Call for action over steel imports

Date: 03/09/1998

By Chris Johnstone

ITALIAN steelmakers are gathering evidence for an anti-dumping case against a flood of imports from eastern Europe, Russia and the Far East as foreign producers target the relatively buoyant EU market.

The Italian steel federation case focuses on hot rolled coil, used in light industrial applications such as tube-making. Since last November, the country's main producer, Riva, has been hit by a 30% fall in international prices, down from around 300 ecu per tonne ten months ago to 215 ecu in July.

The federation is compiling the statistics so it can file a complaint with the European Commission after what it describes as a bland reply from Trade Commissioner Sir Leon Brittan to a letter highlighting its concerns before the summer break.

"Anti-dumping measures are the only avenue open to us now," said a federation spokesman. "Imports of steel products are coming in from all over the world, especially Russia, India and South East Asia."

European steel producers' lobby Eurofer is also preparing a series of anti-dumping complaints against central and eastern Europe, Turkey and Asia, and is likely to finalise which countries and which products to target by the end of the month. "This should be done quite quickly," said a spokesman.

Russia and Ukraine will not face any complaints since their trade relations are governed by steel agreements which provide for step-by-step progress towards free trade.

Italian and other EU producers are nevertheless worried that the imports problem will worsen following a 20% devaluation of the rouble. But industry sources say action against Russian imports could prove difficult since most are already being sold on to the European market from third countries.

"We are watching the problems with Russia closely. There are also worries that China might devalue," said Ian Goldsmith of the UK Steel Association.

China was, until recently, a big importer of steel from Europe, but has now turned around into a sizeable exporter. "There has been a major surge.

In some segments of production they have almost taken a third of the market overnight," said Goldsmith.

The British steelmaking lobby is also worried that foreign producers will target the EU market even more if the US, the only other dynamic market in the world, begins building barriers.

There are already signs that this could happen, with American companies which have been in the vanguard of free trade now calling for national action by the trade department to curb steel imports. That, says Goldsmith, would only exacerbate the problem.

European steelmakers have already been warned by the Commission to exercise caution for the rest of the year and prepare for leaner times after what has been, for most of them, a record-breaking year for profits.

Commission officials predict that steel production and demand will tail off in the second half of the year, falling below comparable levels in 1997. However, they still expect steel output in 1998 to total around162 million tonnes - a 1.6% increase compared with 1997 - due to the strong start to the year.

In its pre-summer assessment of the industry, the Commission noted a "sizeable increase in imports" into the EU during the first half of 1998, but expected these to slow down as demand decreased. Eurofer reported a 50% increase in exports into the EU during the initial quarter of 1998.

The Commission signalled its concern about the steel market in July by launching a dumping probe into stranded steel rope and cable sales from Mexico, Hungary and Poland. It also imposed provisional duties of between 11.5% and 25% on steel bars and rods from India.