Brussels, 09/10/2007 (Agence Europe) - European steel producers have not yet lodged their complaint with the European Commission against Chinese exports of low cost finished steel products (flat products, steel plate, tubes) (EUROPE 9516) as they have already been reassured by firm support from an influential member of the Commission, Industry Commissioner Günter Verheugen, and from German Economy Minister Michael Glos. Taking part at the Annual conference of the International Iron and Steel Institute (IISI) in Berlin on Monday 8 October, both Verheugen and Glos warned Beijing that the EU would vigorously defend its interests against the explosion of cut price Chinese imports on the Community market. “The European Union will put pressure on China to end government subsidies for steel exporters”, Glos said. “We need fair rules in world trade and you cannot expect the German and European steel industries to compete against government subsidies. That is why the European Commission will apply pressure, supported by us”, he added. According to several sources in the sector, a complaint could be lodged with the Commission by the end of October from the confederation of iron and steel industries (Eurofer), which considers that Chinese sales abroad are accompanied by dumping as far as prices are concerned (sales price below production cost). “We will defend our European interests in a strong and vigorous manner”, Verheugen vowed, before going on to add: “If any competitors pursue unfair trade practices the bloc will use trade defence instruments. That does not mean protectionism. It is a correct and normal use of our rights and is our obligation”.
Imports of Chinese steel into the EU increased from 1 million tonnes in 2005 to 5 million in 2006 and are expected to double in 2007 to reach 10 million tonnes. China, which produces one third of world steel production (with 95% of actors nationalised), was still a net importer in 2004. According to IISI, its net exports should reach 50-55 million tonnes in 2007. On the sidelines of the IISI conference, the president of the German steel federation, Dieter Ameling, confirmed to Reuters that the European steel industry is gathering evidence of dumping practices to submit to the Commission in coming weeks. Steel producers are looking at several segments of the sector, including that of stainless steel where problems seem to be the most apparent. They have noted measures taken recently by China to put a brake on its exports (reduction of export subsidies and closure of obsolete sites) but they are still awaiting results. In their view, the final solution would be to use surcharges on imports to offset the damage incurred. Such surcharges (of up to 90%) have already been practised in the United States for the past five years. However, according to a leader in the sector cited by the French daily, Les Echos, in order to eradicate this problem, the EU may also need to temporarily resort to imposing quotas on Chinese imports, as it did for Russian and Ukrainian steel. (eh).