In a letter to Stéphane Séjourné, European Commission executive vice-president, and Maroš Šefčovič, European Commissioner for trade and economic security, the European Federation of Steel, Tubes and Metals Distribution & Trade (EUROMETAL) raises serious concerns about the exclusion of steel derivatives and downstream products from the EU’s current safeguard framework.
The federation said it supports the Commission’s efforts to address global steel overcapacity, though it cautions that the proposed measures, which focus on primary steel protection - if not adjusted - risk accelerating the displacement of EU manufacturing and distribution.
Downstream producers face threat to their survival
According to EUROMETAL, the cost of steel accounts for up to 70 percent of total sales in steel-processing companies, while average profit margins rarely exceed 1-2 percent. A 10 percent rise in EU steel prices under the new safeguard regime could drive many processors and manufacturers out of business before the end of the planned two-year review period.
Excluding derivatives, EUROMETAL warns, would allow “cheap processed imports” to flood the market.
EU risks becoming dumping ground for low-cost steel products
EUROMETAL stated that imports of steel derivatives have been displacing EU manufacturers by offering finished products at prices below what EU firms can match, even before the safeguard reform takes effect. The group cautions that, unless the scope of safeguards is extended to steel derivatives and downstream products, the EU risks becoming the global “dumping ground” for low-cost steel products.
Accordingly, EUROMETAL urges the European Commission to:
- extend safeguard coverage to derivatives and downstream steel products;
- conduct an impact assessment on processors, distributors, and SMEs;
- maintain flexibility tools such as carry-over mechanisms;
- ensure fair access to competitively priced materials;
- adopt country-specific quotas to improve predictability and support responsible trade flows.