Europe’s Steelmakers Send S.O.S. Fearing Import Surge
(Bloomberg) -- The coronavirus pandemic has turned a routine European Union review of restrictions on imported steel into something with much higher stakes as EU-based producers push for greater protection.
The spotlight is on EU import curbs introduced almost two years ago to prevent a controversial 25% U.S. levy on foreign steel from diverting global shipments to the European market and flooding it.
The European “safeguard” measures involve a 25% tariff on EU imports of 26 types of steel ranging from stainless hot-rolled and cold-rolled sheets to rebars and railway material when the shipments exceed a three-year average.
Built into the EU measures are planned progressive increases in the import quotas. After an initial review last year, the European Commission raised the quotas by 3% rather than an originally planned 5%.
Now, Europe’s steel producers are demanding a massive quota reduction in a second review that the commission, the 27-nation EU’s executive arm in Brussels, began in mid-February. That was just before the pandemic triggered widespread lockdowns across the EU and sent the bloc’s economy into a tailspin.
Eurofer, the main European steel-industry group representing manufacturers including ArcelorMittal, Thyssenkrupp and Salzgitter, sent a letter to the commission last month urging a 75% quota cut for the second and third quarters of this year to address slumps in European consumption and production of the metal.
“The economy has changed fundamentally,” Eurofer said in the April 2 letter seen by Bloomberg News. “This radically different situation means that urgent action is needed.”
At issue is whether the gradual reopening of the European economy over coming weeks prompts a surge in EU steel imports, which generally account for about 20% of the bloc’s market.
While the commission declined to comment on its review, EU trade chief Phil Hogan has signaled it will take into account the prospect of a jump in steel shipments to Europe from the likes of China.
Concerns exist in Europe “about the possible stockpiling of steel, particularly by China, and what will happen to this particular stockpiling of product when the lockdown is lifted,” Hogan told an April 21 video conference with the European Parliament’s trade committee.
“We are looking at our review of our steel safeguards in this context,” he said. “We’ve had a number of meetings even this month with representatives of the industry, so we are very familiar with their concerns and their problems.”
This review, which the commission plans to complete by June 30, has become anything but routine.
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