Stainless Steel Coil Imports: EU Launches Inves­tiga­tion

In February, the EU implemented a 'definitive safeguard measure' on steel: a review of the measure began in May. Now, as part of its ongoing anti-dumping inves­tiga­tions, the European Commission has announced that it has initiated an anti-subsidy inquiry into hot-rolled stainless steel coils from Indonesia and China.

Under the EU's existing definitive safeguard measure on steel, scheduled to be in effect for three years, a duty of 25% is applied to imports that exceed product-specific quotas. However, stainless steel imports from both Indonesia and China were excluded from the safeguard, with no extra import duty being imposed upon them.

A growing number of market participants have expressed concerns that the existing safeguard is not effective to the cheaper Indonesian and Chinese imports, which are continuing to floor the market in Europe. Mills, trade associations and other orga­nisa­tions successfully lobbied for an inves­tiga­tion to be carried out, demanding that import tariffs are imposed on products from these countries in order to protect the domestic market.

Stainless steel mills operating in Indonesia and China mainly use NPI (Nickel Pig Iron) as feedstock for production, whereas mills in Europe mostly use stainless steel scrap. NPI is signi­fic­antly cheaper than other raw materials, which gives stainless steel mills using NPI an unfair cost advantage compared to European mills, meaning that they are struggling to compete.

Between January and August this year, imports of stainless steel coils from China increased by 12.8% compared to the same period in 2018, while Indonesian imports surged by 82%. To try and compete with these figures, European stainless steel mills are negotiating for larger discounts for nickel content in scrap stainless steel: payables for this content in the last quarter of the year are predicted to be up to 60% lower than the nickel content traded on London's Metal Exchange.

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