Steel safeguard to avoid restrictive import drop

The European Commission’s definitive steel safeguard will provide an adjustment mechanism ensuring country-by-country measures for products already subject to anti-dumping duties do not lead to a restrictive drop in imports.

On products such as cold-rolled coil, hot-dip galvanised coil and rebar, where existing duties would prevent some countries fulfilling quotas, there will be an instrument to ensure security of supply. It is not yet clear what form this might take, but countries with restrictive duties already in place could gain access to average global quotas. Alternatively, the quota would somehow have to be redistributed among other countries.

“In the interest of users, there has to be a certain security of supply to the European market, giving importers and users access to the total volume they used to import duty free, even if it is from different destinations,” one source close to the commission said.

The commission yesterday extended its definitive nine-month investigation, which was initially due to lapse on 26 December. This is because of the complexity of the case and the amount of submissions and views it has received, but also as it does not want to fall foul of the World Trade Organisation (WTO) — those exporters receiving a country-by-country quota could complain to the WTO about the measures in certain instances.

For Turkey, which has seen its volumes surge this year because of the whack-a-mole effect of duties on the likes of China, a quota based on its 2015-17 volume may also be deemed unfair.

But domestic mills are acutely aware of the increase in Turkish shipments into the EU, and regularly say they have notified the commission. The quotas will still be based on 2015-17 averages, although the commission is monitoring the volume trends of this year.

The delayed definitive investigation had no impact on the structure of the hot-rolled coil quota. This will remain global and in line with the preliminary safeguard, although there is some debate as to whether it may be quarterly or annual. The commission’s declaration that its investigation will be completed by 1 February should see a seamless transition from the expiration of the provisional measures to the imposition of the definitive safeguard.