Undermining of EU trade defence jeopardises electrical steel value chain

Brussels, 5 October 2015 – A pending European Commission decision on ‘Minimum Import Prices’ (MIPs) for Grain Oriented Electrical Steel (GOES) would safeguard a vital strategic subsector of the steel industry and preserve the competitiveness of the European electrical transformer business.

“The European Commission found evidence of severe dumping of GOES on the EU market. This severe dumping has resulted in significant losses for EU producers, and has damagingly undermined the EU’s GOES-transformer value chain. Given the seriousness of the dumping – up to 40% below the cost of production – proportionate and definitive measures are necessary to enforce the EU’s trade defence rules,” said EUROFER Director General Axel Eggert.

Transformer companies who relied on sourcing dumped products at the expense of the value chain are those that continue to oppose the imposition of appropriate and balanced measures.

The European Commission has calculated a MIP price of around €2050 per tonne for this product group. Given that the price of premium-grade electrical steel is now above the €2300 per tonne it was in July 2010, it is clear that the proposed MIP measures would still permit duty-free access to foreign-produced GOES. This would mitigate fears of shortages for the transformer sector.

“The European steel industry holds that the Commission’s final proposal is a fair compromise that reasonably balances producer and user interests,” concluded Mr Eggert.




A summary of the EUROFER position on the dumping of GOES can be found in the Briefing Note, below.



Notes for Editors


The European Steel Association (EUROFER) represents members responsible for 100% of steel production in the European Union. Founded in 1976, EUROFER’s headquarters is located in Brussels. It is the voice of the European steel industry to policy makers, civil society and relevant stakeholders.

EUROFER’s members are steel companies and national steel federations based throughout the EU. The national steel federations and major steel companies of Switzerland and Turkey are also associate members.


About the European steel industry

The European steel industry is a world leader in innovation and environmental sustainability. It has a turnover of around €170 billion and directly employs 330,000 highly-skilled people, producing on average 170 million tonnes of steel per year. More than 500 steel production sites across 24 EU Member States provide direct and indirect employment to millions more European citizens. Closely integrated with Europe’s manufacturing and construction industries, steel is the backbone for development, growth and employment in Europe.

Steel is the most versatile industrial material in the world. The thousands of different grades and types of steel developed by the industry make the modern world possible. Steel is 100% recyclable and therefore is a fundamental part of the circular economy. As a basic engineering material, steel is also an essential factor in the development and deployment of innovative, CO2-mitigating technologies, improving resource efficiency and fostering sustainable development in Europe.


About Grain Oriented Electrical Steel

Grain Oriented Electrical Steel (GOES) is a type of steel that contains a relatively high silicon content of around 3%.

GOES is used in the cores of power and distribution transformers due to its excellent electrical and magnetic properties. These unparalleled magnetic properties are the result of its distinctive grain structure, which is formed in a complex production process that begins with high-silicon hot-rolled coil feedstock.



Charles de Lusignan, Communications Manager, +32 2 738 79 35 (charles@eurofer.be)


Briefing Note

Anti-dumping investigation on imports of grain-oriented electrical steel (GOES) originating in China, Japan, Korea, Russia and the United States

On 1 October 2015, T&D Europe issued a press release claiming that the Commission’s proposed measures for the imposition of minimum import prices (MIPs) would “fix the GOES prices at an unreasonably high level and much more expensive in Europe.”  This statement simply is not correct.

First, the MIPs do not fix prices. MIPs are not floor prices. Because of the variable nature of the proposed measures, import prices can freely drop below the Minimum Import Prices and be subject to only a progressive application of anti-dumping measures.  Any company importing at a price below the applicable MIP can seek reimbursement under Article 11(8) of the Basic Regulation of any anti-dumping duties paid by showing that dumping has been eliminated or reduced.

Second, the MIPs are set well below current market prices in the EU and foreign markets and would therefore allow users duty-free access to foreign-produced GOES and avoid any risk of shortage in supply.

  • Information presented to the Commission during its investigation shows that the price of premium GOES in the other major regions of the world such as Asia and the Middle East are at or above $3 000 U.S. dollars per tonne.  This is far in excess of the MIP calculated by the Commission for this product group of just under 2 050 Euros per tonne.
  • Similarly, the users own price data submitted to the Commission showed that current EU market prices are also well above the MIPs.  In fact, T&D Europe’s own price statistics show that current EU market prices are above the level of July 2010 when, as shown by the official EU import statistics, the price of premium GOES exceeded €2,300 per tonne.[1]   Again, this amount is far in excess of the MIP calculated by the Commission for this product group of just under €2,050 per tonne.

The MIPs are set at the absolute minimum and are just above the costs of production (providing an effective profit margin of less than 5%).  The MIPs would only become applicable if import prices again dropped to injurious levels.

Moreover, the Commission also has great flexibility in monitoring and adjusting the measures in the future.  If market conditions change, the Commission can adjust the measures by way of an interim review under Article 11(3) or temporarily suspend the measures under Article 14(4).

The proposed measures are therefore finely tuned to address only the effects of injurious dumping and would cause no competitive disadvantage to users.

The proposed measures represent a fair balancing of producer and user interests, and T&D Europe’s claim that the proposed measures are “sacrificing the EU Transformer Industry” is simply not supported by the facts.  The EU transformer industry will have unlimited, duty-free access to foreign-produced GOES at fair and competitive prices.

The proposed MIPs will also provide a level playing field for all European transformer producers.  It has not been the smaller European-owned transformer producers who have mounted the opposition to the Commission’s proposal.  In fact, two of the main European-owned users have voiced their agreement with the general framework of minimum import prices and the coverage of all products.  These users understand that with only 16 companies in the world capable of producing GOES, it is crucial for the European transformer industry and the maintenance and expansion of the Union’s electrical grid to have a strong and healthy GOES industry within the EU. 

It is rather the large multinational companies like ABB who have been most vehement in their opposition to the Commission’s proposal.  These large multinational companies have more direct access to dumped imports from countries like Japan and Korea to the detriment of the smaller European transformer producers.  Requiring these large multinational companies to abide by the internationally recognized rules against dumping like the smaller producers will certainly not saddle them with any undue burden.

ABB’s transformer business (known as its Power Products division) has been and remains quite profitable.  It has earned an operational EBITDA in excess of 12% going at least as far back to 2009.  In its 23 July 2015 press release for the second quarter of 2015, ABB notes that its Power Products division earned an operational EBITDA of 12.6% in the second quarter, stating:


Both large and base orders remained steady in the quarter, as selective investments by utility and industry customers continued. Higher orders in Europe, led by Germany, Italy and the UK, offset order declines in the Americas and AMEA.


Thus, ABB benefits greatly from its business in Europe.  Therefore any threats of moving its factories to countries outside the EU are most unwarranted.   There is no need to pit EU workers in the transformer industry against those in the GOES industry.  There is sufficient profitability within the supply chain so that each stage of production can cover its costs of production and earn a normal profit.  This is the best way to safeguard the highest number of jobs within the EU and provide for the long-term health of both industries.

The Commission’s proposal represents a significant modification from the provisional measures and makes large accommodations to address the concerns raised by users.  The European GOES industry has made substantial compromises in its position throughout the Commission’s investigation, while T&D Europe and certain large multinational companies have not moved from their original position of imposing no measures.  The Commission’s final proposal is a fair compromise and reasonably balances producer and user interests



[1] See T&D Europe statistics available at http://www.tdeurope.eu/data/TDE-INDICES-AUG15.pdf ; see also, Agoria statistics available at http://www.agoria.be/fr/Agoria-index/Mercuriale/Tableaux-recapitulatifs (item Tôles électriques à grains orientés).

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