Some in Brazil's steel sector worried about EU AD duties on HRC

11/10/2017 12:00 - 50 total view

The European Union's move to levy definitive anti-dumping duties on imports of hot rolled steel coil from Brazil will harm the country's exports to Europe, including transactions between plants that are part of the same company, according to Aco Brasil, the Brazilian steel institute.

"The Brazilian steel industry was disappointed with the news of the approval of the antidumping measures against Brazilian hot-rolled coils exported to the European Union, with the application of specific surcharges instead of the previously proposed mechanism of 'minimum prices,'" Aco Brasil said via email Monday.

The EU on Friday applied AD duties on imports of HRC from Brazil that range from Eur53.4-Eur63/mt. The measure takes the form of a fixed duty per metric ton added on to the CFR price once the material arrives in Europe. This system replaced the originally considered minimum import price, which the European Commission provisionally calculated to be Eur472.27/mt CFR.

The EU on Friday also confirmed definitive antidumping duties on HRC imports from Iran, Russia and Ukraine, while exempting Serbia, S&P Global Platts reported previously.

 

Aco Brasil said the move "makes Brazilian HRC exports to the European Union unfeasible, including affecting inter-company operations of companies located in Brazil that have reprocessing units in the European Union."

It also highlighted existing negotiations aimed at boosting trade with the EU. "At a time when the European Union and Brazil/Mercosur are negotiating a Free Trade Agreement to increase trade between the two blocs, such a measure should be seen as a setback."

Reaction by Brazilian steelmakers was mixed, with some expressing alarm at the decision while others expected little impact to their operations.

"Gerdau is assessing the imposition of anti-dumping tariffs by the European Commission on hot-rolled coils imported from Brazil as a cause for concern, as Europe is an important market for exports of this product from Brazil," the steelmaker said via email on Tuesday.

The company said that it "has always respected international trade rules, competing loyally with other players in the market."

Gerdau added that "it is important to note that international markets are closing and therefore it is fundamental that the Brazilian authorities take the appropriate measures to defend the domestic market to unfair competition, as Chinese and Russian manufacturers will seek alternatives to their products."

Usiminas, in a statement Monday, said it had expected the decision and shrugged off the impact.

"The announcement made by the European Commission was already expected as it is the result of a process initiated in July 2016. Europe has long been a non-representative market for Usiminas hot-rolled products, so no significant impacts are expected because of the measure."

Aperam said in a Monday statement that it did not anticipate any impact for its operations. It said that, "during the period of research conducted by the European Union, Aperam's operations in Brazil did not export to Europe. The company was cited in the final decision of the EU for being also a producer of carbon steels and non-oriented grains in Brazil and for being considered related to ArcelorMittal as it shares the same shareholder.

"Aperam does not export non-grain oriented steel to Europe. Therefore, no impact is expected by the company."

ArcelorMittal Brasil, however, noted that its "situation is specific in that the vast majority of sales to Europe are made to other companies in the ArcelorMittal group."

The company affirmed it "did not export HRC to Europe in 2017 and will assess the consequences of the decision on the export policy to the European market."

Steelmaker CSN declined to comment on the subject.
Source: S&P Global