UK Steelmakers Call for Immediate EU Action on Chinese Imports
Posting Date:[2015-11-10]
LONDON (Reuters) - British steelmakers urged business minister Sajid Javid to insist on immediate action against what they see as Chinese steel dumping when he meets European Union (EU) economy and industry ministers in Brussels on Monday.
Britain requested the emergency meeting after nearly 4,000 of its steel jobs were lost in October - equivalent to about a fifth of the sector's workforce - as companies buckled under pressure from decade low steel prices. (ST-CRU-IDX).
Steelmakers in Britain and beyond pin much of the blame for the price plunge on record steel exports from China, though the global steel market is plagued by over-capacity.
"The U.S. and other countries have already moved to prevent cheap Chinese imports distorting their markets and now the EU must do the same, and do so quickly ... if we’re to prevent large scale problems for steelmakers spreading," said Gareth Stace, director of UK Steel, an industry lobby.
Producing steel profitably in Britain is also difficult due to a strong currency, lacklustre demand, plus energy costs and "green" taxes on heavy industry that are some of the highest in the world.
British steel workers held a demonstration in Brussels on Monday, alongside Belgian and French steel workers, calling for Javid to tackle high energy costs and take urgent action to stop what they see as Chinese steel 'dumping' or selling at below fair value due to state subsidies.
Last month, Chinese President Xi Jinping said his country had reduced capacity in its steel industry by 77.8 million tonnes, fending off criticism that Chinese exports had brought the British steel sector to its knees.
Experts estimate that China's spare steelmaking capacity is still at around 300 million tonnes, accounting for nearly half of the 700 million tonnes of spare steelmaking capacity globally.
China produces about half the world's 1.6 billion tonnes of steel and is widely expected to export some 100 million tonnes of steel this year on shrinking demand as its economic growth slows.
"Hiding behind the EU as an excuse to do nothing will not wash. Nothing should be off the table, including a refusal to grant China market economy status while it fails to abide by EU rules on fair trade," said Harish Patel, national officer for UK union Unite.
European steel lobby Eurofer, alongside industriAll European Trade Union and AEGIS Europe, which represents some 30 European manufacturing industry associations, called on EU ministers on Monday not to consider offering China market economy status (MES).
The EU, along with other World Trade Organization members, needs to determine whether to accord China MES at the end of 2016. If granted, it would reduce the EU's ability to impose anti-dumping tariffs on Chinese imports.
Eurofer and industriAll said 5,000 EU steel jobs had been lost in the last month alone, mostly in the UK, adding that there is a real threat to the 330,000 workers in the EU steel sector, a headcount down 85,000 since 2008.
It is estimated that for every direct steel sector job lost, three or four jobs are lost in sectors that depend on steelmaking.
"The EU needs to do more to speed up the deployment of its trade defence instruments. (It) needs to adapt trade, climate and energy policies ... to keep our sector competitive," said Axel Eggert, director general of Eurofer.
The UK government promised last week to start refunding the cost of green taxes as soon as the European Union grants state aid approval.
