Economy
European Union Adjusts Steel Safeguard Measures
Written by Laura Miller
June 14, 2022
The European Union is adjusting its steel safeguard measures, according to a document filed at the World Trade Organization.
The EU’s safeguard instrument is entering its fifth year of application. The liberalization rate, which is meant to progressively allow more import competition into the market while the domestic industry adjusts to it, had previously been set at 3%. With the changes, effective July 1, the liberalization rate has now been increased to 4% annually.
While the European Steel Association (EUROFER) has welcomed the proposed changes, it says the “consecutive yearly liberalization has pushed up quota levels way above the demand situation, which has not yet recovered from the Covid crisis.”
“This gap will now be further increased,” EUROFER director general Axel Eggert said. “However, there is no economic need or legal obligation for such an increase.”
With the ongoing situation in Ukraine, the European Commission is concerned of a potential shortage of supply in the EU, particularly for quarto plates and angles, shapes and sections. Ukraine has historically been an important exporter of those products, accounting for around 33% of the total quotas in both categories. Because of this, the EC has decided to remove the existing country-specific quotas and instead use a single quota for all origins.
The inclusion of Vietnamese hot-dipped galvanized sheet into the “all others” country category is likely to squeeze the Asian nation’s ability to ship the product to the EU. Some sources have already reported to SMU that the change is causing increased competition on the Gulf Coast, as Vietnamese tonnages are being diverted from the EU to the North American market.
The safeguard measures will remain in effect until the end of June 2024, when another review will take place.
By Laura Miller, Laura@SteelMarketUpdate.com
Laura Miller
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