November 26, 2019 / 2:16 PM / 9 days ago

EU suspects Chinese steelmakers are dodging anti-dumping duties

BRUSSELS (Reuters) - The European Commission opened an investigation on Tuesday after finding evidence that Chinese steel producers are avoiding anti-dumping duties by slightly modifying the material they export.

FILE PHOTO: A European flag is seen outside the EU Commission headquarters in Brussels, Belgium November 6, 2019. REUTERS/Yves Herman

The European Union set duties in February 2018 of between 17.2% and 27.9% for imports of certain corrosion-resistant steels from China to counter what it said were unfairly low prices. (reut.rs/37G8pRa)

However, the Commission said on Tuesday it was now looking into whether Chinese producers had found a way to avoid them.

The EU often carries out investigations into cases of suspected circumvention. In some cases, products from countries such as China are shipped to another nearby country and then exported as if the product has been made there.

In the case opened on Tuesday, the Commission said that Chinese producers had increased exports of corrosion-resistant steel with thin oil coatings or with slightly increased carbon, aluminium or titanium content. The resulting product was slightly different, and so not subject to duties.

It said there was no economic justification for the slight product alteration other than the duties imposed in 2018. It added that significant volumes of such steel were coming into the EU at excessively low prices.

In its original investigation, the Commission had found that EU demand for the specific steel rose 25% to 9.3 million tonnes between 2013 and the 12-month period to Sept. 30, 2016.

In the same period, the price of imports from China fell much more sharply than the wider market, and their volume almost doubled, which increased their market share from 10% to 20%.

The value of the EU market was around 4.6 billion euros ($5.1 billion) a year at the time.

The duties apply to companies belonging to China’s HBIS group (000709.SZ), including Hesteel Co Ltd, and those of the Shagan and Shougang groups.

Reporting by Philip Blenkinsop; Editing by Kevin Liffey

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