Assofermet Acciai, a segment of the Italian steel association Assofermet, commented on its incomprehension and objection to the European Commission’s proposal to the WTO calling for a three-year extension of the present steel safeguard legislation that includes tariffs. The EU Commission seeks to apply tariffs until June 30, 2024, instead of the initial 1yr expectation, and has sought to reduce the percentage of the annual increase in the volume assigned from 5pc to 3pc.
The association also noted the EU’s latest proposal does not address the needs of the supply chain customers, protects only the interests of the steel producers’ sector, and lacks common sense in the current market conditions. The EU steel industry is profoundly different from what it was in 2019 and early 2020 and is currently facing high historical prices, long lead times, and limited import relief. Assofermet noted that in some cases buyers have reported lead times of 5-6 months.
European Commission’s analysis examined information for 2018-2022 but has not considered the forecasted consumption increase and limited production during 2021-2022, according to the association.
Assofermet Acciai stated that despite the hurdles, some importers concluded supply agreements in March 2021 with non-EU steel mills for shipment arrivals in H2 2021. This highlights the need for imports, despite tariff barriers, and the fact that the tariffs are injuring the downstream consumers and end-users. High prices at the moment driven by speculative positions held by steel producers could develop into an inflationary environment that could turn into stagflation and limit the economic growth that is gaining momentum. The association affirms that removing protectionist obstacles within the EU and adding steel flows from third countries will EU processing production meet the growing demand of EU markets.
The association also noted the difficulty for steel product producers in the steel supply chain to obtain all the raw materials that work orders require within the Union.