EC safeguard quotas’ revision plans concern Europe’s steelmakers

European steelmakers remain unhappy with some aspects of the European Commission’s definitive steel safeguard measures that came into force on 2 February (see separate article). Their trade association Eurofer has outlined the major issue in question in a note sent to Kallanish.

Quota conditions for the definitive measures differ from those in the provisional measures, bringing concerns which Eurofer outlines in the note. The main worry for the steelmakers concerns the projected 5% increase in quotas from those in the provisional measures to those in the definitive measures, and a further planned 5% increase in July 2019.

The quota was originally set at 100% of the average import levels over 2015-2017.

“This ‘relaxation’ of the measures is completely out of step with the evolution of the steel market, which is expected to be flat in 2019,” says Eurofer director general Axel Eggert. “2016 and 2017 were joint record years, meaning the quota was already set at the maximum level reached in a global market suffering massive overcapacity and distortions in foreign producer countries”.

“In 2018 imports rose 12% over and above the record 2017 level, even as domestic producers’ deliveries grew by a paltry 0.6%,” Eggert adds “This future relaxation of the quota could see the door being opened to even greater surges even as the market is expected to be flat.”

Steel consumption growth is expected to rise by just 0.5% in 2019, according to Eurofer’s latest economic and market outlook (see Kallanish 1 February). “This means the rise of the quota to around 110% of actual historical imports is many multiples the growth rate of the market,” Eurofer adds. The association says that it is urging the EC to take into account actual market conditions at the time of the first revision of the final safeguard measures in July 2019.