THE European Union yesterday began new investigations into imports of Chinese steel, warning that it would not allow “unfair competition” to threaten Europe’s industry which is crumbling under a flood of cheap imports.
European steelmakers are reeling from a global glut and last week, Luxembourg-based world leader ArcelorMittal blamed China for its US$8 billion loss last year, while thousands of jobs are being cut.
“We cannot allow unfair competition from artificially cheap imports to threaten our industry. I am determined to use all means possible to ensure that our trading partners play by the rules,” EU Trade Commissioner Cecilia Malmstroem said in a statement.
The European Commission, the EU’s executive arm, has opened an investigation into imports of seamless pipes, heavy plates and hot-rolled flat steel from China, the statement said.
The Commission separately imposed anti-dumping duties on cold-rolled flat steel imports from China and Russia.
It recalled that last month it had also imposed anti-dumping measures on steel bars used in the construction industry.
In response, the China Iron and Steel Association said a market exit mechanism must be put in place as the steel industry strives to cut excess capacity.
“Though some enterprises have either cut or stopped production, the absence of an exit mechanism has prevented them from withdrawing from the market completely,” it said.
“Some have become ‘zombie enterprises’ due to a lack of funding, but are still there.”
Some local governments still ask steelmakers to maintain production to ensure economic growth, it said.
China’s iron and steel industry has slowed in line with the wider economy after a decades-long building boom.
Production of crude steel fell 2.3 percent to 804 million tons last year, the industry’s first slump in 34 years.
The nation will reduce its crude steel production capacity by 100 to 150 million tons over the next five years, the State Council said last week.