China, Taiwan Face EU-Tariff Threat on Stainless Steel

The European Union threatened to impose tariffs on stainless steel from China and Taiwan to curb competition for EU producers including ArcelorMittal and ThyssenKrupp AG.

The EU began an inquiry into whether Chinese and Taiwanese exporters of cold-rolled flat products sold them in the bloc’s 5.5 billion-euro ($7.5 billion) market below cost, a practice known as dumping. This kind of steel is used in everything from cars and tanks to boilers and kitchen equipment.

The investigation will determine whether the steel “is being dumped and whether the dumped imports have caused injury,” the European Commission, the EU’s executive arm in Brussels, said today in the Official Journal. The commission has nine months to decide whether to impose provisional anti-dumping duties for half a year and 15 months to decide whether to apply “definitive” levies for five years.

The investigation may revive EU-China trade tensions over steel more than five years after European producers complained that Chinese competitors had dumped a range of goods in Europe, prompting a series of dumping inquiries. One of those probes covered stainless steel cold-rolled flat products and was closed in 2009 without the imposition of EU anti-dumping duties.

The probe announced today stems from a May 13 complaint by European steel industry group Eurofer on behalf of producers that account for more than a quarter of the EU’s output of stainless steel cold-rolled flat products, according to the commission.

‘Alarming Rate’

Brussels-based Eurofer hailed the new investigation, saying in a statement that European imports of stainless steel cold-rolled flat products from China and Taiwan rose at an “alarming rate” last year and unfairly undercut EU manufacturers.

The two countries’ combined share of the EU market exceeded 14 percent in April this year and the dumping margin was 20 percent, according to Eurofer, which cited overcapacity in China and Taiwan.

“This is no longer sustainable,” said Eurofer Director General Gordon Moffat. He accused Chinese exporters of “flooding the markets which are still unprotected like the EU.”

The EU market for stainless steel cold-rolled flat products in 2013 was worth about 5.5 billion euros, of which imports from China and Taiwan were valued at 620 million euros, according to Eurofer. Total EU imports of this steel last year were worth about 1.5 billion euros, Eurofer said.

In volume terms, the EU market in 2013 was 3.4 million metric tons, of which 318,000 tons were imports from China and Taiwan, according to Eurofer.

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