The Eurasian Economic Union (EEU) has initiated on 7 August a safeguard investigation into imports of hot, cold and coated flat rolled carbon and alloyed steel products. This follows a complaint from Russian steelmakers MMK, NLMK and Severstal, according to the notice published by the EEU on 7 August, monitored by Kallanish.
The producers cited increasing volumes of import of flat products into the EEU amid ongoing global overcapacity and increased protectionism in the US, EU and Turkey in the last three years. They say the latest safeguarding 25% import duties implemented by the US, preliminary protective measure implemented by the EU and the ongoing investigation in Turkey pose a significant risk factor. This may contribute to further re-distribution of export volumes globally and in the EEU markets and have a negative effect on Russian producers.
The EEU notice says import volumes of hot rolled flat products to the union from Ukraine, Austria and Germany could double as a result of redirected shipments from the US and EU. They could increase by a factor of 2.5 as a result of redirected shipments from Turkey. Potential increases in cold rolled flat products’ imports from these countries could reach 88,5%, 294.9% and 73.3%, respectively. China, South Korea and Ukraine together could increase their supplies of coated steel by 88.2%, 285.9% and 33.1% respectively, as a result of redirected exports from the US, EU and Turkey.
Over 2015-2017, import volumes of hot rolled steel products have already increased by 25.9%, having increased by 45.8% in 2017. Consumption of these increased by only 7.9% in the 2015-2017 period, and by 13.7% in 2017 on-year. Cold rolled steel products import volumes have risen by 38.4% in the same period, the producers say.
Meanwhile, the price difference between imported and domestically-produced steel has fallen by 33%. The cost of production meanwhile has increased by 20.1%, although prices have only increased by 13.8%, thus affecting Russian producers’ profitability.
