The document discusses the European steel industry and import quotas. It provides context on the steel industry in Europe and how import quotas were introduced in 2018 to prevent a surge in steel imports. The quotas were then increased by 3% in 2020 due to falling domestic production and demand during the pandemic, which had reduced European steel demand by over 50%. However, some argued quotas should be reduced to help indigenous producers during the economic downturn.

1. European Steel Industry: Impact of Import
Quota
Presented by
Group 11
ARCHANA KUMARI SAHU-18010121019
TAMALAMPUDI VENKATA RAMA REDDY-190101217055
RISHABH KUMAR PANDEY-190101217086
SUNDARA RAJAN N-190101217119
PARTHA JYOTI SINHA-190101217177

2. INTRODUCTION
 The steel manufacturing industry had been one of the key drivers of Europe’s
economic growth, providing employment and fostering innovation across the
EU member nations.
 More than 500 steel production sites across 24 EU member states.
 EU steel sector played a key role in the development of Europe’s wide array
of manufacturing, engineering, and construction industries.
 EU represented 10% of the global steel demand at 169.7 million metric tons in
2018.

3. CASE SUMMARY
 On June 30, 2020, the European Union (EU) announced that steel import quotas would go up by
3% during the 12 months starting from July 1, 2020.
 The EU had introduced import curbs on steel in 2018 to prevent global shipments from being
redirected to the European market after the US imposed a 25% steel tariff that discouraged
many exporters from entering the US market.
 The European steel industry was almost stagnant in 2019 due to multiple factors such as a cut in
domestic production, persistent global overcapacity, growing imports, and weak demand from
the manufacturing sector.
 The fall in European steel production compelled the manufacturers to place workers on short-
time working hours or initiate temporary lay-offs.
 It resulted in a cut in new steel orders (down 70-75%), resulting in the idling of steel plants and
even the few of shutdown.
 As of June 2020, the demand for steel in Europe had dropped by 50% since the start of the
pandemic in March 2020, triggering the fear that jobs could be lost and sales impacted adversely
if more and more inexpensive steel was imported.

4. Understand import safeguard quota measures
imposed by countries
 India - The steel ministry has proposed incentives worth Rs 3,346 crore under a
production-linked incentive scheme and a phased manufacturing programmed to boost
domestic production of various grades of steel that are largely imported.
 India’s imports of iron & steel and their products, which stood at $16.3 billion in FY15,
dropped to $11.7 billion by FY17 before inching up again, as some of the safeguard
measures ceased to exist.
 The imports picked up to $17.7 billion by FY19 before easing to $15.4 billion last fiscal.
In the April-July period of this fiscal, such imports crashed by almost 45%, year on year,
mirroring a broader import slump in the wake of the Covid-19 pandemic.

5. United States
 The United States lowered its import quota for shipments of semi-
finished steel from Brazil for the remainder of 2020, amid challenging
conditions in the domestic market, according to a presidential
proclamation issued late Aug. 28.
 After increasing in 2018 and 2019, steel shipments by domestic
producers through June of this year are approximately 15% lower than
shipments for the same time period in 2019, with shipments in April and
May of this year more than 30% lower than the shipments in the same
months in 2019.

6. Impact of import quota during a pandemic situation
 According to Eurofer, EU imports of hot-rolled coil in February 2020 were 533,519
metric tonnes, a fall of 22% from January of the year and 11% lower than February
2019.
 As the pandemic triggered the European region’s economy slowed down and impact on
the Europe region’s steel demand, which had fallen by more than 50%.
 The developing countries are having a hard time by the reduction in import quota as
they rely on developed countries to export them goods.
 As for the Steel goods import quota in European union it has not been reduced by a
large portion hence the exporting countries have suffered low loss.
 But the increasing import goods and low demand in European region during this
pandemic will cause excess supply and will affect the indigenous suppliers.

7. The need for import quota reduction during a pandemic
 The EC began a routine review of the EU steel-import limits in February 2020, when
the steel producers demanded a massive quota reduction.
 Since all countries are affected by the pandemic the main need to reduce the import
quota is to eliminate rising trade deficit and restore trade balance between countries.
 The domestic market traders will suffer a huge financial blow if the import rate is
same but the export rates are dropped due to the restrictions in other countries.
 To Eliminate the inventory overflow of goods and other expenses by the companies due
to fall in demand.
 As for Eurofer the import quota reduction is needed to meet and reflect the actual
market conditions due to this pandemic.

8. How the import quota reduction can help indigenous
producers
 Lower import quotas means lower tariff rates thus the indigenous producers
can buy imported goods for cheap and sell them.
 The import restrictions allows more domestic products to be supplied thereby
increase in their sales.
 Import substitution is achieved in the country by making the domestic
producers as the primary suppliers of the goods.
 Even though there is a fall in demand the domestic producers can still make
profit with import quota reduction as they meet most of the demands
currently in the marketplace.

9. Reference
 https://www.financialexpress.com/industry/aatmanirbhar-bharat-
restrictions-on-steel-imports-expanded-govt-directs-traders-to-register-with-
sims/2094583/
 https://www.spglobal.com/platts/en/market-insights/latest-
news/metals/083120-us-lowers-2020-import-quota-for-brazilian-semi-
finished-steel
 https://ec.europa.eu/growth/sectors/raw-
materials/industries/metals/steel_en

10. THANK YOU