Italian steel distribution association Assofermet has expressed concern over the European Commission’s initiation of an anti-dumping (AD) investigation into cold-rolled coil (CRC) imports, alleging an insufficiency of domestic quality and supply of the products under investigation.
Assofermet “expresses strong disappointment and concern” in relation to the European Commission’s opening of the investigation last week, citing “higher quality standards” associated with relevant producers; downstream dependence on the targeted CRC imports; and existing overlaps with other trade instruments like the existing safeguard protections and anticipated impacts from the fiscal stage of the Carbon Border Adjustment Mechanism (CBAM) – effective from January.
The association condemns what it views as the progressively expanding, burdensome, and complex nature of the European steel trade defense framework, stating that compounding restrictions on European manufacturing’s access to international steel raw materials “significantly reduces the competitiveness of the Union’s manufacturing industry in international markets, with structurally negative impacts on both the economy and employment.”
Assofermet calls on the European Commission to take “a more balanced assessment” of the EU’s steel trade protection framework and its influence on the “stability of the industrial supply chains,” and at minimum exempt existing import flows with arrival before 2025’s end from any imposition of retroactive duties.
The anti-dumping investigation covers CRC imports from India, Japan, Turkey, Vietnam, and Taiwan, China and was prompted by complainant Eurofer on behalf of EU steel producers. Eurofer provided evidence that CRC imports have increased in both absolute volume and market share, alleging injury to the EU’s domestic industry. As part of its complaint, Eurofer highlighted relevant export controls imposed on raw materials used in CRC production processes, which are not accounted for in international export prices, indicating market distortion.
European producers have preferred to focus on steel products other than CRC due to the low domestic margins premising the Commission’s investigation, McCloskey understands from conversations with market participants, seeing producers instead prefer to process value-added hot-dip galvanized (HDG) steel straight from their hot-rolled coil (HRC) portfolio. This deprioritisation of CRC alleviates additional energy costs inherent to cold-rolling processes and allows mills to weight their allocations to stronger margin products, important in a time of crisis for the wider European steel sector and the role played by high energy costs.
Market participants expect that potential new AD measures could have a significant impact on European importers and the attractiveness of international CRC, as trade protection for CRC has traditionally been limited to safeguard provisions without heavy AD or anti-subsidisation exposure.
The European Commission committed to replacing the EU’s steel safeguard mechanism – expiring in 2026 as per WTO rules – earlier this year with a long-term protective instrument in its Steel and Metals Action Plan (SMAP), with early proposals now expected in the first half of October. Under the SMAP the Commission also relaxed the legal threshold for the initiation of trade defense investigations to a “threat of injury” to better facilitate more proactive trade defenses, and has launched import monitoring tools for the bloc’s imports.
The European Economic and Social Committee (EESC) – which advises the Commission via consultation with industry stakeholders – released its official opinion on the SMAP 18 September, generally supporting the Commission’s “step in the right direction” but emphasising “that immediate action is required.”
Part of the EESC’s recommendations to the Commission and most relevant to wider AD investigations, is for a more selective application of the ‘lesser duty’ rule, and the introduction of a ‘melted and poured’ element across EU trade defence measures to better shield EU industry from global overcapacities and circumventionary evasion of its steel trade protections.
Benjamin Steven Journalist, Steel
