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EU safeguard revisions: steel market continues to struggle

EU safeguard revisions: steel market continues to struggle

EU safeguard revisions: steel market continues to struggle

In July 2018, the EU issued steel safeguard measures in the wake of the US’ decision to impose a 25% tariff on all steel product imports in the United States, causing massive deflection of steel volumes to Europe.

EUROFER (representing the entirety of steel production in the European Union) doubted the effectiveness of such measures due to a series of weaknesses, as pointed out here.

Because of this, on 27 September 2019 the EU has implemented its revision of the steel safeguard, which should stabilize trade flows by containing import concentration from selected exporting countries. Despite the efforts, a vast portion of the market is still not happy with the outcome.

Axel Eggert, General Director of EUROFER, claimed that a big share of the steel sector is being squeezed by unstable import pressure that will not diminish in spite of these changes.

The European steel industry has been suffering a series of setbacks since the 2007-2008 economic crisis. Moreover, dumping from several countries, global steel overcapacity, and rising climate compliance expenses have also compressed margins across the field.

Mr. Eggert continued, “Steel is at the heart of the EU economy, and it is under threat because the current defending means are incomplete. We need further revisions, and we would welcome a Carbon Border Adjustment to help industries to keep up with foreign competitors that do not have to comply with such strict climate constraints, namely Turkey, Russia, and China. Steel prices have slumped, even as costs continue to rise.”

“Worldwide production growth is not keeping pace with global steel overcapacity. We need both efforts at home and abroad to repel the effects in Europe. The G20’s Global Forum on Excess Steel Capacity must continue its efforts so that countries such as China, Indonesia, Iran, Russia, or Turkey stop overflowing the market”, concluded Mr. Eggert.

Photo by worldsteel / Javier Bernal Revert

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Monday, October 21, 2019