European mills disappointed by EC safeguard review

European steelmakers are dissatisfied with the results of the European Commission’s steel safeguard review, which they suggest does not account for the crisis environment caused by Covid-19.

Many of the measures lobbied for by the European steel association (Eurofer) on behalf of its steel-producing members were unacceptable to the European Commission.

The drastic temporary quota reduction requested by Eurofer was dismissed by the commission, which viewed the 75pc request as an import ban that could provide direct price control to domestic producers.

It also lacks the legal ability to alter the quota volumes originally allocated, although it has almost halved the amount of Turkish material that can be imported through its country-by-country quota. Overall quota volumes were almost untouched, besides the theoretical limits imposed on hot-rolled coil even these allow countries not included within the scope of the review to sell abundant tonnages into Europe.

Countries without their own specific quota are not limited to 30pc of the quarterly other countries quota for any period, despite large exporters being able to access only 30pc of the residual quota in the last period. European mills had hoped this percentage cap would also be reduced, or that large sources would have no access to the quota.

The commission also refused to reduce further its quota liberalisation from 3pc to 1pc, as requested by Eurofer, or to prevent rollover of unused quota from one period to the next. This in effect means that should importers have cargoes arrive that could be hit with a 25pc tax, they can hold them over and clear customs as soon as the new quota opens.

Legally, the safeguard is intended to avoid market-disruptive import increases and deflection that injure the union industry, rather than help cope with a demand depression, although it did state that Covid-19 and its impact was within the purview of the review.

Eurofer recently held a call to discuss its unanswered and unaccepted views with members, and member states are set to vote on the commission’s proposal on 12 June. Should they reject the proposal, it would mean business as usual, with safeguards functioning as they have been since the previous review in September 2019.

By Colin Richardson