Trade Cases

HRC Antidumping Investigation in Europe May be Expanded

May 26, 2016

According to a report by Platts, Eurofer has petitioned the European Commission to expand its AD investigation into imports of HRC from China to include HRC from Turkey, Russia, Brazil, Iran and the Ukraine.

Charles de Lusignan, Communications Manager for Eurofer, said he could not confirm or deny that report. It is Eurofer’s policy not to comment on ongoing trade cases until provisional duties are imposed, he said.

The inclusion of additional countries may be in response to steel products being diverted to the EU as a result of trade actions in the US and elsewhere.

RBC Capital Markets analyst Ioannis Masvoulas said expansion of the trade case could benefit European steelmakers.

“If confirmed, we see this as an incremental step forward, which should improve sentiment and underpin European HRC prices,” said Masvoulas.

Eurofer, the European Steel Association, has been outspoken on the need to curtail China’s steel overcapacity and stem the tide of Chinese steel exports to the EU. Earlier this month, Eurofer welcomed the European Parliament’s vote highlighting reservations against granting China market economy status.

“The message from the European Parliament has been abundantly clear,” said EUROFER Director General Axel Eggert. “A significant majority of MEPs do not believe it is the right time to grant China Market Economy Status. China is not a market economy, and thus cannot be treated as such for the purpose of anti-dumping investigations.”

Eurofer noted that 16 of the 37 antidumping measures currently in force on steel involve China.

In a statement preceding the May 26 G7 meeting, Eggert commented on letters to G7 countries from AEGIS Europe, a group of 30 European associations representing a variety of manufacturing industries.

“We, the regional steel associations, urge G7 governments to take steps to work together to address the current global steel overcapacity situation and to act against countries which do not respect market economy conditions. The present circumstances are severely negatively affecting economies, industries and workers around the world. It is vital that there is coordination between governments of steel-producing economies and an ongoing commitment to dealing with global overcapacity, as well as to establish market economy conditions without state control and subsidisation of domestic steel producers. If global overcapacity borne of state-supported enterprises’ uneconomic operations continues it will threaten the survival of efficient companies operating in environments with little-or-no government support.”

“It is clear that China is the root cause of the problem, with a built up of 50% of global steel capacity in 2015 compared to 15% of total global capacity in 2000. China’s state planning has led to up to 400 million tonnes of steel overcapacity in the country, this alone is more than two and a half times of total EU steel production.”

“As part of AEGIS Europe we reiterate that China cannot and should not be granted the coveted Market Economy Status (MES) until such time as the country becomes a market economy. t present, the People’s Republic only meets 1 of the EU’s 5 established MES criteria. China’s WTO accession protocol – specifically, Article 15 – does not grant automaticity to the use of a standard methodology in anti-dumping calculations after December 2016. Rather, the onus will continue to be on sectors to prove that they operate under market economy conditions. For a sector such as the EU steel industry, which is facing mountainous levels of dumping of excess production from China, it is clear that the market economy does not yet prevail. China cannot be granted MES until the relevant conditions have been met.”