And not just European steel producers but their respective governments, too, are finally taking steel anti-dumping measures seriously.
Ministers from seven steel-producing member states — Germany, Italy, the UK, France, Poland, Belgium and Luxembourg — essentially all the major European steel producers — have put their names to a letter urging the European Commission in Brussels to take greater action to tackle unfair trade practices by Russia and China.
Provisional Anti-Dumping Duties
The pressure group asked the European Commission to expand on actions announced last week to impose provisional duties later this month of up to 16% on China, and of up to 26% on Russia, following its investigation into alleged dumping by the two countries. Reuters reported that provisional duties on cold-rolled flat steel were announced Feb. 14 and definitive duties could be imposed at the conclusion of the investigation, by Aug. 12. Such duties would typically apply for five years.
China’s Ministry of Commerce retorted saying “the European Commission will strictly abide by World Trade Organization (WTO) rules, show prudence and restraint and use trade remedy tools in accordance with the law,” the MOFCOM said in a notice posted on its website.
That the European steel industry is in crisis comes as no surprise, facing as it does some of the world’s highest labor, tax, environmental and energy costs in the world, but the loss of nearly a quarter of the region’s steelworkers since 2008 is bringing the very existence of the industry into question after imports surged 29% in the third quarter of last year.
Eurofer Wants More Action, Less Talk
The EU is imposing duties on imports of cold-rolled flat steel from both Russia and China, with a similar case being heard for hot-rolled flat steel and recent provisional duties on Chinese rebar labeled as insufficient by Eurofer, the industry trade body.
China, for its part, has challenged the EU to bring its case before the WTO for analysis, possibly hoping the WTO may find in its favor more readily than the EU Commission. To say European steel producers are at risk of survival is probably no exaggeration; European governments have collectively failed to respond to the threat of rising imports with the same energy as the US, and now they are facing an industry fighting to staunch hemorrhaging losses, both financial and in workers. The UK has lost a quarter of its steel jobs since October of last year.
Nor is this just a China issue, with the Russian ruble at half its value relative to just 18 months ago, Russian steel producers have slashed prices in Europe yet held domestic ruble returns steady, neatly side-stepping the allegations of dumping. The EU commission, though, cannot fail to act with action over the coming weeks and months likely to rise if Russia and China do not move more dramatically to curb exports, a move they have — save the very preliminary cold-rolled flat duties — so far failed to make.