Canada, Egypt next to impose steel safeguards

European market participants expect Canada and Egypt to be the next countries to introduce safeguard measures on imports of steel, they said at the Eurometal Steel Net Forum in Hamburg yesterday.

This will likely have consequences for trading with the EU, with some expecting similar measures to those already introduced by the EU and Turkey.

A Canadian finance official confirmed that the government concluded consultations with interested parties on 29 August, and is "considering the input received in order to determine the next steps".

If a safeguard investigation is not initiated, Canada could begin an anti-dumping probe for some product groups, one steelmaker expects.

EU countries exported 579,800t of steel to Canada in 2017 — the majority of which was heavy sections — and 474,500t to Egypt, of which nearly 130,000t was hot-rolled strip and 70,500t was quarto plate.

Exports to these destinations have edged up this year, after EU mills' access to the US market was restricted in March with the imposition of 25pc duties.

The repercussions of safeguards in Canada and Egypt could be more severe for other exporters, such as Turkey. Turkish producers, which face 50pc duties in the US market and quotas in the EU — historically some of the largest destinations for Turkish steel — are also grappling with a weak domestic market and currency.

"2019 will be a rough year, but we will not repeat the situation of 2015," a Turkish steelmaker said yesterday. "We will shut facilities down, but we will not sell below cost. If nothing changes in 2-3 months, it is likely that Turkish producers will lower capacity utilisation," he added.

Additional protectionist measures this year are proving detrimental for traders as well, market participants said, noting the increasing regionalised nature of steel trade.

It is becoming increasingly not worth it for traders to import into the EU from destinations further away for a couple of dollars of profit, a trader said. "Buyers prefer to source locally, because of lead times, cost of freight, and import measures," he added.

Distributors are finding it harder to compete in Europe, with many smaller ones not able to import from third countries. "If you cannot import, you cannot compete," a distributor said, while a stockholder expressed his concern about a potential lack of material in Europe next year once definitive measures are introduced.

Market participants expect initial findings on the safeguard investigation to be released by the European Commission in late November to early December, and for definitive measures to be put in place by early February at the latest. The measure is likely to be partly in the form of individual country-based quotas.