Steel firms call for action over cheap imports

Date: 26/10/1995

By Tim Jones

EUROPEAN steel-manufacturers are edging closer to filing a complaint with the European Commission to stop the mounting wave of low-priced imports from Eastern Europe, Asia and Latin America.

The industry claims the flood of cheap imports is undermining their ability to share in a slow recovery in the sector after years of crisis.

Steel company representatives were given updated figures on the scale of the problem when they met at the Brussels office of the European Confederation of Iron and Steel Industries (Eurofer) this week.

The meeting came amid claims by Eurofer that the situation is worsening with every passing month.

In August, Eurofer complained that imports of bargain-priced wire rod, hot-rolled coils and heavy plate had grown 40&percent; in the first half of this year.

“Their prices are so low that they can only reflect unfair trading practices,” the steel lobby said, calling on the Commission to take retroactive measures to help the industry.

Since then, according to Eurofer, the situation has deteriorated. New figures presented this week showed total imports in the first half had grown 80&percent; compared with the same period last year. “To achieve results like this, exporters in third countries are having to offer the products at a very, very low price,” claimed an official at Eurofer, who said prices were being undercut by up to 25&percent;.

Across the range of products, imports of hot-rolled coils has grown 87&percent;, heavy plate 50&percent;, sections 26&percent; and wire rod 111&percent;. The coils and plates are coming from Bulgaria, Turkey, Mexico, India, China and Romania while the sections and wire rod originates in Bulgaria, Romania, Egypt, Turkey, Switzerland and Poland.

This is the latest stage of a long-term development which has seen outside competitors challenging European producers in an increasingly cut-throat market. In the 1970s, steel imports accounted for 4&percent; of European consumption. This figure has risen nearly fourfold over the last two decades to 14&percent; this year.

The EU's industry is upset that this surge in imports is hitting it hard at a time when analysts foresee a turn-round for the market, particularly for stainless steel, because of increasing world demand as the economic recovery gathers momentum.

Prices have fallen in Europe, although northern European producers have been reluctant to slash prices for large orders even though their sales volumes have been undermined. European exports to the US have fallen 30&percent; this year, partly because of the fierce competition engendered by the growth of US mini-factories.

Against this background, manufacturers will press the Commission hard not to show any favour to the Central and Eastern Europeans at a time when several of them are being groomed for future membership of the Union.

EU steel imports from Eastern Europe have grown by about 2 million tonnes a year since 1991. “The Commission has two attitudes: one to Eastern and Central Europe and another to the outside. We don't see it the same way,” said a Eurofer official.

Experience suggests that the Commission will not necessarily take a friendly view of current Central and Eastern European practices.

In July, it launched an investigation into alleged Czech and Hungarian dumping of iron and no-alloy steel-beam exports on to the EU market.

Anti-dumping investigations, which decide whether companies are selling products on to the EU market at prices which do not reflect production costs, can take up to nine months.