Seven countries call for EU action to help steel industry

8 February 2016

Seven countries including France, Britain and Germany have urged the European Union to step up action to relieve an ailing steel industry suffering from tumbling prices and cheap imports from China and Russia.

Ministers from the three countries, along with Italy, Poland, Belgium and Luxembourg, sent a joint letter on Friday to the European Commission and the chair of the EU Council of Ministers.

"The European steel industry – already weakened by the 2008 economic crisis – is tackling chronic use of unfair trade practices in a context of strong international competition intensified by overcapacity at global level," they wrote in the letter, initiated by French Economy Minister Emmanuel Macron and seen by Reuters on Saturday.

"The European Union cannot remain passive when rising job losses and steelwork closures show that there is a significant and impending risk of collapse in the European steel sector."

The EU is the second largest producer of steel in the world after China. It makes over 177 million tonnes a year, accounting for 11 percent of global output, according to EU data.

Europe has lost 85,000 steel jobs since 2008, over 20 percent of the workforce, according to the industry body Eurofer, as prices crashed to decade lows due to overcapacity, shrinking demand and a flood of cheap imports, mostly from China.

The EU also has some of the world's highest energy costs and green taxes.

The seven ministers asked the Commission to make full use of the full range of EU policy instruments to tackle unfair trade.

The EU intends to impose duties on imports of cold-rolled flat steel from China and Russia following its investigation into alleged dumping by the two countries, sources said.

The ministers called for a separate investigation into imports of hot-rolled flat products from China.

"We should not wait until the damage from unfair practices becomes irreversible for our industry," they wrote.

European Trade Commissioner Cecilia Malmstrom urged China on Friday to curb overcapacity in its steel industry and said the Commission would open three new anti-dumping investigations this month on steel imports from China.

On Saturday, China said claims that it was dumping steel in Europe should be put to the World Trade Organization (WTO).

In Britain alone, some 5,000 steel industry jobs have been lost since October, equivalent to about a quarter of the workforce, and more cuts have been announced, notably by Tata Steel (TISC.NS), Britain's largest steelmaker, and Sheffield Forgemasters, one of its oldest.