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The European Commission started an investigation on February 26 into the possible extension of existing safeguard measures, which are applied to imports of 26 steel product categories.
The safeguard measures were imposed for an initial period of three years and are scheduled to expire on June 30, 2021.
The coalition of EU trade associations, representing the interests of downstream users of steel, consists of the European Automobile Manufacturers’ Association (ACEA), Home Appliance Europe (APPLiA), the Committee for European Construction Equipment (CECE), the European Agricultural Machinery Association (CEMA), the European Committee of Manufacturers of Electrical Machines and Power Electronics (CEMEP), the European association of automotive suppliers (CLEPA), Orgalim, which represents Europe’s technology industries, and European wind industry association WindEurope.
Their letter was sent to the EC on February 26.
“While the Covid-19 pandemic severely affected manufacturing activity across all sectors in Europe during 2020, production levels are now increasing and are expected to continue to do so as the economy recovers during 2021,” the associations said.
“As a consequence, and since the second half of 2020, companies are facing surging prices for steel products and long delivery times because of an insufficient domestic supply. Due to the safeguard measures currently in place, reduced competition from third countries means that import alternatives aimed at easing cost and lead-time pressures on European manufacturers have been limited,” they added.
Lead times from European flat steel mills have been getting longer. Steelmakers across Europe were said to be sold out of second-quarter-production coil and have started to offer and trade material for third-quarter rolling.
Fastmarkets calculated its daily steel hot-rolled coil index, domestic, exw Northern Europe, at €750.00 ($905.59) per tonne on Thursday March 4, up by €1.25 per tonne from €748.75 per tonne on March 3.
The index was also up by €15.00 per tonne week on week and by €40.00 per tonne month on month.
The calculation of Thursday’s index was based on achievable prices heard at €740-760 per tonne ex-works.
The main reasons behind the domestic price rise for flat steel were a material shortage and strong demand.
Buyers have also been cautious about booking imported coil due to the effects of Europe’s anti-dumping and safeguard measures.
“The possibility of extending the safeguard measures beyond June 2021 adds to the uncertainty and adverse market conditions that steel users are currently facing,” the associations said.
“It is in the interest of downstream users to rely on a strong and competitive EU domestic steel industry,” they added. “Excessive protection will only result in an uncompetitive European steel industry, to the detriment of downstream users and final consumers. Therefore, the steel safeguard measures should expire on June 30, 2021, as foreseen.”