The European steel market is visibly suffering from the massive reprisals of the EU Safeguard measures. What was intended as protection for European steel producers is rapidly becoming a stab in the back for the steel processing downstream industry.
Safeguard: stab in the back for the EU downstream industry
More and more European associations of the steel processing industry and companies are therefore calling on the European Commission to end the measures.
It is becoming more and more obvious how much damage Safeguard has done to the EU industry and how only the protected and subsidized EU steel producers benefit from this measure.
Now ISTA (The International Steel Trade Association) and CAIR (Companies Against Import Restrictions) have also sent letters to the EU Commission.
CAIR: European traders join forces to protest extension of EU safeguard measures
Independent steel traders in Europe have joined forces to protest the extension of safeguard measures on 26 steel product categories, sources told Fastmarkets on Tuesday, March 16.
Companies Against Import Restrictions (CAIR) fights EU protectionism
A consortium of 33 mostly medium and small companies associated with steel trading and processing have formed Companies Against Import Restrictions (CAIR) to fight protectionism in the European steel market.
CAIR unites steel importers and users ” who oppose the safeguard measures on imports of non-alloy wire (product category 28),” a CAIR member told Fastmarkets.
End safeguard measures as soon as possible
“In the ongoing review of the safeguard measures, we ask the [European] Commission to remove these measures as soon as possible…. to restore a normal business environment and [to ensure] a return to fair competition,” he told Fastmarkets.
EU steel buyers very concerned about possible Safeguard extension
The EU Commission recently began looking into a possible extension of measures against 26 steel product categories, sparking fears among European purchasers that the safeguards, which expire on June 30 this year, could be extended.
EU steel market participants said steel import volumes are already at “historic lows” and therefore an extension of the safeguard measures makes no sense.
Structural shortage of wire rod products in EU
Wire rod imports to the EU have been declining since 2018, despite a structural shortage of the product in the European market, sources added.
And the shortage of wire rod has been one of the main factors leading to recent historically high prices, sources told Fastmarkets.
“We need to diversify our supply sources to get wire rod at competitive prices to ensure uninterrupted industrial activities,” a European buyer said.
ISTA proposes one-year ‘protective vacation’ on quotas amid steel shortages in Europe
The International Steel Trade Association (ISTA) has proposed lifting import protection quotas for 12 months from July in light of the current shortage of steel and stainless steel materials in Europe. This is according to a March 18 letter from ISTA to the European Commission. S&P Global Platss reports this on its website.
The letter is in response to the EC’s current review of the protection quotas, which are set to expire at the end of June.
ISTA on Safeguard: quota system not only unnecessary, but distorts trade flows
“The last six months provide a strong case for the view that the quota system is not only unnecessary but its inflexibility has contributed to price hikes, shortages, and an uneven flow of supply as shipments are held or advanced according to quota availability: the very distortion in trade flows which the measure claimed it would avoid,” ISTA said in the letter, which was viewed by S&P Global Platts.
The association said the Safeguard Holiday could be reviewed if circumstances change. Buy-side sources interviewed by Platts supported the proposal as they scramble for material.
EU steel mills insist on Safeguard extension
“The EU steel safeguard is a factor of stability in a volatile market,” European steel producer association Eurofer told Platts. “The quotas were not reduced when demand collapsed in spring last year when the Covid-crisis broke out, neither are they to be increased or eliminated now. The quotas are not a tool to micro-manage volatility in the market. Instead, they have a preventive function looking at the risk of trade disruption because of global excess capacity and within this context the deflection pressure caused by US S232.”
EU Safeguard measures applied to 26 product categories since 2018
The EU imposed safeguard measures on 26 product categories in July 2018 after steel imports surged in 2017-18 and the U.S. imposed Section 232 duties on steel imports in March 2018, causing trade diversion. With Section 232 set to remain in place for now – despite consumer groups protesting against it – the European Commission will have to make a decision on how to adjust the safeguard measures. The investigation was requested by 12 EU member states.
- EU SAFEGUARD MEASURES: CALLS FOR IMMEDIATE END GROW LOUDER
- Orgalim calls for end to EU Safeguard measures
- End Safeguard now: ISTA and CAIR write urgent letters to EU Commission
- European steel users urge EU Commission to end threat of safeguard measures
- Gerber Steel GmbH urges end to EU Safeguard measures
- End for EU Safeguard: Assofermet calls on EU Commission to end market protection measures
- Automobile manufacturers’ association Anfia calls for end to EU Safeguard measures
- Eurometal calls on EU to “take care of steel consumers”
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