Czech steelmakers fear flood of Chinese imports
China’s relative economic downturn means that a lot of its low cost steel is being exported around the world with Europe one of the main target markets. And already worried Czech steel makers fear that even worse might be on the horizon if changes soon abolish Europe’s opportunity to take protective steps.
To give this a bit of context, China is by far the world’s biggest steelmaker, accounting for around half of world production, and its increasing production overcapacity exceeds the manufacturing capacity of all European Union steelmakers put together.
Czech and other European steelmakers warn the current wave of low cost steel imports into the EU is only a small taste of what could be to come if China wins a change in its trade status at the end of this year. The recognition at stake is Market Economy Status with Beijing arguing that if this is granted then the European Union will have to drop its biggest defense measures against cheap steel imports, so-called anti-dumping duties.
Czech producers, such as Arcelor Mittal Ostrava, Třinecké Železárny, and Vítkovice Steel, are ringing the alarm bells and say around 15,000 direct jobs and around 45,000 more linked to the steel industry in Moravia and Silesia could be at risk.
Chairman of the Board of ArcelorMittal Ostrava, Tapas Rajderkar, told Czech Television that China in no way qualifies for Market Economy Status.
“In the case of China they are being supported by the government and the government missionaries, so China does not fulfill four out of the five conditions that are needed.”
Basically the five conditions call for companies to be operating in a clear legal environment where there is no state intervention and help.
And the Czech government as well has the problem of Chinese steel imports on its radar screen. It is one of the issues that will be broached by Minister of Industry and Trade, Jan Mládek, in a meeting with his Polish counterpart today. The Polish steel industry has similar fears to the Czech. This is what the minister had to say:
Talks over China’s status are just starting at the moment but will be the centre of major attention in the months to come.