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EU plans to cut steel import quotas after industry protests

EU plans to cut steel import quotas after industry protests

News is brought to you by Mr. Shailesh Karia

Published on date 19th August 2019.

LONDON (Reuters) - The European Commission has proposed boosting measures to protect against a rise in imports spurred by U.S. tariffs after steel companies said the European industry was under threat.

The Commission said in a statement on Wednesday it planned to cut an increase in import quotas to 3% from 5% effective from Oct. 1.

In June, senior steel executives including from Outokumpu (OUT1V.HE), Salzgitter (SZGG.DE), and a division chief at ArcelorMittal (MT.AS), urged the Commission to scrap or postpone the 5% increase which took effect on July 1.

EU quotas had been set at the average level of imports in 2015-2017 plus 5%, with further 5% hikes on July 1 and a year later.

The EU steel industry in 2018 was hit by a 12 percent increase in imports of finished steel products in a market that grew by only 3.3 percent, industry body Eurofer has said.

The increase in imports happened despite safeguard measures designed to limit incoming steel following Washington’s 25% import tariffs, which have effectively closed the U.S. market.

The proposals will be discussed with affected World Trade Organisation members and submitted to EU members for approval ahead of the planned October implementation, the Commission added.

The Commission also plans to curb any one country of exceeding a 30% share of imports of hot rolled flat steel during a quarter.

This may impact Turkey, which has had a large share of imports into the EU, Jefferies analyst Alan Spence said.

“Most notably, Indonesia ... has lost its exemption for hot and cold rolled stainless products (in the proposals),” Spence added in a note.

“The capacity growth from Indonesia and associated influx of imports into Europe, particularly hot rolled, has consistently been noted as a pricing headwind for domestic producers.”

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