June 8, 2020 / 5:22 PM / a month ago

European steel industry calls on EU to cut import quotas

LONDON (Reuters) - European steel producers on Monday urged the European Union to slash import quotas, warning a potential flood of shipments threatened an industry already hard hit by the COVID-19 pandemic.

FILE PHOTO: A crane lifts up a steel coil at the storage and distribution facility of the steel plant of German steel maker ThyssenKrupp in Duisburg, Germany, January 30, 2020. REUTERS/Wolfgang Rattay/File Photo

In a statement, producers criticised recent proposed adjustments to safeguard measures the EU put in place in 2018.

Those measures had sought to guard against shipments redirected to Europe after Washington’s imposition of 25% steel tariffs closed the U.S. market to many exporters.

“The European steel industry’s survival is at further, serious risk because the (European) Commission’s steel safeguard review proposal does not consider the sharp collapse in demand,” said the letter distributed by industry group Eurofer.

EU Trade Commissioner Phil Hogan said in April the EU would guard against a potential massive stockpiling of steel that could then flood the EU when demand returned.

But Monday’s statement by producers said the safeguard measures did not allow for changed circumstances and demanded the import quota be “reduced considerably”.

Steel demand has tumbled by 50% since March and 40% of the EU steel workforce have been laid off or are working part-time, it added.

“We request a tariff-free quota size that reflects actual market conditions,” the statement said.

Under the safeguards, quotas for 26 grades of steel, including stainless, were set at the average of imports in 2015-2017 plus 5%, with a 3% hike last year. Imports beyond the quotas are subject to a 25% duty.

Among those signing the statement were executives of top global producer ArcelorMittal (MT.AS), Tata Steel (TISC.NS), ThyssenKrupp (TKAG.DE) and Salzgitter (SZGG.DE).

Reporting by Eric Onstad; Editing by Mark Potter

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