EU to set dumping duties on Chinese, Russian steel imports - UPDATE 1

* Chinese duties up to 16 pct, Russia up to 26 pct

* Duties back-dated to mid-December

* Investigation due to conclude in August (Adds investigation deadlines, EU industry complaint)


BRUSSELS, Jan 28 : The European Union will impose duties on imports of cold-rolled flat steel from China and Russia while its investigation into alleged dumping by the two countries continues.

The European Commission has set provisional duties of up to 16 percent for China and of up to 26 percent for Russia, according to sources familiar with the Commission's plans.

The Commission's investigation follows a complaint from Eurofer, the European steel association, which said Russia and China were dumping the steel - selling it below market prices at home or below the cost of production - on the EU market and thereby damaging the local industry.

The provisional measures are due to be announced by Feb. 14 and definitive duties, if imposed at the conclusion of the investigation, by Aug. 12. Such duties would typically apply for five years.

The Commission previously ordered customs authorities to register imports of cold-rolled flat steel from mid-December, meaning duties would apply to imports from China and Russia from then.

Eurofer says that, since the investigation was launched in May, imports of steel - used in cars and home appliances - into the EU have increased.

It said on Wednesday that overall imports of steel surged by 29 percent year-on-year in the third quarter of last year and by 51 percent in the final three months.

Russia, China and Ukraine made up some 60 percent of total steel imports.

For cold-rolled flat steel, Eurofer has said the average dumping margin - the amount by which export prices from the two countries undercut a normal market price - is 28 percent for China and 15-20 percent for Russian producers.

Russian producers Severstal and Novolipetsk Steel said when the investigation was launched last May that they were in compliance with international trade rules and not carrying out dumping.

China said then that the surge in Chinese steel product exports was "normal and also beyond reproach", reflecting a rise of demand and the strong competitiveness of its industry. 

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Source : Reuters
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China’s plan to slash crude steel production capacity

China’s plan to slash crude steel production capacity. Steel production capacity will be cut by 100 million to 150 million tons, China’s State Council announced on Sunday without specifying a time frame.

China’s steel producers have faced slumping steel prices and the industry lost an estimated $12 billion in 2015, according to Asia-Pacific chief economist at IHS Global Insight in Singapore. The industry faces a long period of restructuring and consolidation with excess capacity of about 300 million tons, he said.

Coal production capacity also is to be cut on "a relatively large scale," according to the statement Sunday from the State Council, China’s cabinet. 

Global steel production fell the most in six years in 2015 with China making up the biggest decline, the World Steel Association said Monday. Steel output in the world’s largest producer and consumer of the metal shrank by 2.3 percent in 2015, the biggest drop in 25 years, to 803.8 million metric tons.

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China market economy status will kill off EU steel -Eurofer

Granting China market economy status this year would threaten nearly all the 330,000 jobs in Europe’s steel sector despite any safeguards the EU might impose, the head of steel industry body Eurofer said.

The warning came a day after Europe’s second largest steelmaker Tata Steel announced another 1,050 job cuts in Britain. Its chief executive warned the entire EU steel sector is at risk without fast action against unfairly traded imports.

But EU trade policy looks to be heading in the opposite direction.

Although fierce debate is raging, all signs point to the EU accepting China as a market economy after December 2016. Beijing says this is its right after 15 years as a member of the World Trade Organisation.

The status would make it harder for Europe to impose anti-dumping duties on cheap Chinese goods.

“We do not see any way to maintain a similar level of trade defence measures if China is granted market economy status. Most of the EU steel industry may disappear,” Axel Eggert, director general of EU steel industry body Eurofer, told Reuters.

Europe has lost some 85,000 steel jobs since 2008, over 20 percent of the sector’s workforce, as steel prices crashed to decade lows due to overcapacity, shrinking demand and a flood of cheap imports, mostly from China. ST-CRUEU-IDX

The EU also has some of the world’s highest energy costs and green taxes.

Brussels has promised to consult industry before a final decision on China’s status, and will also seek safeguards like maintaining existing duties until their natural expiry and raising duties imposed for illegal subsidies.

China makes half the world’s 1.6 billion tonnes of steel and has an overcapacity of about 400 million tonnes – more than twice the EU’s output. Its exports to the EU have doubled over the past 18 months.

Free trade advocates say Europeans gain overall from cheaper Chinese imports, though a study by 25 European manufacturing federations estimates up to 3.5 million EU jobs could be lost if the status is granted.

Eurofer says even profitable mills making high tech steels that China doesn’t produce would struggle if China gets market economy status because the tonnages involved in this market do not justify running an entire blast furnace.

High tech steelmakers like Voestalpine and Thyssenkrupp cannot buy Chinese steel and process it into speciality products because of quality and specification issues.

“Europe cannot just produce high tech steel, it’s not economical,” said Eggert.

China has also struggled with over-capacity. Its major steelmakers lost 53.1 billion yuan ($8.07 billion) from January to November and 2015 steel output dropped 2.3 percent, the first yearly fall since 1981.

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Pakistan National Tariff Commission imposes preliminary AD duties on CRC imports from China & Ukraine

National Tariff Commission of Pakistan announces the preliminary imposition of antidumping duties on cold rolled coil & sheets imports from China & Ukraine ranging from 8.31 pct to 19.04 pct.

In the notice, Commission on preliminary basis established that the domestic industry suffered material injury on account of increase in volume of dumped imports, price under cutting, price depression, price suppression, decline in market share, profits, sales, capacity utilization, return on investment and negative effect on cash flow, inventories and ability to raise capital.

In reaching the preliminary determination, National Tariff Commission imposes provisional antidumping dumping duty on China & Ukraine as per below

On June 16, 2015, Karachi based Aisha Steel Mills Limited, a domestic producer of cold rolled coils / sheets, had filed an antidumping application under Section 20 of the Antidumping Duties Ordinance, 2015. Aisha Steel had alleged in its application that cold rolled coils / sheets are being dumped into Pakistan from China & Ukraine, which had caused or is causing material injury to the local industry.

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Unions to take steel industry jobs protest to Brussels

Unions are planning a protest next month outside a conference in Brussels to discuss the problems being faced by energy-intensive industries, including steel.

Thousands of jobs have been axed in the UK in recent months as steel firms struggle with high energy prices and cheap Chinese imports.

Unions fear there could be more job losses unless action is taken to help steel companies.

Dave Hulse, national officer of the GMB union, said: "GMB and the other unions in the UK are in the process of organising a demonstration on February 15 in Brussels because of the ongoing problems in the steel industry.

"We need action at EU level to deal with dumping of Chinese steel in the UK and the rest of Europe at below market prices.

"This dumping has to stop otherwise UK jobs in the steel industry will simply melt away."

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India : Public hearing on safeguard on certain steel imports on Feb 5

Global and domestic steel companies including ArcelorMittal, SAIL and Tata Steel will put forth their views before the revenue department which is holding a public hearing next month as part of the safeguard probe on certain steel products to protect local players.

Directorate General of Safeguards in the Revenue Department had initiated safeguard investigation concerning imports of 'Hot Rolled flat sheets and plates (excluding hot rolled flat products in coil form) of alloy or non-alloy steel' into India in December last year.

SAIL, Essar Steel, JSW Steel and Jindal Steel and Power had moved the Directorate for levy of safeguard duty on the product to "protect the domestic producers" from increased imports.

"It has been decided by the Director General, Safeguards to hold a public hearing in the safeguard investigation concerning imports of 'Hot Rolled flat sheets and plates (excluding hot rolled flat products in coil form) of alloy or non-alloy steel' into India on February 5, 2016," the Public Hearing notice said.

The list of "interested parties" contain 124 names from domestic producers; foreign nation/ delegates/embassies; importers/users/ users association; and foreign producer/ exporters.

The Directorate had earlier sought for views of "all interested parties".

As per the list of interested parties, foreign producer/exporters, include ArcelorMittal, China Steel Corporation, Nippon Sumitomo and Posco.

The domestic parties include, Tata Steel, Welspun Steel, and Bhushan Steel. Alstom India, BHEL and Bombay Iron Merchants' Association are among the interested parties from the side of importers/users/ users' association.

The domestic players had asked the Directorate for immediate imposition of safeguard measures for four years in their application.

It had also made a case for imposition of provisional safeguard duty in view of "steep deterioration" in performance of the domestic industry as a result of increased imports of the product under consideration.

The imports increased to 7,08,816 tonne in 2015-16 (annualised), from 6,01,667 tonne in 2012-13.

The applicants, which had a market share of 73 per cent in 2014-15, fell to 70 per cent during 2015-16 (A). During the same period, the market share of imports went up to 13 per cent from 12 per cent.


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China's Hebei to cut iron, steel production in 2016

The northern province of Hebei, which produces one fourth of the nation's steel, pledged to slash iron and steel production to tackle problems like overcapacity and air pollution.

Production of iron will be reduced by 10 million tons and that of steel by 8 million tonnes this year.

Production of steel and cement will be capped each at 200 million tonnes, and flat glass at 200 million weight cases by the end of 2020 to alleviate overcapacity, Hebei Governor Zhang Qingwei told the local parliament on Friday.

The central government has made tackling overcapacity one of its top priorities in the next five years.

An over-reliance on heavy industry for local growth has left Hebei vulnerable to sustained weakness in demand for capital goods both at home and abroad. Some steelmakers are operating at thin margins and more are operating at a loss.

Production of steel, cement and glass have also been widely blamed for the worsening air pollution in the region.

The province has previously said that it will cut a combined 160 million tonnes in steel, cement and coal, and another 36 million weight cases in glass by 2017 compared with 2013 levels.

Cutting overcapacity weighs on Hebei's economic growth, which came in at 6.5 percent during the first nine months of 2015, making it increasingly challenging for the province to meet the 7 percent target set for the whole year.

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South Africa extends steel import tariffs, ArcelorMittal unit says

South Africa will extend tariffs on some steel imports as producers continue to battle a glut of cheap supply from China, with further duties on wire-rod and rebar products to be levied in addition to the 10% tariff the government introduced in August, according to the local unit of ArcelorMittal

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China's steel industry is racking up enormous losses

Plagued by #overcapacity and weakening demand, #Chinese #steelmakers continued to endure hefty losses in the first 11 months of 2015.

According to Chinese news agency Xinhua, citing data provided by the China Iron and Steel Association (CISA), large and medium-sized steel mills suffered losses of 53.1 billion yuan ($8.18 billion) in the first eleven months of 2015.

Of the 101 #steel mills tracked by the #CISA, total sales revenue fell to 2.66 trillion yuan, a decline of 19.3% from the same period a year earlier.

A significant decline in steel prices, along with weakening domestic demand, fuelled losses for the sector.

Xinhua reports that steel price slumped by 73.3% to 1,600 yuan a tonne over the past two years, a result of weak domestic demand leading to crippling overcapacity across the sector.

Even a reduction in Chinese crude steel production over the same time period was not enough to stymie losses across the sector.

In the first eleven months of 2015, crude steel production fell by 2.2% to 738.38 million tonnes according to data from the National Development and Reform Commission (NDRC).

Last month Chinese premier Li Keqiang told told a seminar in Beijing that the nation should strive to upgrade traditional industries in 2016, adding that the government was determined to cut back on overcapacity in traditional industries as well as a large number of zombie enterprises.

Li singled out the nation’s struggling steel and coal sectors, which face severe overcapacity, heavy levels of indebtedness and mounting losses, as areas of particular concern.

While reforms to the sector will likely lead to improved profitability at Chinese steel producers that remain in production, it will do little to assist demand for steel product and the raw ingredients required to produce it.

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source : Business Insider

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