European steel federation Eurofer has welcomed the adoption by EU member states of the European Commission’s proposal to continue steel safeguard measures, saying it supported the stability of the EU steel market and ensured smooth supply flows.
In a statement June 8, Eurofer Director General Axel Eggert said member states’ “massive support” for the continuation of the safeguard action would bring “stability to the EU steel market while avoiding excessive, market-disrupting steel imports from third countries.”
However, European importers of hot-rolled coil told S&P Global Commodity Insights previously that the proposed amendments in EU steel safeguard measures for finished steel imports were unlikely to bring changes to the market and to reflect trade flow concerns.
Domestic prices for HRC have been declining in Europe since the second half of March due to weak demand. Platts daily assessments for HRC in Northern Europe declined to Eur950/mt ex-works Ruhr on June 8 and in Italy to Eur890/mt ex-works, down 3% and 6% since the start of 2022, respectively, according to S&P Global Commodity Insights data.
After an annual safeguard review, the EC sent a draft of proposed reviewed safeguard measures to the World Trade Organization on May 30, which said it planned to introduce global quotas for some products and prolong steel safeguard measures to 2024.
The document indicated that county-specific quotas will remain in place, but global quotas will be introduced for some other products, including heavy plate, in light of the impact of the Russian invasion on the Ukrainian steel producing and exporting industry.
Eurofer added that the EC had also confirmed that the recent change of the US section 232 import tariff of 25% into a tariff-rate quota for the EU had little to no impact on the functioning and rationale of the safeguard measure.
In the proposal, the yearly quota volumes were increased to 4% from 3%.
“Over the lifetime of the safeguard action, consecutive yearly liberalization has pushed up quota levels way above the demand situation, which has not recovered yet from the COVID-crisis,” Eurofer said
“This gap will now be further increased,” Eggert said, adding that there was no economic need or legal obligation for such an increase.
The EC is scheduled to officially release the safeguard details by June 30, effective for one year starting July 1.
— Jacqueline Holman