The European steel association Eurofer is unlikely to have its proposed 75pc reduction of the EU’s import safeguard quota approved, and any change is unlikely to take effect before the July review is concluded, market participants said.
Some even suggested that the European Commission has already rejected the request. “It is too soon to say: after all the review only ends in July,” a spokesperson for Eurofer said.
Market participants said that a revision of the safeguards could still happen after the safeguards review in July is concluded, but in tune with the reduction in EU steel consumption due to the Covid-19 pandemic, which is still not clear. This would echo the commission’s decision in the previous review in September 2019, when it tightened the yearly quota increase from an initial 5pc to 3pc amid declining EU demand over the year.
“It [the 75pc reduction] goes against the very nature of the present measures and the safeguard instrument does not have a flexibility mechanism allowing for such a drastic change,” one participant said.
Eurofer in early April requested that the quotas be amended for a six-month period in light of the pandemic, which has seen the EU steel sector in many countries come to a near halt, amid production cuts and end-user stoppages.
The letter prompted Italian steel and scrap association Assofermet and the European Non-Integrated Wire Rod Processors Association (Eunirpa) to urge the European Commission to not tighten the safeguard measures. “An additional level of protectionism would only create an artificial price increase of steel in the EU market, allowing EU steel producers not to follow the innovation path and to sit on granted profits,” Assofermet said.
“Eurofer’s requests are regrettably nothing less than an extraordinary attempt to use the temporary economic downturn resulting from the current sanitary emergency situation in order to continue, undisturbed, its aggressive downstream integration strategy at the expense of the non-integrated EU downstream steel industry,” Eunirpa president Kris Van Ginderdeuren said