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Spain calls on Brussels to limit Chinese steel imports after Brexit

Industry minister sends letter to European Commission highlighting the “difficult situation” for the sector

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A worker at a steel plant in Sestao (Bilbao). REUTERS

The caretaker industry, trade and tourism minister, Reyes Maroto, has sent a letter to the European Commission asking for a review of post-Brexit “safeguard measures,” or temporary restrictions on imports, affecting steel products coming into Europe.

While the letter does not mention them openly, it is targeting steel imports from China, a country that accounts for more than half of global production and that exports steel at prices that make it very difficult for European producers to compete with, said ministry sources.

The Spanish steel industry experienced a trade balance deficit for the first time in a decade

The request, dated October 8 and to which EL PAÍS has had access, is addressed to the outgoing trade commissioner, Cecilia Malmström, whose term ends on October 31. She will be replaced by Phil Hogan.

Maroto notes in the letter that “steel companies in the Union are in a difficult situation, to the extent that some production lines and plants are considering closure due to the shortage of demand and competition from imports.”

Once Britain leaves the European Union, the Commission should “carry out an urgent review of safeguard measures in order to adapt to the new situation,” the minister urges.

Although the letter acknowledges a review that took place on September 4, and which Spain supported, the minister believes that the Brexit process makes a new review necessary, especially if the UK crashes out of the EU with no deal.

Limiting steel imports is “of great interest to Spain, given the relevance of the sector in our country and the difficulties that it has recently encountered.”

During Maroto’s term at the industry ministry, the steel multinational Alcoa announced it was shutting down two plants in Spain. The auto industry’s slowdown is also affecting national steelmakers, said the industry association UNESID last summer.

The Spanish steel industry produced 14.3 million tons of steel in 2018, a 0.8% drop from the previous year, according to UNESID. Spanish companies exported 8.5 million tons worth nearly €8 billion, a 0.6% rise from 2017, according to the Tax Agency.

But imports increased by 8.6% in terms of volume (10.8 million tons) and by 13.4% in terms of value (to €8.2 billion), which resulted in a trade balance deficit for the first time in a decade. Although the price of Spanish steel decreased, it was still nearly €200 more expensive than imported steel: €938 per ton versus €758 per ton.

English version by Susana Urra.

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