According to Argus, the elevated shipping times caused by tensions in the Red Sea could prevent India's hot-rolled coil (HRC) safeguard quota in the EU from overfilling on April 1, as previously expected by market participants.
India shipped just over 520,000 tonnes of HRC to the EU in December and January, which appears to have been fully cleared into the first-quarter quota. Including unused tonnage rolled over from the previous quarter, this quota totaled 574,550 tonnes, with only 46,934 tonnes currently unused.
This suggests that material shipped from India in February will predominantly comprise the April-June quota of 294,662 tonnes. Vessel tracking data shows that India shipped 404,582 tonnes of flat-rolled products to the EU in February, although the data does not specify the product breakdown.
Longer shipping times due to vessels having to go around the Cape of Good Hope instead of sailing through the Red Sea are expected to impact the clearance of Indian material. Vessels arriving via the Red Sea in January took around half the time compared to the 45.5 days it is expected to take in April.
As a result, around 189,000 tonnes of the February shipments could be cleared into the April-June quotas on April 1, along with 46,934 tonnes of tonnage held over from the current period. Assuming all the material shipped in the first half of February was HRC, the quota would not overfill on the first day, but is expected to fill later in the month.