“It will then be possible to import steel products into the EU market from July 1, 2024 onward without any restrictions by tariff quotas, which will likely drive up import volumes,” the steelmaker said in last week’s second-quarter earnings report.
EU steelmakers have in recent months voiced fears over the potential expiration of safeguard measures in mid-2024, with the EU’s Carbon Border Adjustment Mechanism (CBAM) due to come into full force only on 1 January 2026. This would leave an 18-month gap that would see the EU’s market unprotected, Kallanish notes.
According to WTO rules. safeguard measures can be implemented for a maximum of eight years and then must be rescinded for the same duration as they were applied before they can be re-applied.
Their renewal is likely to depend much on whether the EU and US can agree a steel trade pact, the Global Sustainable Steel Agreement (GSSA), which is currently under negotiation. If no deal is agreed by the October deadline, the US could reapply Section 232 duties on EU steel. “The various negotiation positions are currently still very far apart, which makes arriving at a consensus by October 2023 difficult. The loss of preferential market access to the US would considerably hamper exports again,” Salzgitter says.
As for the EU’s sanctions on Russian steel, importing steel products of Russian origin processed in non-EU countries will be prohibited as from October 2023; importing semi-finished products will no longer be possible starting with October 2024.
“Risks arise from the new sanctions to the extent that the long transition periods through to autumn 2024 continue to facilitate Russian steel imports that are frequently offered at prices significantly below the customary market price level. Owing to the complexity of the directive and the difficulty in its implementation, this risk continues to prevail and may lead to distortions in the market on the back of low prices for Russian steel products,” Salzgitter observes.
The German steelmaker saw shipments drop 3% on-year in the second quarter to 1.32 million tonnes.
Adam Smith Poland