Russian steelmaker Severstal cheered the European Commission's introduction of a cap on hot-rolled coil imports from primary exporters under its steel safeguard.

Severstal hails EU steel safeguard 30pc capSeverstal reported that the 30pc cap would be "beneficial" as it never came close to this share, which is a "serious limitation" for other countries. Russia's largest share of the EU HRC import market so far this year was 18.27pc in February — Turkey accounted for 53.77pc of the total import market in January, and has routinely been above 40pc. Severstal is the only Russian mill that can regularly compete in Europe as it has a much lower dumping duty than its competitors.

Severstal said the commission's cap on rebar and wire rod imports from other countries would be helpful. While the reduction of the 5pc liberalisation to 3pc is negative, it will not have a "significant impact" on the company.

Turkish market participants concur that the lowering of the liberalisation will not cause many issues because EU demand is weak anyway — low domestic pricing has reduced import appetite since March-April time. The 30pc cap on HRC will clearly be an issue, as it will in the residual quotas for wire rod and rebar. Although the tonnage reduction on longs will be lower than coil.

Turkey shipped around 1.64mn t of HRC to the EU 28 in January-May, and received 725,507t in return, meaning it had a surplus of more than 915,000t.

One European buyer said the 30pc cap is a "smart move" as it avoids the imposition of country-by-country quotas on HRC, which Turkey could well have mirrored. A producer said it was an "elegant" solution to rising Turkish volumes earlier this year, although it does enable other regions to pick up the slack.

It is worth noting that Turkish shipments to the EU are likely to continue to reduce, while European shipments to the country will rise on the back of anaemic demand and weak prices domestically.

European steel association Eurofer said the review was "broadly positive", particularly the reduction of the liberalisation and inclusion of Indonesia, which has seen stainless imports increasing.