EUROFER, IndustriAll Europe rebuke E.U.’s lack of steel import quota adjustment

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Europe
Andrey Kuzmin/Adobe Stack

This has been a challenging year for a number of sectors, amid already slowing growth and then the massive impact of the coronavirus pandemic — but the European steel sector has been hit particularly hard.

The E.U. previously imposed steel safeguards in 2019, a response to rising import levels on the heels of the U.S.’s Section 232 tariffs. Last September, the E.U. opted to slow down the steel quota increases from 5% down to 3%.

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MetalMiner’s Stuart Burns recently broke down the challenges faced by the European steel sector and the E.U.’s efforts to protect it.

“Horrified at the prospect that displaced steel would flood the European market, local steel producers successfully lobbied the European Commission to impose safeguards, allowed under WTO rules, to protect domestic producers from the risk of displaced steel production, principally from Asia, looking for a home in Europe,” Burns wrote.

The E.U.-imposed quotas in 2018 on 26 grades of steel and stainless steel including hot-rolled and cold-rolled sheets, rebars, and railway material (set at the average of 2015-17 volumes, plus 5%). Imports that exceeded this quota would incur a 25% tariff, effectively placing a ceiling on imports based on historic volumes. At the time, this amounted to about 20% of the European market, but as required under WTO rules the quota increases by 3% per annum and is supposed to expire in 2021, three years after it was introduced.”

In a statement Tuesday, the European Steel Association (EUROFER) and IndustriAll Europe panned the E.U.’s decision not to adjust the quota schedule to account for declining steel demand.

“This is the worst crisis we have seen in decades, and it represents a failure to exploit the safeguard tool to the fullest possible extent. This may risk thousands of jobs and could cost taxpayers billions if the ensuing closures of steel facilities throughout Europe cannot be prevented by other measures”, said Luis Colunga, deputy general secretary of IndustriAll Europe.

“We need an emergency meeting with EU policymakers. Together we can work on solutions to rescue the strategically vital European steel sector. Only a robust domestic industry can reliably contribute to completing the circular economy, continue the transition to carbon neutrality, and ensure the welfare of Europe’s people.”

Axel Eggert, director general of EUROFER, said E.U. steel demand has fallen by 50% since March.

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“We have seen a collapse of 50% in EU steel demand since March, but the tariff-free import quota has been further raised,” Eggert said. “Objectively, this makes no sense. We had expected a clear decision for European industry. This did not happen. The resulting marginal technical changes may help one or other steel product group but most of our industry has been left in the cold.

“We are ready and willing to sit down with policy makers with an open mind in order to develop a way forward for our sector and the downstream sectors it services. The result of the revised safeguards is a major upset, and the EU must still find ways and means to avoid further closures and job losses in the European steel sector.”

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