EU wire rod safeguard causes import imbalance: Eunirpa

European independent wire rod processors’ association Eunirpa has issued a release this week to warn that the import of processed wire rod products is increasing as a result of the stringent safeguard measures. The association notes that protectionist measures on downstream products could be the sole solution going forward.

“Eunirpa has repeatedly expressed concerns to decision makers, that the safeguard measures, which were supposed to regulate normal trade flows in the steel industry in general, are in fact causing severe disruption to the downstream steel processors and in particular to the independent steel wire rod processors,” the association says. “Now with the revised safeguard duties in place since the beginning of October 2019, Eunirpa is increasingly facing competition on downstream products from third countries.”

According to the association, non-EU producers of wire rod are reacting to the limitations of the quotas by integrating their production downwards. They are selling more galvanized wire, fencing products, spring wire and black annealed wire to Europe, for example. These are also being sold at very low prices, Eunirpa president Kris Van Ginderdeuren says.

“Eunirpa members are seriously considering to resort to anti-dumping and other trade protection instruments in order to protect their presence in the EU. A task force has been created to monitor imports and evaluate market developments in this respect,” the association says.

Kallanish notes that in addition to creating distortions to the downstream supply, the safeguard measures on wire rod have exacerbated volatility in the flow of import volumes. This has the effect of concentrating orders when new quotas become available, then halting imports for a full year as soon as the quotas are exhausted.