EU Chinese HDG importers await clarity on tariff

Posted on 12 July 2019

Source: Kallanish

European importers of Chinese HDG grouped under the 4b classification are currently taking delivery of their customs-cleared material, but are awaiting clarity on a potential tariff due of over 6%, Kallanish learns from sources.

Last week new quotas for the import of such products were allocated, but in just one day these were filled. Sources report that an excess of almost 200,000 tonnes was cleared at the European ports from the available almost 530,000t of quotas.

As a result, traders calculate that they might need to pay a tariff of 6.25% of the value of the material imported. This could be of as much as €30-50/tonne ($33.8-56.4/t), depending on the purchase price. The tariff is expected to be collected by the port authorities, but one source notes that the procedure has been halted following a request by the European authorities.

“We understood that the European Commission asked the ports to delay collection of the tariff. This could be because they need to check that all the volumes imported comply with the requirements of the 4b subcategory or because they are planning to solve the issue by increasing the quota retroactively,” a trader says.

It is understood importers are able to take delivery of material even if the issue with the tariffs is not resolved. Traders suggest that in most cases the additional costs will be covered directly by them. In the current market situation service centres and end users of the materials are not open to sharing the risks posed by tariffs, they opine.

“The main point to stress is that the volumes cleared last week in most cases were ordered before the permanent safeguard measures were confirmed in February. We got delivery in April and by then the quotas were filled, forcing us to keep the material at the docks for many months,” a trader notes. 

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