European Steel Producers Ask For Chinese Sanctions

Steel industry group Eurofer says steel producers are asking the European Union to slap a 40 percent surcharge on soaring imports of below-cost Chinese steel.

BRUSSELS, Belgium (AP) — European steel producers are asking the European Union to slap a 40 percent surcharge on soaring imports of below-cost Chinese steel, a spokesman for the steel industry group Eurofer said Monday.
Gordon Moffat of the European Confederation of Iron and Steel Industries, or Eurofer, said China's output was ''out of control'' and talks with the government have failed to cap overcapacity.
''We've seen an enormous increase in tonnage from virtually nothing prior to 2004 to 12 million (metric) tons last year,'' he told The Associated Press.
In a formal complaint to the European Commission, Eurofer puts forward evidence to show that galvanized steel sheets used in construction and stainless steel cold sheets used for building and engineering products are being dumped at prices 25 to 30 percent below the European average.
They claim this breaks trade rules and the EU has the right to take action, demanding a 40 percent duty be applied on imports of these steel products from China.
Moffat said there were also problems with other Asian countries that are trying to sell steel abroad that they can't offload in their own saturated markets — but said China's overcapacity was the root of the problem and this had ''ruined their own market.''
EU antidumping charges on imports were the only possible remedy for the industry, he said, since the Chinese central government has been unable to restrain output.
The EU can now take a couple of months before starting a formal probe during which it gathers evidence. The soonest there would be any hint of trade sanctions would be next year, when officials make a recommendation and EU governments decide what to do.
Recent EU statistics bear out Eurofer's complaints: Steel imports from China from January to September 2007 grew 137 percent from the same period last year to 8.9 million metric tons.
Europe's yawning trade gap with China widened by nearly 25 percent in the first seven months of this year — causing European officials to call on China to do more to open its own markets to European and other foreign goods and services.
EU and Chinese officials will hold a Nov. 28 summit in China as European economy officials call on China to revalue its currency — part of the problem because its low level against the U.S. dollar and the euro makes it cheap for the rest of the world to buy from China — but expensive for China to import from others.
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