EU safeguard system changes come into effect

The European Commission has published the final document related to the review of the safeguard system for steel imports. As anticipated by Kallanish, the new amendments will come into force from 1 July, with some important changes in particular to the way tariff-free quotas are allocated.

Firstly, the Commission has changed all country-specific quotas to be managed quarterly, in order to avoid overcrowding of imports. This is set to dramatically change the flow of imports for some key products, as last year some country-specific annual quotas were exhausted during the first week of becoming available.

Hot rolled coil quotas will also be moved from general to country-specific, further limiting the possibility of large importers taking major advantage of allocations. With the new changes, Russian suppliers will have the largest share of HRC import quotas, despite being subject to AD duties, followed by Turkey and India. With the country-specific rule being applied, Turkey and India, for example, will see their available quotas falling below the average sold in Europe during the last two years.

Stainless steel HRC quotas will conversely be moved from country-specific to global.

The Commission will then split the quotas for large welded tube into a global allocation for material used in engineering projects and a country-specific quota system for material not used in engineering.

In addition, important limitations will be applied to the use of residual quotas during the last quarter by countries that already have a country-specific allocation.

Finally, the Commission has also reviewed the list of countries included in the measures.

As is often the case in these matters, the final decision from the EC seems to have left most market players dissatisfied. While steel consumers asked in vain for the Commission not to put new limitations on importers, European steelmakers association Eurofer’s request to drastically cut tariff-free quotas for a period of time also went unheeded.

“We have seen a collapse of 50% in EU steel demand since March, but the tariff-free import quota has been further raised,” says Eurofer Director General Axel Eggert. “Objectively, this makes no sense. We had expected a clear decision for European industry. This did not happen. The resulting marginal technical changes may help one or other steel product group but most of our industry has been left in the cold.”

“We are ready and willing to sit down with policy makers with an open mind in order to develop a way forward for our sector and the downstream sectors it services,” he continued. “The result of the revised safeguards is a major upset, and the EU must still find ways and means to avoid further closures and job losses in the European steel sector.”