27 January 2023 – The EU has imposed high anti-dumping and countervailing duties on stainless steel imports from Indonesia. The Indonesian government has now filed a request for consultations with the WTO to fight this. And Europe is reporting strong order books, falling availability and rising prices for steel. Mills already fully booked?
WTO: Indonesia brings EU stainless steel market protection measures before DSB
The Indonesian government filed a request for consultations regarding the Anti-Dumping and Countervailing Duties on Stainless Steel Products (SSCRFP) originating in Indonesia with the Dispute Settlement Body (DSB) of the World Trade Organisation (WTO) yesterday, Thursday 26 January 2023.
What are the consultations about?
This is to challenge the measures taken or not taken by the European Union with the definitive countervailing and anti-dumping duties on Stainless Steel Cold Rolled Flat Products (SSCRFP) in 2021 and 2022.
What is the period for consultations and beyond?
Consultations before the WTO DSB are the precursor to the convening of a DSB panel and must be concluded within 60 days. Subsequently, if no agreement is reached, a request for the establishment of a panel can be made. Should this happen, and it can be assumed that it will in the ongoing dispute between Indonesia and the European Union, the total period could extend to up to 21 months before a decision can be expected here.
What options are there for the EU?
Subsequently, if the panel’s findings do not meet with the respondent’s approval, there is the option of appealing to the WTO Appellate Body and lodging an objection against the DSB panel’s recommendations. Indonesia did this most recently in the dispute over the nickel export ban. This has put the dispute on hold for the foreseeable future, as the Appellate Body has been unable to act for years because the United States is blocking the appointment of new judges.
What is the likely outcome of the case?
Indonesia and the European Union have been at loggerheads for several years. Not only over nickel, but also over stainless steel and palm oil. So far, no agreement is in sight. Currently, the European Commission (EC) is also conducting an anti-circumvention investigation against stainless steel from Turkey originating in Indonesia, for which a decision is expected soon.
Thus, unfortunately, it should also be clear what the outcome of the consultations and the Dispute Settlement Panel will be in the end. Either the EU, as recently in the WTO EU Safeguard case, simply accepts and then puts forward a justification why the market protection measures are now justified, or the EU simply counters Indonesia’s appeal with its own appeal against the DSB’s findings before the Appellate Body, which is unable to act. This is yet another indication that the WTO is in urgent need of fundamental reform.
Steel: Strong order books, limited availability, prices rising
Reports continue to arrive from Europe that the order books of European steel mills are well filled and that availability, e.g. for HRC, is now clearly limited. Demand for stainless steel has also picked up considerably in the past few days, for 304/304L, among others, but also for 316/316L.
At the same time, market sources report that the Swedish steel producer SSAB, for example, is full to the brim with orders for armour plate and is fully booked. This is a clear sign that the European armourers are ramping up production and are now coming into focus as additional and very attractive customers for the domestic mills, as lucrative public contracts are tempting them. In any case, HRC prices continue to rise significantly.
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