May 08, 2008
EU Probes Chinese, Turkish Wire Rod, Widening Steel-Duty Threat
May 8 (Bloomberg) -- The European Union threatened to tax wire rod from China, Turkey and Moldova to help EU producers such as Corus Group compete against cheaper imports, opening the fourth probe that targets Chinese steel in five months.
The inquiry is into whether Chinese, Turkish and Moldovan exporters sell wire rod in the EU below cost, a practice known as dumping. The probe covers 1.2 billion euros ($1.9 billion) of imports of the product, which is used in construction.
The investigation will determine whether wire rod ``is being dumped and whether this dumping has caused injury,'' the European Commission, the EU's regulatory arm in Brussels, said today in the Official Journal. The commission has nine months to decide whether to impose provisional anti-dumping duties for half a year and EU governments have 15 months to choose whether to apply ``definitive'' levies for five years.
Steel may become the next friction point in EU-China trade relations amid European allegations the Chinese currency is undervalued and a trade deficit with the Asian country that rose 22 percent last year to 159.2 billion euros.
The 27-nation EU is already trying to stem imports of Chinese goods ranging from textiles and chemicals to ironing boards and bicycles through anti-dumping duties. The aim is to prevent Chinese exporters from undercutting higher-cost European manufacturers.
Eurofer Complaint
The probe into wire rod stems from a March 25 complaint by the Eurofer steel industry lobby group. It represents EU wire-rod manufacturers including U.K.-based Corus, Luxembourg-based ArcelorMittal, Germany's Badische Stahlwerke GmbH, Italy's Lucchini SpA and Spain's Celsa Group.
Eurofer is behind two other EU dumping inquiries covering Chinese steel. In mid-December, the commission opened a probe into imports of hot-dipped metallic-coated steel from China and, on Feb. 1, the EU regulator started an investigation into shipments of stainless steel from China, Taiwan and South Korea.
Another dumping case, covering Chinese steel wires, was opened by the commission in mid-February based on a complaint by a European producers' group called Eurostress Information Service.
To contact the reporter on this story: Jonathan Stearns in Brussels at jstearns2@bloomberg.net
By Jonathan Stearns
Last Updated: May 7, 2008 18:12 EDT