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The subject of European anti-dumping duties applied to cheap Chinese steel imports dominated discussions at the Eurometal: Iberia steelmakers and distributors conference last week in Porto, Portugal.

Darren O’Riordan, director general of China-owned steelmaker Ansteel’s Spanish branch, spoke during his presentation on Friday November 11 of the dangers of the EU’s recently applied trade barriers to Chinese products.

“Protectionism is good in the short term but not in the long term,” O’Riordan said. “[European] consumers should be careful.”

He argued that too much protectionism could effectively block all foreign imports and reduce the sourcing options available to consumers and distributors, making prices too high.

Since the beginning of this year, EU domestic ex-works prices in Southern Europe have risen to €440 ($477) per tonne from €290 ($315) per tonne for hot rolled coil (HRC), to €545 ($591) per tonne from €350 ($380) per tonne for cold rolled coil (CRC), and to €455 ($494) per tonne from €325 ($353) per tonne for steel plate.

Over the past few months, the EU has set anti-dumping duties on Chinese imports of HRC, CRC and steel plate, and it is speculated that duties on hot dipped galvanized coil (HDG) could be added.

As China attends to its own economic problems and tries to develop a more service-oriented economy, it has been dismantling domestic steel mills and plans to eliminate 100-150 million tpy of steel capacity over the next five years, at the cost of 400,000 jobs in the country, O’Riordan said.

Standing in front of a map of China’s “One Belt, One Road” economic development plan – which shows the country’s ambitions to forge new trade routes across Asia into Europe and Africa – O’Riordan explained how China was not focused on exporting basic steel to Europe but rather on expanding into much larger markets in Asia and elsewhere.

Nonetheless, many in the audience were in favour of the EU’s anti-dumping duties against China and found them to be helpful, if not a final solution to the woes of Europe’s steel industry.

“People emphasise [China’s] reduction in capacity, but production is what matters,” one delegate told O’Riordan during his presentation. “China is not reducing its production or its exports, and it’s not privatising either.”

Another delegate commented privately that, in order for a person to be a consumer, one first needed to have a job and an income.

A major point of contention when discussing European anti-dumping duties imposed against Chinese steelmakers is the support they receive from the Chinese government. Many, such as Ansteel, are state-owned.

China is expected to be granted market economy status (MES) by the World Trade Organization (WTO) after December 11, which would allow it broader access to the European market and would change the way the EU calculates anti-dumping margins against it.

On November 2, China asked WTO members to honour this impending change in regulation.

On November 9, however, in a move apparently directed at China, the European Commission proposed a revision to the methodology it uses to calculate anti-dumping margins even for MES member-states of the WTO, particularly in regard to under-priced imports from state-backed or state-owned entities.

Lorenzo Holt, Metal Bulletin

European trade defence measures against flat product imports could lead to a “… monopoly” of the region’s steelmakers whose recent price hikes are not justified by demand, according to Slawomir Boliglowa, chief executive of Polish service centre and distributor Maxstal.

Already-imposed anti-dumping duties on China have stopped imports from there of hot and cold rolled coil, and plate, while duties are also expected soon on imports from Brazil, Iran, Russia, Serbia and Ukraine. “This will lead to a complete closing off of the European market for cheap product from the East,” Boliglowa tells Wirtualny Nowy Przemysl.

“We supported mills’ actions designed to strengthen the European market, but it seems to us that such a strong limiting of imports will cause a monopoly of European steelmakers, who are already increasing prices from month to month,” Boliglowa says in the interview monitored by Kallanish. “This [… price increase] is justified neither by the level of demand, which remains stable or is very slightly increasing, nor by raw materials prices.”

European mills’ plans to charge €500/tonne for hot rolled coil and €600/t for CRC in the first quarter next year signal a return to the high prices of 2007/08, he adds.

Duties on feedstock products could lead to increased imports of finished products such as pipe and profiles from Russia or Turkey, which would be a “… huge threat” to Europe’s distributors and service centres, according to Boliglowa.

“If imported finished profiles are cheaper than the sheet sold in our market that’s used to make them, then it would be an unprecedented threat to service centres,” Boliglowa observes. “In this situation mill-owned distributors will be at an advantage as they’ll have easier access to product direct from the producer.”

Maxstal is installing a new 30,000 tonnes/year cold-formed sections mill at its site in Krakow, with production expected to start by the end of March 2017. The new line is seen increasing the firm’s shipments by 25%.

German headquartered hot rolled and stainless bar specialist Böllinghaus Steel has appointed Brazilian stainless steel distributor Metalinox Cogne Aços Inoxidáveis for the distribution of its entire product range, a note said on Böllinghaus’ website.

The companies worked together in the past and “the consequent logic step was to officially enter the distribution partnership,” the note said. “This agreement enables both partners to grow further in a particularly challenging market,” said Böllinghaus, without specifying the regional coverage.

Located in Hilden, Germany, Böllinghaus specializes in the distribution of stainless steel long products and has its own production facilities in Portugal.

As reported earlier this year, Outokumpu appointed Böllinghaus Steel as a distributor for its cold drawn and hot rolled bars in hexagons, squares and flats covering Europe (excluding Germany and UK), APAC and Latin America. In January, Böllinghaus Steel established a sales office in Chicago, US, to cater the NAFTA market.

Böllinghaus Steel declined to provide further information when asked by Platts.

Laura Varriale, PLATTS

The European wire rod market is still subject to pressure from competitive imports and overcapacity, resulting in a focus on higher value products as the key opportunity for profitability in the market, Javier Alvarez-Linera Prado, of ArcelorMittal long products Southern Europe, said at the EUROMETAL Steel Net Forum Iberia in Porto Friday.

Prado said ArcelorMittal will focus on high value wire rod products in a bid to improve profitability, as the overcapacity in lower quality wire rod is expected to continue. Furthermore, increases in raw material prices are expected to squeeze margins more and imports could still continue to plague the sector, he added. “We need to go beyond traditional drivers,” he said, citing improvements in productivity and more value added products as alternatives.

He pointed to positive growth in the automotive and construction sectors as representing potential opportunities for growth in wire rod.

However, risks remain for the product over the next few years. Europe’s wire rod market currently has a 25 million metric ton installed capacity, with apparent consumption standing at only 15 million mt. This 10 million mt excess in capacity, coupled with rising imports, and a decline in exports owing to issues in Algeria, threatens the construction steel product, he said.

“If we still have overcapacity, plus imports, we will continue to be punished.” He said energy costs, particularly in southern Europe, pose further challenges — in that region energy costs account for 40% of overall production costs, compared to 25% in Germany, he noted. “We are competing on unfair ground with other countries,” he said.

In terms of curbing imports he urged the EU markets to come together and take advantage of proximity. “We don’t need commercial barriers but what we don’t want is unfair competition,” he concluded.

Erica Sesay, PLATTS

The steel sector in the Iberian peninsula will face various challenges in the coming year, industry executives at the EUROMETAL Steel Net Forum in Porto, Portugal, said last Friday. While ongoing issues such as lackluster demand and over-capacity are expected to persist, other challenges are likely to arise in the coming year, they said.

Mergers and acquisitions, plus anti-dumping measures are expected to be prominent in the European steel industry in 2017 but prices are not expected to increase sharply, speakers said. Carlos Vieira of Spain’s Gonvarri Steel Services told attendees that any consolidation would lead to the reduction of sourcing options for steel distributors, an issue which could be made worse by a spate of protectionism barriers expected next year.

The ongoing issue of Chinese over-capacity was, once again, a topic of discussion. Jens Lauber, ceo Tata Steel Distribution Europe and president of EUROMETAL, said: “overcapacity in China is a key factor to the destabilisation of the EU market,” adding that “EU producers are clearly in survival mode.”

The idea of generating value, as mentioned by other speakers at the meeting, was reiterated as a key strategy in improving profitability in the midst of the challenges ahead. “Europe needs a complete and strong value chain, with all participants to play their roles for value generation,” Lauber said.

Economic challenges are also looming, participants said. Fernando Pinto, president of Açomefer, the Portuguese association of wholesalers of steel, metals and tools, noted that the growth of Spanish and Portuguese GDP was positive in 2015, but that 2016 forecasts are negative, with Spanish growth receding to 3.1% for 2016 and Portugal’s expected to decline by 1.3%.

A further 2.2% decline is forecast for Spain in 2017, while an uptick of 1.6% is expected for Portugal in 2017.

Erica Sesay, PLATTS