The Italian automotive sector has called on the EU to end safeguard tariffs on steel products instead of prolonging them. In a press release dated 10 February 2021, the automotive association Anfia criticised the difficulties carmakers face in sourcing steel, as well as the financial damage caused by recent steep price increases for flat products.
Avoiding an extension of Safeguard at all costs
The Anfia Automobile Association writes: “It is essential that, regarding the steel market, the extension of safeguard measures on imports of certain steel products into the EU, introduced in 2018 in response to US duties and due to expire on, 30th June 2021, is avoided at all costs. Under these measures, for 28 categories of steel products, grouped into three families (flat products, long products, and tubes), tariff quotas were introduced by country of origin and global tariff quotas per quarter, after which an additional duty rate of 25% is added.”
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The additional costs of Safeguard have become unbearable
Furthermore, the association states: “These are measures that involve additional costs that are no longer justifiable or economically sustainable for Italy’s manufacturing base. Considering that the socioeconomic crisis triggered by the pandemic has disrupted global macroeconomic patterns and led to a sharp reduction in consumption and production at a national level, the conditions that had led to its implementation have disappeared.”
Costs explode: Prices rise by more than $363 per tonne
Between June 2020 and January 2021, local car companies have also seen sharp price increases totalling more than €300/tonne ($363), with further increases forecast. Major European steel companies have been very slow to resume production after the initial impact of Covid-19, with lead times that are not compatible with the needs of the automotive sector, observes Anfia.
Serious imbalance between steel supply and demand
The lack of balance between steel supply and demand, already observed in 2020, as well as the low quantities of steel purchased by car manufacturers in recent weeks, are also a cause for concern for the association. The low supply is dangerously extending the delivery times of car manufacturers,” it says. In some cases, poor coil availability is not only doubling but tripling delivery times. This threatens carmakers’ ability to meet end-user demand and risks significant financial losses, Anfia says.
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