European steelmakers’ association Eurofer is “happy” about EU steel safeguard measures being prolonged for another three years, association president Karl Tachelet told the audience of the Kallanish Europe Steel Markets conference on Wednesday.
Responding to those who claim the extension goes against free trade agreements and keeps the EU steel market overheated, Tachelet stated that, as a trade measure, the safeguard provides a safety net. This protects against market-disrupting trade deflection, primarily caused by US Section 232 measures.
“The function of the safeguard was never to micro-manage or respond to short-term tensions in demand, supply or prices. Rather, by designing liberalised tariff-free quotas, it has shown much restraint reflecting strict respect of WTO conditions and striking a balance between the interest of all operators,” he says.
The safeguard quota’s most ardent critics are European stockholders and end-users, and Turkish suppliers, whose share of European exports have declined considerably during the past three years. The former are claiming continuous low stock levels, despite the recovery of output in the EU, and a huge backlog with mills’ orders.
“We cannot bring enough steel and we have huge difficulties in supply and, therefore, customer satisfaction,” said Daniel Guinabert, EUROMETAL director general. Veysel Yayan, secretary general of the Turkish Steel Producers’ Association, said the extension is unnecessary as the market has already recovered in a big way and is balanced. The extension will keep EU steel prices artificially elevated and goes against the free trade agreement between Turkey and the EU, he added.
With the aim of rebalancing the market, safeguards allow users to deal with structural problems at the policy level, Tachelet said. “It is about capacity. We have fluctuations in demand leading to fluctuations in capacity utilisation, but structural excess capacity remains a problem,” he concluded.
