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China, Ukraine Face Renewed EU Cable Duties; South Africa Spared

The European Union renewed 13-year- old tariffs on steel ropes and cables from China and Ukraine to curb competition for EU manufacturers including ArcelorMittal (MT) while letting a levy against South Africa lapse.

The EU re-imposed the import duties for another five years to punish Chinese and Ukrainian exporters for selling the ropes and cables in Europe below cost, a practice known as dumping. The rates are 60.4 percent for China and 51.8 percent for Ukraine. The expiring duty on South Africa is 38.6 percent.

Chinese and Ukrainian exporters continue to undercut EU producers and have “significant” spare capacity that could pose an additional threat, the 27-nation bloc said in a decision today in Brussels. The South African industry including Scaw stopped undercutting European competitors and has “limited” spare capacity, the EU said.

The combined Chinese and Ukrainian share of the EU market for steel ropes and cables, which are used in industries ranging from oil and shipping to construction and mining, fell to 2.2 percent in the 12 months through September 2010 from 3.8 percent in 2007, according to the bloc. South Africa’s share dropped to 0.1 percent from 0.5 percent over the period, said the EU.

In addition to a French unit of ArcelorMittal, EU producers of steel ropes and cables include British, German, Italian, Spanish, Greek, Portuguese, Danish, Polish, Czech, Romanian and Bulgarian companies, according to the bloc.

South Korea

The renewal of the duties against China and Ukraine and the end of the levy against South Africa are the outcome of an almost 15-month probe and will take effect after publication in the EU’s Official Journal by Feb. 13. The investigation prevented the levies against all three countries from expiring as previously scheduled in November 2010.

In April 2010, the EU extended to South Korea the 60.4 percent tariff applied to China after concluding that Chinese exporters shipped the goods via Korea to evade the levy. Since 2004, the EU has also applied to Morocco the duty against China and to Moldova the 51.8 percent duty against Ukraine after finding evidence of circumvention.

These arrangements will remain in place as a result of today’s decision.

The EU introduced the taxes in 1999 and renewed them for five years in November 2005. When it began the expiration review in November 2010, the EU let lapse a similar duty of 30.8 percent against India that also was introduced in 1999 and renewed in 2005.

To contact the reporter on this story: Jonathan Stearns in Brussels at jstearns2@bloomberg.net

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

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