Chinese automotive HDG EU import quotas evaporate early

Posted on 03 July 2019

Source: Kallanish

European import quotas for automotive grades of HDG have come, as expected, under great pressure on the first day the new allowances have become available, Kallanish learns from sources in the market. The quotas are part of the EU safeguard system implemented earlier this year.

Chinese HDG quotas were just under 530,000 tonnes for the twelve-month period starting on Monday 1 July. These were exhausted in just one day as some 560,000t of material was awaiting clearance at European ports.

Traders across Europe are now waiting to receive confirmation of how much they will have to pay of the 25% tariff for the volumes above the allocated quota. Kallanish understands that quotas are assigned daily. if the quota is therefore surpassed on a given day, tariffs would be divided percentage-wise among all participants requesting the custom clearance on that day.

A trader with a significant volume of HDG to be cleared at ports this week notes nevertheless that this should be seen as a “… win-win” situation for importers. “We will be paying a tariff, but in percentage terms it will be less than the duties on Chinese HDG for non-automotive grades. Also, by using up the quotas in one day we are putting further pressure on the European Commission to accept the need to change the system for this product,” he adds.

Importers looking to buy HDG from China will now have to wait until 1 April 2020 to be able to use the more than 320,000t residual quotas available for ‘other countries’. Meanwhile some imports could be processed from Taiwan, India and South Korea.


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