Italian trade association Assofermet believes the extension of EU safeguard measures should be scrapped as it will impair the economic rebound from the impact of the Covid-19 pandemic. It will also exacerbate steel shortages, which are causing a slowdown in the downstream steel value chain, as well as the entire economy.
In a letter sent to Kallanish, Assofermet expresses discontent at the EU proposal to extend safeguard measures beyond 30 June. While the investigation period for the measure is 2018-2020, the European Commission (EC) does not consider the economic rebound forecast for the period 2021-2022, which will see steel consumption increase significantly in Europe, the association says.
Extending safeguards is “irresponsible” and “lacking in common sense in light of the current market trend of the European steel industry, profoundly different from that of early 2020,” Assofermet comments.
Moreover, the EC proposal comes only 19 days before the expiry of the measures. However, European producers’ lead times stretch, in some cases, to 5-6 months. “Many importers have agreed with third-country suppliers contracts for material scheduled to be received in the second half of 2021,” the association observes.
Assofermet accuses the EC of only protecting the interests of producers while forgetting about end users and underestimating the dramatic impact the safeguard extension will have on the entire European economy. An increasing number of distributors and end users will now be forced to implement production stoppages due to difficulties in procuring material on the European market. As a consequence, Italy will not be able to fully take advantage of the European economic recovery fund, PNRR, the association warns.
Last week the European Commission notified EU member states as well as the WTO of its intention to prolong steel safeguard measures for three years beyond 30 June. According to the EC proposal, a relaxation of tariff-free quotas of 3% annually would be implemented during 2021-2024.
Consultations on the proposal are set to take place between 14 and 18 June. The European Automobile Manufacturers’ Association (ACEA) also condemned the Commission’s proposal as a move that disregards the interests of downstream users of steel amid acute automotive steel shortages (see Kallanish passim).
Natalia Capra France