EU Distributors ask European Commission to adjust steel safeguard review process
EU steel distributors also reacted to an alleged set of proposals by the producers’ lobby to tighten steel safeguards.
On December 17, the Commission started a review of safeguard measures for steel amid industry concerns over demand contraction in Europe, Fastmarkets reported.
While the Commission did not comment on possible changes to safeguard measures, industry sources suggested that the review might involve a reduction in quarterly quota allowances for hot-rolled coil and the introduction of new individual quotas for certain origins.
The review process is expected to conclude by March 31, with any adjustments to the current measures expected to come into force the following month.
EUROMETAL outlined several points for the Commission’s consideration, including extending the deadline for submitting questionnaires regarding the review process.
Notably, the deadline for submitting is currently set at January 10.
“The deadline of January 10 for submitting questionnaires is too restrictive, considering the holiday season that spans late December and early January,” the letter reads. “Many of our members and stakeholders face significant challenges in gathering the necessary data and preparing their submissions within the given time frame.”
Another request the association made concerned the harmonization of customs rules across the EU.
“We propose that the review addresses the need for harmonized customs procedures across the EU to ensure fair and consistent application of the measures, in order to assess in this respect a level playing field,” the letter reads.
EUROMETAL also asked for some terminology clarification and proposed to the Commission to involve the association in the organization of a Steel Summit, a high-level event proposed by European steel industry association Eurofer in December.
The summit would involve the steel social partners, member states and high-level officials from EU institutions, with the aim of addressing the crisis in the European steel industry, Eurofer said in December.
Potential changes to safeguards
Eurofer has allegedly set out its proposals to the Commission for the safeguards review, according to an industry source familiar with the matter.
The alleged set of proposals includes:
- reducing the tariff rate quotas (to reflect the declining demand for steel in the EU);
- increasing the safeguard duty from the current 25% to possibly 32-41%;
- changing the allocation methods of quotas and setting a 15% cap on other product categories (similar to that already applicable for HRC and wire rod);
- removing the carry-over option from previous quarters and introducing more country-specific quotas instead of the residual ones;
- not granting new exemptions for developing countries in the final year of application of the steel safeguard measures.
Eurofer did not confirm this information when contacted by Fastmarkets.
“We cannot confirm the [set of proposals]; as of today, we haven’t sent anything yet to the European Commission,” a Eurofer spokesperson told Fastmarkets on Thursday January 9.
Even so, the news triggered immediate reaction among market participants, with the majority being against those measures.
“These trade barriers create additional uncertainty, which is not encouraging demand [for imported steel], so we can expect more demand for EU-made steel, and it’s safer [to book European steel],” a trading source in Europe said.
“Nobody can book 100% of imports or 100% of domestic [steel products]. We need diversified supply sources,” a distributor in Italy said.
