Iron ore price rises on firmer steel outlook, but trade tensions cap gains
Lower Chinese steel product inventory driven by robust exports also supported iron ore prices above $100/t.
The European Union will limit imports of steel into the bloc following U.S. President Donald Trump’s imposition of metals tariffs after EU governments backed the plan in a vote on Wednesday.
It means that all steel imports will be subject to an effective cap until July 2021 to counter concerns of EU producers that European markets could be flooded by steel products that are no longer being imported into the U.S.
The European Commission said on Wednesday that EU member countries had backed its plan to impose “safeguards” and that definitive measures would enter force early in February.
EU member countries had backed its plan to impose “safeguards”
The bloc had already imposed safeguards on a provisional basis on imports of 23 steel product types in July, with an expiry date of Feb 4.
The Commission’s plan involves a quota set at the average level of imports over the past three years, plus 5 percent. A 25 percent tariff would apply once the quotas are filled.
There are also specific limits for major exporting countries. The quotas would apply for three-month periods in order to limit stockpiling and could also be increased by 5 percent each year.
European auto manufacturers association ACEA has called the measures protectionist. It has said that steel exports to the United States have only dropped slightly and so little extra steel has being diverted to Europe.
Import volumes into the EU increased significantly from March 2018
The Commission says that import volumes into the EU increased significantly from March 2018, when the United States imposed tariffs of 25 percent on imports of steel and 10 percent on aluminium. It extended these measures to the European Union, Canada and Mexico in June.
Steel group Eurofer, whose members include world number one ArcelorMittal and Germany’s ThyssenKrupp, has welcomed the safeguards.
The main exporters of steel to the EU are China, India, Russia, South Korea, Turkey and Ukraine.
(Reporting by Philip Blenkinsop; Editing by Francesco Guarascio, William Maclean)
