September 30, 2028, a total of 10.9 million tonnes of semi-finished steel products falling under CN code 7207 12 10 (steel slab) would be allowed to enter the EU market without restrictions.

The annual quotas, however, are set to be reduced each subsequent year.

Notably, 3.185 million tonnes of Russian slab will be allowed to enter the EU between 1 October, 2024 and 30 September, 2025; 2.998 million tonnes between 1 October, 2025 and 30 September, 2026; 2.623 million tonnes between 1 October, 2026 and 30 September, 2027; and 2.061 million tonnes between 1 October, 2027 and 30 September, 2028, according to the EU Official Journal.

The current quota for Russian slab, which runs until September 30, 2024, is set at 3.75 million tonnes.

Meanwhile, Russia-origin billet imports (code 7207 11) will be banned effective 1 April, 2024. Billet and slab quotas were the part of the Commission’s eighth sanction package against Russia in response to its war in Ukraine.

The lobby to extend quotas was led by the European re-rollers, the main consumers of slab, namely in Belgium, Italy, Czech Republic.

Following the news of the slab quota extension, market sources told Fastmarkets they had seen an immediate increase in prices for Russia-origin slab to the EU.

Notably, the only non-sanctioned slab supplier to the EU has increased offers to Italy to $640 per tonne CFR, in line with offers of “premium mills” from China for plate-quality slab, sources said.

In the week to December 15, December offers from this supplier had stood at $600 per tonne CFR, to Italy.

“This decision [to extend the quotas] practically legalizes import of Russian slab and gives buyers a green light to book from Russia. Such a disgrace,” a source in the EU market told Fastmarkets, expressing their disappointment at the move.

Vlada Novokreshchenova in Dnipro contributed to this report.

Source: Eurometal