European Union (EU) could review its steel import safeguards to protect domestic steelmakers from dumping, according to media reports. Amid the COVID-19, EU trade chief in a video parliamentary session informed that member countries could face a glut of lower priced steel products.
In 2018, EU had levied import quotas for 26 grades of steel equivalent to their volumes imported in 2015-17, plus an additional 5pc. In 2019, this quota was hiked by another 3pc. These quotas were levied to safeguard domestic steelmakers after the US imposed 25pc import duty on European steel producers.
Until recently, there was a possibility of the import quota being increased by another 5pc. But the move is likely to be reviewed as downstream demand for steel remains affected in many countries and prolific producers like China could divert their piled-up inventories to European markets.
Hit by COVID-19 restrictions, steel production in Europe has declined by around 50pc and new orders are down by 75pc. Furthermore, sectors like auto and construction also remain shut weakening downstream demand.