European Steel Hits Out Against Chinese Dumping

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Written by Martin Lynch, European News Editor for Industrial Info (Galway, Ireland)--Europe's steel industry is calling on the European Union (EU) to refuse Market Economy Status to China, as Europe struggles to deal with a deluge of cheap Chinese steel exports.

The European Steel Association (EUROFER) claimed that European steel plants have been going under as the market has been flooded this year by millions of tonnes of cheap Chinese steel. The organization highlighted that 80% of all ongoing anti-dumping and anti-subsidy trade cases are related to China, and a large portion of these are to do with Chinese steel.

"China has overcapacity of 340 million tonnes of steel--a third of its total installed steel production capacity," said Axel Eggert, director general of EUROFER. "Chinese overcapacity is twice the total production of EU-based steel producers. The Chinese government says it is making efforts to reduce this overcapacity, but progress has been unconvincing thus far. Recent examples have demonstrated that China will not let unviable plants close, even as European installations are extinguished due to unsustainable price pressures."

Industrial Info has reported recently on the difficulties afflicting the sector, with two U.K. steel operations being hit. At the start of this month, Sahaviriya Steel Industries (SSI) U.K. Limited, part of SSI PCL (BAK:SSI) (Bangkok), announced the closure of the Redcar steel-making plant, with the loss of 1,700 jobs. For additional information, see October 5, 2015, article - U.K. Steel Plant to Close with 1,700 Job Losses.

In the past week, Tata Steel Europe (London, England) announced that it is planning to shed 1,200 jobs from its U.K. operations. It will stop production of steel plate at a number of sites and laid the blame squarely on cheap imports from China. For additional information, see October 27, 2015, article - Tata Cuts 1,200 Jobs at U.K. Steel Operations.

China is pushing for Market Economy Status, something which would allow Chinese companies to operate more easily outside China and defend themselves from anti-dumping actions from E.U., U.S. and other regions. Chinese solar power companies, which have been subsidized by the Chinese state, have been targeted by the EU in recent years for flooding the market with below-cost components.

In December 2013, Chinese solar companies faced import duties of as much as 42.1% by the EU after being found guilty of dumping below-cost solar glass onto the European market. For additional information, see December 2, 2013, article - Europe Slaps Import Duties on Chinese Solar Glass.

EUROFER argued that, despite economic reforms, China does not yet meet the "necessary technical economic criteria set out by the EU."

Eggert said: "Were MES to be granted, the EU would no longer be able to effectively defend against massively dumped Chinese steel. This dumping is a real threat to the survival of the European steel industry. The recent closures of plants in the U.K. have had price pressure from dumped Chinese steel as an underlying cause."

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