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EU to impose anti-dumping duties on electrical steel imports

[BRUSSELS] The European Union will impose anti-dumping duties next month on imports of a grade of electrical steel from five countries, according to sources familiar with a European Commission proposal.

The Commission plans to set tariffs of between 21.6 per cent for Russian imports and 35.9 per cent for Japanese imports of grain-oriented electrical steel (GOES) following a complaint lodged in June 2014 by the European steel producers association, Eurofer.

Duties will also cover imports from China (28.7 per cent), the United States (22 per cent) and Korea (22.8 per cent).

The Commission will present its proposal to EU member states this week and by May 14 will put in place the duties, which are provisional pending the outcome of an investigation due to end in November. Normally such duties would then continue for five years.

Grain-oriented electrical steel (GOES) is a highly-specialized product used by power producers and distributors to produce transformer cores and is made by only 16 producers worldwide.

Those in Europe are ArcelorMittal, Stalprodukt , Tata Steel and ThyssenKrupp.

Non-European producers include AK Steel, Russia's NLMK, Korea's Posco, Japan's Nippon Steel and Sumitomo Metal Corp, China's Baosteel and Wuhan Iron and Steel Corp.

Eurofer says dumped imports have damaged EU industry by driving prices to below the costs of production, causing substantial losses.

It says the market share of dumped imports into the European Union rose to 47 per cent in 2012, with most from Japan and Russia, and import prices have fallen by 30 per cent since 2011.

This means they sell some 150 million euros of product at prices below those of their domestic markets and, in some cases, to levels below the cost of production, Eurofer said.

The EU transformer industry says it is deeply concerned by the prospect of duties.

The Commission last month imposed anti-dumping duties on imports from China and Taiwan of cold-rolled flat stainless steel.

Eurofer has said that, despite a lower euro and a slow pick-up of European demand, European producers were still confronted with a massive increase of imports, especially from Asia and from China in particular.

Total Chinese steel exports rose to a historic peak of 93 million tonnes in 2014, the steel federation said, equivalent to 60 per cent of total EU steel consumption.

Seth Rosenfeld, steel analyst at Jefferies, said that GOES imports represented only about 1.5 per cent of all EU steel imports in 2014, making it a fairly niche product with only limited impact on the earnings of European steelmakers. "However, on the back of last month's announcement of new stainless anti-dumping duties, further protectionist policies by the European Commission may begin to portray a more proactive policy response than seen historically," he said.