September 07, 2008

EU and Russia sign trade deal on steel products

It is reported that the European Union and Russia recently reached an agreement on trade in certain steel products. The two sides agreed on quota levels for 2007 and 2008 on certain flat steel and long steel products, in order to replace autonomous EU measures that had been in place since January of 2007.

The agreement increases the quota on flat steel and long steel products to 2.904 million tonnes in 2007 and 3.031 million tonnes in 2008, versus a level of 2.4 million tonnes which was in effect in 2006.

Quota levels were raised to take into account the enlargement of the European Union with Bulgaria and Romania as well as to cover deliveries to steel service centers in EU member states. It also takes into account the volume of Russian exports of steel products to Bulgaria and Romania before they joined the European Union in January 2007.

Russia has long been the most important source of imported steel products for Europe, and is now second only to China. In the first six months of 2007, the EU imported 4.5 million tonnes of steel products from Russia, 17.5% of total imports of 25.7 million tonnes. These figures also cover other steel products such as semi finished steel products and pipes and tubes. In value terms, 2006 imports of steel from Russia represented EUR 3.366 billion of trade. For the first 7 months of this year 4.75 million tonnes of Russian steel imported had a value of EUR 2 billion .