U.S., Russia, Japan, China, Korea Hit With EU Steel Duty

Updated on

The European Union imposed tariffs as high as 35.9 percent on electrical steel from the U.S., Russia, Japan, China and South Korea, seeking to curb competition for EU producers such as ArcelorMittal and ThyssenKrupp AG.

The duties punish American, Russian, Japanese, Chinese and Korean exporters of grain-oriented electrical steel -- used in power transformers -- for allegedly having sold it in the 28-nation EU below cost, a practice known as dumping. The EU market for this niche product, also known as GOES, is about 400 million euros ($450 million).

EU producers that also include Tata Steel U.K. Ltd. suffered “material injury” as a result of dumped imports of GOES from the five countries, the European Commission, the bloc’s trade authority in Brussels, said on Wednesday in the Official Journal. The anti-dumping duties, due to take effect on May 14, are for six months and may be prolonged for five years.

U.S., Russian, Japanese, Chinese and Korean exporters increased their combined share of the EU market for GOES by about three percentage points to as much as 48.3 percent in the 12 months through June 2014 compared with 2011, according to the commission. European manufacturers’ share of their home market fell to a maximum 57.6 percent from up to 58.4 percent over the period, said the commission.

Anti-Dumping Duties

The benefits of the anti-dumping duties for European makers of GOES outweigh the disadvantages for EU users that include Siemens AG in Germany, ABB AB in Spain and Alstom Grid U.K. Ltd. in Britain, the commission said. In a worst-case scenario, the price of transformers in the EU would rise by a maximum 3 percent, according to the commission.

“The imposition of measures at the proposed level probably has only a limited impact on the prices of transformers,” the commission said.

The trade protection is the preliminary outcome of a probe that the commission opened last August on the basis of a dumping complaint by European steel industry group Eurofer. The levies target versions of GOES with a thickness of more than 0.16 millimeter.

Brussels-based Eurofer hailed the introduction of the anti-dumping duties, saying in an e-mailed statement that they will “restore free trade in the EU market at non-injurious prices.”

American Exporters

The duty rates are 22 percent on U.S.-based AK Steel Corp. and any other American exporters; 21.6 percent on Russia-based OAO Novolipetsk Steel and any other Russian producers; up to

35.9 percent on Japanese manufacturers including Nippon Steel & Sumitomo Metal Corp.; 28.7 percent on Baoshan Iron & Steel Co., Wuhan Iron & Steel Co. and any other Chinese producers; and 22.8 percent on Posco and any other Korean exporters.

Tokyo-based Nippon Steel & Sumitomo Metal criticized the measures, saying in an e-mailed reply to a question that they are “inappropriate” and “regrettable.” The company denied that its exports of GOES to the EU have caused injury to European competitors.

In 2005, the EU imposed anti-dumping duties for five years on GOES from the U.S. and Russia.

Before it's here, it's on the Bloomberg Terminal. LEARN MORE