EU steelmakers lobby for US Section 232-style tariff

EU steelmakers are lobbying for emergency restrictions on imports in light of continuing market penetration, according to numerous sources.

European steel association Eurofer has met with the European Commission to discuss high imports, at a time when weak demand is already putting pressure on local steel prices. Multiple sources suggest it is lobbying for a tariff similar to the US' Section 232, which applies a blanket tax on all finished steel imports.

"The commission of course is aware of the concerns of the sector, it's a sector with which we have a strong ongoing contact and dialogue. Any new trade defence cases are looked at on a case by case basis on their own merits," a commission spokesperson told Argus in Brussels on Tuesday.

The commission understands the concerns of mills, but at the same time has to balance the interest of steel users, sources suggest.

Imports to the EU's hot-rolled coil (HRC) market have increased dramatically since China started ramping up exports in the third quarter of last year. Imports since July 2023 have constituted around 25pc of all EU market supply when safeguard quotas reset at the start of each quarter, up from 11-15pc in the previous months.

Imports rose to a record 1.56mn t in July, and would have been even higher if not for 175,000t being pulled back from clearance to avoid additional tariff rate quota duties.

The EU imported 6.2mn t of HRC in January-July, the highest on record, despite tightened safeguards. The share of imports in overall supply is higher on cold-rolled coil and hot-dip galvanised (HDG), where the impact of comparatively higher energy costs is even more problematic for local mills. Steelmaking sources suggest that the existing safeguard is not fit for purpose as a result, and they also question the ability of importers to hold back supply to avoid duties.

But others suggest the impact of the existing 15pc other countries cap and continuing dumping investigation has not been felt yet, and that these measures will help tighten the market when demand strengthens.

Vietnam is a major source of HDG supply to the EU and sources expect this could be the next dumping case, especially given the country's high usage of Chinese HRC.

By Colin Richardson and Dafydd ab Iago