Trade Association Seeks EC Safeguard Holiday amid Steel Shortage
S&P Global Platts reported that the International Steel Trade Association in 18 March letter the European Commission has proposed to lift the import
S&P Global Platts reported that the International Steel Trade Association in 18 March letter the European Commission has proposed to lift the import safeguard quota for 12 months from July amid the current material shortage in Europe. ISTA wrote “The last six months provide a strong case for the view that the quota system is not only unnecessary but its inflexibility has contributed to price hikes, shortages, and an uneven flow of supply as shipments are held or advanced according to quota availability: the very distortion in trade flows which the measure claimed it would avoid. The safeguard holiday could be reviewed if circumstances change.”
The letter is a response to the current review by the EC of the safeguard quotas that are due to expire by the end of June. A decision on the review is expected at end May.
European mills however have urged the EC to extend safeguards measures. European steel producer association Eurofer told Platts "The EU steel safeguard is a factor of stability in a volatile market. The quotas were not reduced when demand collapsed in spring last year when the Covid-crisis broke out, neither are they to be increased or eliminated now. The quotas are not a tool to micro-manage volatility in the market. Instead, they have a preventive function looking at the risk of trade disruption because of global excess capacity and within this context the deflection pressure caused by US S232."
The EC introduced steel safeguards on 26 product categories in July 2018 after steel imports surged in 2017-18 and the US' March 2018 imposition of Section 232 taxes on steel imports, which caused trade deviation.