The EU will NOT impose provisional duties on imports of low-carbon ferrochrome from Russia, Turkey, and China. The provisional duties were expected to be announced on Mar. 23.
Usually, the decision not to impose provisional duties means that the EU will not impose final duties, but this isn’t the case with low-carbon ferrochrome. Instead, the EU is using the time to change (liberalizing) its designation for low-carbon ferrochrome. Currently the designation for low carbon is any ferrochrome with a carbon content of 0.5% C, which is the same designation in the US.
However, most of the low-carbon sold in the EU—and in the US –is 0.10% C and above, normally 0.15% C. With European mills OPPOSED to the duties on 0.10% C and above, the separation of low carbon for ultra low carbon made sense. Also, Russia, Turkey and China are very small in the ultra low-carbon ferrochrome market anyway.
Afarak, who initiated the dumping case last year, probably won’t object since its market is ultra low carbon material, which provides the highest profit margins for the company. Afarak has never been that competitive in the 0.10% C market, consumers say. “The ultra low market is very small,” one supplier admitted. “Usually, the material has to be qualified so someone would find it very difficult to enter. Afarak has a lock on that market.” Also, Afarak has substantially increased its ultra low carbon sales to the US.
The EU is expected to hold a hearing on the matter later this month. The only problem is getting Customs in changing the designation for low carbon to more than one grade and away from the 0.5% C standard.
Meanwhile, a few merchants have taken positions in Europe in anticipation of duties. If the duties are restricted to material above 0.051% C, the question is whether the material will be dumped into the market driving prices down or whether the resellers will hold on to their positions in hopes of a general recover