OK, got over laughing yet?
Yes, the European Union will impose anti-dumping duties of up to 35.9% on imports of a grade of electrical steel from China, Japan, Russia, South Korea and, yes, the United States, which those countries are allegedly selling at below cost.
European Commission Acts
According to Reuters it is the EU’s second set of measures this year to protect European steel producers such as ArcelorMittal, Stalproduckt STP, ThyssenKrupp and Tata Steel UK. Apparently the European Commission has just set tariffs on imports of grain-oriented, flat-rolled electrical steel (GOES, for those of you that regularly read our MMI coverage) following a complaint lodged in June 2014 by the European steel producers association, Eurofer.
The duties are provisional, pending the outcome of an investigation due to end in November, but as we all know the moment a duty looks like a real possibility importers stop importing in case they get caught retroactively. Normally, such steel dumping duties would then continue for five years, the paper reports.
More specifically duties of 28.7% will cover imports from Chinese companies, including Baosteel and Wuhan Iron and Steel Corp. and of 22.8% from South Korean producers such as POSCO. The rate for US producers including AK Steel is 22% and for Russian firms such as NLMK 21.6%.
Meanwhile, Japan’s JFE Steel Corp. will face duties of 34.2% and Nippon Steel and Sumitomo Metal Corp., among others, 35.9%. Eurofer is quoted as saying the dumped imports have damaged the EU industry by driving prices to below the costs of production, causing substantial losses. It said the market share of dumped imports into the EU rose to 47% in 2012, with most from Japan and Russia.
2nd Anti-Dumping Action This Year
This action follows anti-dumping duties being applied in March to flat-rolled stainless steel from China and Taiwan, a new investigation into specific grades of steel rebar and attempts to prolong the existing duties on Chinese wire rod.
In the case of GOES, though, transformer makers are bracing themselves for a rise in prices. There are said to be only about 16 producers in the world, with over half of them suffering substantial new duties, options will be limited for European-based transformer manufacturers to maintain current input costs. As my colleague, Lisa Reisman, recently reported, European electrical power equipment manufacturers have come into the market early to secure high-grade material regardless of the outcome of the European trade case. High-grade prices are on the rise.
With the new tariffs, GOES producers will face a double whammy. On the one hand, the probable loss of European outlets and on the other a rise in imports from overseas producers caught up in the action now looking for new markets.