European steel traders’ association Eurometal has written to EU Trade Commissioner Valdis Dombrovskis suggesting he take into account price developments in steel markets over the past 18 months when reviewing the current steel safeguard, which expires in June.
Steel users and steel consumers need help from the Commission
“Once more, we need the Commission to assist and care about the steel users and steel consuming industries. There will be no market for the steel production if there is not a market of consumers. There are thousands of small and medium size companies that look for free competition to defend their products and know how. We are talking about employment on manufacturing across Europe, which depends very much on all these medium and small size companies. Let’s produce locally, let’s generate value in Europe,” says the letter, signed by Eurometal president Fernando Espada and managing director Daniel Guinabert. It follows a letter from 12 European member states – supported by Eurofer – calling for a review and extension of the safeguard measures.
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- Eurometal calls on EU to “take care of steel consumers”
Hot-rolled coil prices up almost 50%
Since June 2019, the benchmark index for hot-rolled coil (HRC) in the northwest of the EU has risen from €476/t to €707/t, Argus reports in a recent news release. This represents an increase of €231/t, or almost 49%. Since September 2021, demand has exceeded production by European producers. This has led to enormous price jumps in recent months. According to Argus, the index has risen by €309/t since June 2020.
Lack of steel imports into the EU
The surge in demand and weaker supply have been exacerbated by a shortage of imports into the EU in recent months. Eurostat data show that only about 257,000 t of hot-rolled coil was imported into the EU in November 2020. This is the lowest import volume in almost 8 years.
Many countries cannot import to the EU
The Covid-19 pandemic had a strong impact on the European industry, which meant that local prices were lower than those in the rest of the world, reducing import demand over the summer. At the same time, a number of regions are unable to sell to Europe due to anti-dumping duties – China, Russia, Brazil, Serbia and Ukraine all have tariffs keeping volumes in check. Turkey now has a provisional dumping duty, while the duty on Severstal, the only Russian producer that can still sell HRC to the EU, is under review following petitions from Eurofer.
Service centers unable to meet demand
At the same time, service centers point to the current spreads for blast furnace raw materials which are at a record high. Some European smelters have reduced their risk by focusing recently on the booming North American market, while limiting contractual tonnages for domestic purchasers. Service centers argue that they should be able to source the tonnages they need from domestic producers because they are protected from third-country tonnages.
Source: Eurometal.net, argusmedia.com
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