European steel industry calls for restoring control over steel imports

The European Union's steel industry has lashed out at EU trade authorities for failing to cut import quotas in a planned upgrade, saying producers in the bloc are at risk of bankruptcy.

The European Steel Association and the executive directors of EU steel producers are targeting the bloc's proposed changes to the import control system, introduced two years ago. The restrictions, known as “protective” measures, are designed to prevent the controversial US 25 percent levy on foreign steel from diverting and flooding global supplies to the EU market.

The EU will renew controls on steel imports as the virus-ridden economy recovers.

The European Commission, the EU's executive body, announced on May 29 a quota review to accommodate the economic downturn caused by the coronavirus and to prevent the quota cuts required by block producers. The changes, due to take effect on July 1, are designed to prevent market distortions as the EU economy recovers from the Covid-19 pandemic.

“Import quotas should be significantly reduced,” the industry association and executives said in a joint statement released Monday in Brussels. "The survival of the European steel industry is at even greater risk because the Commission's proposal to review steel safeguards does not take into account the sharp decline in demand following the Covid pandemic."

Citing continued or recovered steel production and warehousing in countries such as China, Indonesia, India and Russia, the announcement raised the likelihood that EU imports would suddenly increase their share of the European market by about 20%.

“The current supply could significantly increase the market share of imports while a huge part of the EU's production capacity is idle,” the statement said.