EU may not impose duties on China steel

September 13, 2008

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BRUSSELS, Sept 12: The European Union will not impose anti-dumping duties for now in the first of three investigations into Chinese steel imports, sources familiar with one of the most sensitive EU-China trade cases said on Friday.

The EU’s executive commission must decide by Saturday whether to introduce provisional duties on import of Chinese hot dipped metallic coated steel products, used for example in the construction industry.

Brussels would have a further six months to decide whether to impose definitive duties, usually lasting five years.

“It is hard to argue that European companies are suffering injury,” said one of the sources familiar with the investigation, saying profits in the sector remained high.

A European steel sector representative said the need to impose duties on a provisional basis was less urgent, given a recent slowdown in Chinese steel exports to the EU.

“But at the same time, we would expect the investigation to be taken to its conclusion,” the representative said, asking not to be identified.

A European Commission spokesman declined to comment before Saturday’s deadline.

Several European steel producers complained to the Commission last year that their rivals in China were helped by unfair subsidies, allowing them to ramp up exports to the EU.

China denies the claim and says European producers of goods ranging from steel to shoes are resorting to protectionism.

Some European engineering firms, big steel consumers, also oppose measures that would push up the price of imports.

The European Commission is investigating whether two other categories of Chinese steel -- stainless steel cold-rolled flat products and wire rod -- are being dumped in the bloc, or being sold at below prices in China or below cost. Steel exporters in other countries are also under scrutiny in the two investigations. Decisions whether to apply provisional duties in those cases are due in the coming months.

Chinese exporters could be concerned by findings in the hot dipped investigation and the parallel stainless steel probe that none qualified for market economy treatment (MET), the sources said.

Companies granted MET by the EU are subject to lesser or no anti-dumping duties.

—Reuters