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EU opens review of safeguard measures on steel product imports

London — The European Commission has on Friday opened its initiation review of the safeguard measures on a number of imported steel products, focusing in particular on investigating why certain quotas were filled quickly.

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The EC will focus on understanding why certain country-specific tariff-rate quotas were exhausted at an unusually fast pace. These include Turkey (organic coated sheets, rebars, wire rod, large welded tubes), Russia (rebar and rod) and China (coils for automotive (4B) and stainless rod).

The Commission will "examine whether there are changed circumstances justifying an adjustment in the level or the allocation of the existing tariff-rate quota," the EC said.

"For certain product categories, the residual tariff-rate quota has been exhausted rapidly with imports from one or several countries, sometimes benefiting from country-specific tariff-rate quota, crowding out traditional import flows from other origins, thereby restricting customers' choice. This has for example been the case for product categories 4B [coils of auto] 13 [rebars] and 16 [wire rod]," it said.

"The Commission will therefore investigate whether this fact has adversely affected the Union interest, in particular regarding the need to maintain traditional trade flows, and, where appropriate, decide potential remedies for this situation," the EC notice said.

The EU review starts just a day after the US administration announced its decision to return to 25% import tariffs on Turkish products, down from 50% previously.

"The revision needs now also to take into consideration that a lot of products from Turkey went into Europe quickly, because for the Turkish mills it was very difficult to enter the US market due to the high import tariffs," the head of Italian steel distribution association Assofermet, Tommaso Sandrini, told S&P Global Platts Friday. "But now that they have been halved, trade flows could change again."

"We will have to wait and see what, if any, effect there is from the return of the tariffs to the original 25% level," a Eurofer spokesman said Friday.

"Deflection to the EU was happening even before the tariff was raised to 50% for Turkey, so it is unclear whether they would regain access to the US market with the tariff change," he said.

"The safeguard has incited exporters to the EU market to rush to stockpile certain types of steel in order to grab as large a part of the quota as possible," he said. "Eurofer is addressing these concerns with policymakers regarding the design and the upcoming revisions of the unfinished safeguard."

On 31 January, the European Commission imposed safeguard measures consisting of a tariff-rate quota on imports into the EU of 26 steel product categories. They will remain in place until 30 June 2021. Market participants now have 15 days to submit their views and provide supporting evidence to the Commission.

-- Annalisa Villa, annalisa.villa@spglobal.com

-- Edited by James Burgess, newsdesk@spglobal.com