(Adds OECD figures)
* Provisional duties one step in EU investigation
* European steel industry body says measures needed
* OECD figures show Iran a rising steel power
By Barbara Lewis and Georgina Prodhan
LONDON/FRANKFURT, March 29 The European
Commission has decided it will not impose provisional duties on
hot-rolled steel from Brazil, Iran, Russia, Serbia and Ukraine,
but could still find the countries have breached rules on unfair
competition, industry sources said on Wednesday.
The EU executive has a deadline of April 7 to announce
whether it is imposing provisional duties on the steel after
complaints it is being sold into Europe at unfairly low prices
that make it hard for EU manufacturers to compete.
The sources, speaking on condition of anonymity, said the
Commission had decided against provisional duties, but that is
only one step.
The Commission had no immediate comment.
Eurofer, which represents the European steel industry, says
duties are necessary to protect a sector that is only just
recovering from a steel price crash in 2015.
"If the Commission does not tackle excess production beyond
China, it exposes our sector to the destructive forces of global
excess capacity in steel," Eurofer said in a statement.
Any decision not to impose duties on hot-rolled flat
products, used in construction and machinery, from Iran and four
other countries would be incomprehensible, it added.
Historically, Eurofer has been most concerned about China,
the world's biggest steel producer, but now China has begun to
rein in its output and Indian expansion is beginning to slow, it
says a new threat is from Iran.
Iran has ambitious plans for a sector it hoped would supply
a growing domestic economy following the easing of international
But a deal in 2015 in which Iran would curb its nuclear
programme in return for a relaxation of sanctions, has had less
impact than foreseen as foreign partners have struggled to find
financing that does not conflict with continued U.S. strictures.
A report by the Organisation for Economic Cooperation and
Development, seen by Reuters, said steel capacity had continued
to expand in 2016, rising by 1.4 percent from 2015 to reach 2.39
billion tonnes globally.
Iran stood out, with 19 Iranian new capacity projects
between now and 2019, for a total of nearly 24 million tonnes of
extra capacity in addition to an estimated 28 million tonnes
achieved so far.
However, there could be obstacles as international companies
struggle to overcome the challenges of financing.
According to the OECD report, in China, steelmaking is
stabilising at around one billion tonnes per year and there are
indications it has exceeded a goal to reduce capacity by 45
million tonnes in 2016, as part of a 100-150 million tonne
closure target up to 2020.
Capacity in India reached 125.8 million tonnes per year by
2016, up from 56 million tonnes 10 years earlier.
However, the rate of expansion is expected to slow. For
instance, the OECD said Tata had postponed 3 million
tonnes per year of new capacity initially expected to become
operational in 2016.
(Editing by David Evans)