European steel producers are currently considering up to four or five new anti-dumping and anti-subsidy cases to shield their market from excessive imports. In the first six months of this year, the European Union (EU) overtook the USA to become the world's largest importer of steel mill products, according to the latest trade figures. This is believed to be the first instance of this happening in recent times, says one industry observer.

In the last few years, the US has put anti-dumping duties on a large number of steel products to protect its ailing industry from imports. Most were aimed at countries in Latin America, Asia, Eastern Europe and the Former Soviet Union. In many cases, steel represented a key part of their national economy, and a major earner of foreign currency. In contrast, the European Union has been much more moderate, pin-pointing a few selected exporters in a small number of anti-dumping cases.

In June, the Bush Administration launched a so-called 201 investigation of all steel imports. This was under pressure from US trade unions and from much of the US steel industry. The move would allow President Bush to introduce even stricter controls on steel imports in 2002, if he so wishes.

European and other steel producers are now preparing to fight US arguments at hearings due in a few weeks. They are likely to claim that the US industry has "encouraged" imports by failing to restructure and modernise in the way that has happened in Europe. Other producers will argue they are more competitive than US producers as they have lower costs.

But global steel producers and traders have already begun to seek out alternative markets, including western Europe. EU imports of steel mill products, which include pipe and wire products, as well as semi-fabricated products rose 2% to an average of 2.5m tonnes/month in the January to June 2001 period. In contrast, US imports in the same six months fell 30% to 2.3m tonnes/month.

One of the principal reasons behind the growing international protectionism in this key global commodity is low prices. Companies are looking at all ways to buoy their sales and profits. Today's low prices mainly reflect the cyclical nature of the business. But also production has not responded quickly to weaker levels of consumption in many parts of the world. In fact, earlier in the year, many producers actually offset the decline in prices by increasing sales.

EU imports continue to rise

Overall, EU imports of finished products were 1.6m tonnes/month in the first half of 2001, a 4% rise year-on-year. Exports in the first half were similar to those in 2000 at around 1.4m t/m. Imports have been rising since the end of last year: in the fourth quarter of 2000, they were 1.2m tonnes/month. In the first quarter of this year, they were 1.5m t/m, and in the April to June period 1.7m t/m.

Of the likely anti-dumping cases, the most advanced is cold rolled coil. This could well be filed within the next month or so. In addition, European producers are contemplating actions on hot rolled coil, quarto plate, rebar and wire rod.

In cold rolled coil, the West European producers are likely to target Turkey, South Africa, Bulgaria and Serbia. Slovakia is also a possibility, they say. Cold rolled imports in the first half of this year were 40% higher than in the same period of 2000, though there are some signs that monthly import volumes have begun to decline in the face of weak prices and high stocks.

Imports of quarto plate, which declined in 1999 and 2000 are again on the rise. Total EU shipment from third countries in the first half rose by 70%, year-on-year, to 140,000 t/m. The targeted countries in any anti-dumping case are thought likely to include Indonesia, Macedonia, Poland and the Czech Republic. The main importers are located the Netherlands and Germany.

The EU producers may also begin an anti-dumping case and/or an anti-subsidy case on both rebar and wire rod from Turkey. A high proportion of these imports are currently being taken by buyers in Spain and the UK. Though total West European imports of rebar are down, Turkish producers have increased their shipments to 35,000 t/m. At the end of last year, their imports were running at 12,000 t/m. Wire rod imports, year on year, remain more or less unchanged.

In addition, an antidumping case on hot rolled sheet is a possibility. This is expected to take in Argentina, South Africa, Egypt, Libya, Iran, and may be Turkey. Imports of hot rolled coils have followed a similar pattern - 280,000 tonnes/month in the final quarter of last year, 400,000 t/m in the first three months of 2001, and 530,000 t/m in the April-June period. However, this is still below last year's very high levels.

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