British Steel which this week reported a 24% drop in profits could be dragged into a costly trade war with the US if new measures to safeguard that country’s producers are introduced.
Trade association UK Steel said the US International Trade Commission is considering imposing ‘safeguard actions’ on wire rod imports. These steels are used widely in the engineering and construction industries.
‘Safeguard actions will inevitably mean quotas,’ said Ian Rodgers, head of international affairs at UK Steel. ‘If they happen, all the European rod producers will be dragged in,’ he said.
British Steel would be hardest hit by such action as it directly exports these types of steel to the US. The UK steel group is already paying duties on its exports of leaded steel bar to the US.
Other British mills, such as Allied Steel & Wire and Co-Steel Sheerness, could also be hit indirectly as more steel is diverted from the US to the EU their principal export market.
US steel producers have already filed 35 cases for anti-dumping duties on a range of steel products against Asian, Brazilian and Russian producers. This threatens to divert more steel into already import-flooded EU markets.
EU mills are filing their own anti-dumping actions with the European Commission this week to try to stem imports, which rose 75% in the first six months of 1998. Suits are being brought against producers of strip steel in Asian, South African and eastern Europe.
British Steel blamed a fall in half-year pre-tax profits from £143m to £108m on the Asian economic crisis, which has diverted steel from the region into the US and EU markets.