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Anger over China steel imports

Europe’s steel industry is to call for anti-dumping measures against imports of Chinese steel.

An industry trade body is poised to file a complaint to the European Union that a surge in imports has been unfairly fuelled by Chinese government subsidies.

The move is likely to raise sharply the temperature of global trade disputes related to the fast-growing Chinese steel industry.

Philippe Varin, chief executive of Corus, the Anglo-Dutch steelmaker, told that the amount of Chinese-made steel reaching Europe was likely to double this year from 2006. These imports were “becoming a threat” to the health of the European steel industry.

Eurofer, the Brussels-based industry body, was preparing a file of complaints about unfair Chinese pricing, he said. This was likely to be presented to the trade directorate of the European Commission in the next three weeks.

“A lot of growth in Chinese steel production and exports has been helped by [government] subsidies,” Mr Varin said.

Eurofer is expected to argue that Chinese companies have exported round the world at prices that do not reflect costs.

Peter Mandelson, trade commissioner, has warned China several times in recent months that the surge is unsustainable. Chinese efforts to rein in production by eliminating some subsidies have had little effect.

“This is a difficult issue and one we have raised with the Chinese on several occasions. If an anti-dumping case is filed we will investigate thoroughly,” Mr Mandelson’s spokesman said.

EU officials believe, however, that a complaint from the steel sector would not necessarily lead to trade restrictions. Many other industries that use steel, such as engineering and construction, are likely to be in favour of Chinese steel imports.

This year Eurofer estimates Chinese steel imports into the EU this year will total 10m tonnes, compared with 5m tonnes last year and 1m tonnes in 2005.

This year’s total is expected to be about a third of all imports into the EU. European companies fear such a surge could lead to lower European steel prices, which have been high for several years.

In the past decade China’s steel industry has expanded rapidly and is by far the world’s biggest producer, responsible for more than a third of global output.

Two months ago, the US steel industry said China’s steel companies had benefited from $52bn of government subsidies in recent years. In a report, it said the subsidies had had a “pervasive influence” and enabled China’s industry to grow so fast.

Until now, however, Europe has failed to follow the same tough line, and as a result there are no restrictions on imports.

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