EU Now in a Full-Fledged Steel Price War With China

At least according to a European Union official familiar with the Union’s steel sector plans, says Reuters.

The E.U. is certainly ramping up the pressure. This year, alone, the European Commission has 37 anti-dumping and anti-subsidy measures in place for steel products, 15 of them concerning China, slapping anti-dumping duties on products such as rebar, cold-rolled carbon steel and cold-rolled stainless steel, ranging between 18.4 and 25.3% for imports from China.

Everybody Gets on the Tariff Bandwagon

The E.U. is scheduled to rule on plate and hot-rolled coil from China in November and while rates haven’t been at the same level as the U.S. where up to 520% duties are have been applied, they are estimated by the industry to need to be in the 30-40% range in order to be effective.

Can China’s zombie steel mills be shut down? Beijing is trying a new tactic. Source: Adobe Stock/ZJK.

Yet despite the unprecedented level of action, carbon steel imports in the year to May rose 21% with China now representing 27% of total E.U. imports, while stainless steel imports rose 17% over the period, E.U. data shows, even though demand remained almost flat.

China is not alone in being singled out for action. The E.U. and the U.S. have been taking action against other Asian exporters as well, but with Chinese exports climbing to 112.4 million metric tons in 2015, the first time it has reached 100 mmt, according to them,China’s exports dwarf any other country.

Not that China isn’t trying to do something about it, in many ways we are seeing a race between Beijing desperately trying to cajole or pressure its regional governments to close coal and steel capacity, and rising market protectionist measures being applied by much of the rest of the world.