European steelmakers’ association Eurofer continues to believe that the quotas system put in place as a safeguard measure should be a country-based calculation rather than global.
This is because steel imports into Europe have risen sharply as a result of U.S. tariffs, particularly from Turkey, threatening European steelmakers as demand growth in the continent slows.
According to Eurofer, Turkey which is facing a 50% tariff on steel from U.S., could no longer realistically sell across North America, while slowing domestic growth left it with more steel to sell. This has resulted in lot of steel volumes being pushed into the EU market.
Russia, a traditional exporter of steel to Turkey, was likewise, needing an outlet for its production. Imports from Turkey and Russia increased by most – from Turkey by 57% in the first nine months and from Russia by 56%.
In the third quarter 2018 (Jul-Sep), Eurofer has said that the steel consumption had risen by just 0.6% but imports increased by 10% which means that European mills were capable to meet country’s domestic steel requirement. Steel imports now make up some 25% of the EU market.
As a result of the continued increase in imports and further drop in exports, the EU’s net trade deficit worsened significantly over the first eight months of 2018. The trade deficit amounted to 1.4 MnT per month over this period, compared with on average 0.8 MT per month in 2017.
In Jul’18, EU announced that the tariffs of 25% will be levied only after steel imports exceed the average of the last three years. The current quotas system is in place until February 2019 with the European Commission needing to take a decision on the confirmation of permanent measures by the end of 2018. Many sources believe it is likely that the measures will remain in place for a further period of three years from 2019.
Eurofer believes although these measures are working well, as the quotas are gradually being filled in line with expectations. Imports from Turkey and Russia are causing disruption to the European market and hence a country-based system remains the best solution.
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