EU investigates stainless steel dumping by Asian steel mills

Eurofer complained last October about global trade violations

By Tom Stundza -- Purchasing, 2/4/2008 6:07:00 AM

The European Union began an investigation last Friday into whether steelmakers in China, South Korea and Taiwan are exporting stainless steel cold-rolled sheet to Europe below cost, a practice known as dumping.

European news reports say the dumping inquiry will take between seven and nine months and will focus on flat-rolled stainless steel used to make panels for automobiles and washing machines. If investigators find Chinese, South Korean or Taiwanese steelmakers have been setting steel prices artificially low to gain market share, the EU can impose punitive tariffs under global trade rules.

The investigation stems from previous complaints by European steelmakers. Purchasing.com reported in November that EU Trade Commissioner Peter Mandelson was leaning toward investigating a complaint by steelmakers ArcelorMittal and ThyssenKrupp about cheap imports of stainless steel cold-rolled sheet from China, South Korea and Taiwan.  

“We welcome the news that the preliminary analysis of the European Commission confirms that there is sufficient evidence both in terms of dumping and injury caused to the European industry to justify the initiation of a proceeding,” according to Gordon Moffat, director general of the European steelmakers association Eurofer. That association complained to Brussels in October that China and other countries were dumping steel in the EU.

Market watchers say a major part of the problem stems from the fact that China ramped up steel production to supply a building and infrastructure boom, much of which was for the summer Olympics in Beijing. Now that construction is tapering off, China has millions of extra tons of steel to export, most to Europe. In fact, Eurofer estimates that Chinese steel exports to the EU probably doubled in 2007 to 10 million metric tons from record levels in 2006.