EU investigates Chinese hot-rolled steel, puts duties on road wheels

BRUSSELS (Reuters) - The European Commission said on Thursday it had opened an investigation into whether China and Indonesia are dumping hot-rolled stainless steel, used in car frames and machinery, in the European Union.

FILE PHOTO: A worker walks past steel rolls at the Chongqing Iron and Steel plant in Changshou, Chongqing, China August 6, 2018. REUTERS/Damir Sagolj/File Photo

Reacting to accusations by European industry that China and Indonesia are flooding the European market with cheap, subsidized steel, the Commission’s investigation could eventually lead to duties on imports.

Separately, the Commission said it had imposed provisional anti-dumping duties on Chinese steel road wheels, used for motor vehicles, of up to 66%, accusing Chinese exporters of selling them at below cost.

“Provisional measures should be imposed to prevent further injury being caused to the Union industry by the dumped imports,” the Commission said.

The Commission said in its Official Journal China’s market share in the bloc had last year doubled compared with 2015.

European industry accuses China and Indonesia of channeling government funds and offering other benefits to local steelmakers to export to Europe and win a greater share of the market, the Official Journal said.

If allowed to continue, cheap Chinese and Indonesian hot-rolled stainless steel means “further injury will crystallize from this situation of volume and price pressure,” the Official Journal said.

The accusations against China in particular are part of broader trade tensions with the European Union, which accuses Beijing of breaking World Trade Organisation rules.

From bicycles to solar panels, the European Commission has moved to limit Chinese imports via tariffs, often prompting Beijing to retaliate with its own anti-dumping duties.

China, the world’s largest stainless steel producer, churned out 26.71 million tonnes of stainless steel products in 2018, up 2.4% from a year ago, China’s Stainless Steel Association says.

Even before U.S. tariffs on Chinese steel in 2018, Beijing had been accused of diverting more exports to Europe and creating massive oversupply, European steel industry chiefs say.

Steel imports into the EU have more than doubled since 2013 while demand had increased only marginally and is seen falling in 2019, they said.

Reporting by Robin Emmott; editing by David Evans