Eurofer Complains to EU About Chinese Coated-Steel Subsidies

European steelmakers group Eurofer filed an anti-subsidy complaint with the European Commission alleging that increases in imports of Chinese organic coated steel stem from illegal government aid.

The move comes two months after Eurofer lodged a complaint saying Chinese manufacturers sell the steel in the 27-nation bloc below cost, a practice known as dumping. The commission on Dec. 21 opened an probe into the Nov. 7 complaint, saying it may impose tariffs on the metal, which is used in domestic appliances, construction, heating and furniture.

“Clearly the miracle of the Chinese steel industry, which now counts for almost 50 percent of global steel production, is not the result of free-market forces,” Gordon Moffat, Eurofer’s director general, said in a statement today from Brussels. “The Chinese government at central, provincial and local level owns, directs and subsidizes virtually every aspect of its steel industry and has financed huge excess capacities.”

European steelmakers have alleged in recent years that China subsidizes domestic producers. European Union Trade Commissioner Karel De Gucht said in an October 2010 interview that China should brace for more complaints by European manufacturers about trade-distorting aid.

The EU imposed anti-subsidy tariffs against China for the first time last May, targeting imports of paper with levies as high as 12 percent. The five-year duties aimed to counter alleged subsidies to China’s exporters of coated fine paper, which is used for books, brochures and magazines.

Eurofer represents producers that account for more than 70 percent of the EU’s output of organic coated steel, according to the commission. The lobby said in November that China’s share of the EU market for the steel had grown to 15 percent from 0.5 percent in 2004. Eurofer said European consumption had dropped and imports from China had caused “significant injury” to the EU industry.

To contact the reporter on this story: Jennifer M. Freedman in Geneva at jfreedman@bloomberg.net

To contact the editor responsible for this story: James Hertling at jhertling@bloomberg.net

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