CRU: EU Measures to Mitigate Section 232

CRU: EU Measures to Mitigate Section 232

PR Newswire

LONDON, April 12, 2018

LONDON, April 12, 2018 /PRNewswire/ --

To protect the European steel industry from an anticipated import glut triggered by global overcapacity and the recent Section 232 measures taken by the USA, the European Commission launched a safeguard investigation on 26 March, which might result in an import quota on all finished carbon and stainless steel products and would prevent European prices from dropping of a cliff.

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The real reason for the investigation is Section 232

On 26 March 2018, the European Commission (EC) initiated a safeguard investigation on imports of basically all finished carbon and stainless steel products plus tubes but excluding semi-finished products. The investigation concerns products of all countries of origins. The investigation has to be be concluded within 9 months, but provisional measures might be adopted at short notice. The EC states that the main reason for this investigation is the increase in import levels over the past five years.

According to the notice of initiation of the investigation, the total imports of the products concerned increased from 17.8 Mt in 2013 to 29.3 Mt in 2017. This increase is said to be the result of unforeseen developments such as the global overcapacity in steel making and trade measures adopted by a series of third countries during the last years. Furthermore, the EC states that the increased import levels had a negative impact on the market shares of European producers. Moreover, the sales prices of European producers were driven down by the lower price of imported material, which has allegedly resulted in a negative or low level of profit for European producers. The notice of initiation of the investigation also explicitly mentions the recent Section 232 measures by the USA as a likely cause for additional increases in import levels as countries with overcapacity may reroute their exports to the EU.

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