The European Non-Integrated Wire Rod Processing Association (EUNIRPA), has responded to Eurofer’s call to reduce import quotas and further tighten the safeguards proposed by EU governments and EU Commission.
On June 8 Eurofer and major European steelmakers urged the European Union to further lower quotas for steel imports to support EU steel mills recover from the sharp decline in demand because of COVID-19 related shutdowns.
EUNIRPA acknowledged the unprecedented challenge mills are facing because of the pandemic and encouraged a strong recovery plan for the domestic industry. However, the association noted that the steel industry is composed of tens of thousands of small- and medium-sized distributors and processor for downstream applications not just large steelmakers.
The association warned that the proposed protectionist measures seek to shield the EU market from all imports and could be viewed as an attempt by the EU integrated steel industry to control and potentially eliminated non-integrated downstream industries in many sectors including wire rod processing industry.
The removal of imports is to the detriment of many in the steel supply chain due to the need for uninterrupted supplies of steel from diverse sources and potential monopoly pricing dynamics, according to EUNIRPA. Additionally, regular supplies to end buyers should not be interrupted at a critical moment as businesses return to serve clients. Imports, in fact, provide a check to potentially excessive domestic prices in a captive market environment, EUNIRPA said.
The association also highlighted that the downstream steel industry accounts for hundreds of thousands of jobs throughout the EU and the entities are smaller with limited financial means to support the current crisis.