European Union likely to Impose Definitive Tariffs on Steel Imports: Reports
According to the latest reports, European Union (EU) countries are likely to approve a scheme to limit steel imports in the 28-nations bloc on 16 Jan’19.
Although in July 2018, EU had imposed provisional safeguards measures on the import of 23 steel products for 200 days i.e. till 4 Feb’19, the vote on 16 Jan’19 would put in place an effective cap on steel imports for three years i.e. till 2021.
The decision to restrict steel imports into EU has come following the U.S. government’s imposition of tariffs on steel and aluminum imports entering United States announced in March last year. This barrier by U.S. on steel imports has raised concern amongst EU steel producers that European markets could be flooded by steel products that are no longer being imported into the U.S.
In Jul’18 EU’s provisional safeguard measure on 23 steel products import implies quota set at the average level of imports over the past three years, with a 25% tariff applied if the quotas are filled. This temporary measure won widespread support from the majority of EU countries.
Now, according to the market sources, Commission’s proposal is similar to the provisional measures, although quotas would be set at the average of the last three years plus 5%. It has also set limits for major exporting countries. The quotas would apply for three-month periods in order to limit stockpiling and could be increased by 5% each year.
In total, 26 types of steel will be covered by the EU’s definitive measures, according to the commission. That compares with 23 product categories under the provisional system and 28 within the scope of the probe. The 28 products covered by the inquiry together account for around 40% of the EU’s annual iron and steel imports.
EU sees a surge in steel imports
The main exporters of steel to the EU are China, India, Russia, South Korea, Turkey, and Ukraine. However, in the first nine months of 2018 (Jan-Sep), imports from Turkey and Russia have increased the most- from Turkey by 57% and from Russia by 56% y-o-y basis.
In fact, in the third quarter (Jul-Sep) of 2018, Eurofer said that EU’s steel consumption had risen by just 0.6% but imports increased by 10%, meaning EU mills were at best only able to deliver the same amount of steel as last year. Imports make up some 25% of the EU market.
The end user segment in EU is completely against the tariffs imposition on steel imports. European auto manufacturers association ACEA called the measures protectionist and said they would harm its members. It added that steel exports to the United States had only dropped slightly and so little extra steel was being diverted to Europe.
source: SteelMint
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