South Korea Nearing Q1 Section 232 Quota Limit for HRC

South Korea’s first-quarter quota limit is 121,408.21 tonnes, per CBP documents. That leaves a balance of 33,914.47 tonnes under the country’s first-quarter quota ceiling.

The result: Hot-rolled coil imports from South Korea will probably be significantly below the 57,487.7 tonnes that arrived in February, a month that saw the highest Korean HRC imports in at least two years.

South Korea is subject to a Section 232 quota rather than the 25% tariff that most nations face. And it is typically the No. 2 supplier of foreign hot-rolled to the U.S. behind Canada, which has not been subject to Section 232 since 2019.

Some market participants think that imports from South Korea and elsewhere will continue to rise over the spring and summer because of record-high steel prices.

Steel Market Update’s U.S. hot-rolled coil price stands at $1,270 per ton ($63.50/cwt), an all-time high.

But others reason that increasing prices abroad mean that imports to the U.S. market could be more muted than expected in the months ahead. And it’s not just steel prices abroad that are rising, so too are ocean freight rates because of widespread congestion and logistical snarls stemming from the COVID-19 pandemic, sources said.

“The window of opportunity for booking imports seems to be closing as world prices are rising again,” one East Coast trader said.

Freight rates, meanwhile, have doubled or in some cases almost tripled, a Gulf Coast manufacturer said. “The congestion is everywhere, and the main culprit is the U.S.”

The situation has become so severe that it has led some foreign steelmakers to withdraw offers, the Gulf Coast source said. “I’m starting to think we might not see the top until June,” he said of U.S. prices.

By Michael Cowden, Michael@SteelMarketUpdate.com