The European Commission notified the WTO in recent days of its intention to extend the Safeguard measures on steel imports for another 24 months by imposing an extremely low ceiling on imports from some countries. An unprecedented threat to the competitiveness of steel-using companies.
There could be a shortage of 1.63 million tons of steel under the new version of the Safeguard measures notified last week to the WTO by the EU Commission. A shortage of these steel volumes would have catastrophic repercussions on lots of traditionally steel-devouring sectors: automotive, construction, mechanical engineering and all European manufacturing using this raw material.
European companies would lose further competitiveness after already experiencing years of severe restrictions on steel imports.
The numbers speak for themselves: according to the Commission’s notification, a 15 percent cap will be placed on imports of HRC from every country included in the “Other Countries” quota of the safeguard as of July 1, 2024. Vietnam, Japan, Taiwan and Egypt, which are the countries in this quota that export the most HRC to the EU, sold 3.9 million tons in 2023.
Assofermet analyzed the data, formulating a projection for 2024 on how the import of this product would change with the proposed renewal.
The annual flow from the four countries would reach a maximum of 2.26 million tons imported, effectively wiping out 1.63 million tons of steel.
This would be a debacle that would irreparably impact the entire European manufacturing industry, which, moreover, is already grappling with a worrying consumption crisis.
These are steel grades that are not available in sufficient quantities in the European Union. For this reason, imports are necessary in order to guarantee the system the supplies it needs.
Added to this is the overlap with the CBAM, another measure that will increase steel costs: if no changes are made, the two measures will remain in effect at the same time for the first six months of 2026.
“This is the worst scenario we could have expected from the extension of the Safeguard measures,” commented Paolo Sangoi, president of Assofermet Acciai. “Maintaining the Safeguard for another 24 months implies an overlap with the CBAM, destined to generate de facto double taxation. If we add to this the various changes that the Commission envisages, Assofermet’s position can only be firmly against its final approval. The 15 percent cap on imports of HRC from each country included in the “Other Countries” quota runs counter to the very nature of the rule, which is to maintain historical import flows. About this, it’s necessary to mention that the historical flows of the three-year period 2015-2016-2017, to which the rule refers, should be updated. Compared to that period, the scenario has changed a lot: many countries that were once exporters to the EU today are no longer present as suppliers because they are under embargoes, under sanctions or simply because they find it in their interest to allocate their steel elsewhere.”
The consequences of the Safeguard on the market are well known to operators: uncontrolled increase in raw material costs due to duties, unavailability of goods already landed waiting for customs clearance at the opening of the next quarter, financial strains for all importers, clogging of port terminals with related disruptions of service by shippers, who are forced to operate in precarious situations. “It is of paramount importance,” Paolo Sangoi continues, “that the European Commission becomes a guarantor of the steel supplies that European manufacturers need. The success and future of our economic system is also guaranteed by the consumption generated precisely by the steel-using industry.”
Assofermet is active with the Italian and EU institutions and has given full readiness to explain again the serious implications resulting from the approval of the rule as notified to the WTO.
