EUROFER has strongly criticised China for its foreign trade-distorting industrial policies, claiming that they are detrimental to the recovery of the European steel industry.

The introduction of VAT export rebates (of between 9% and 13%) for Chinese steelmakers had promoted the export of higher value-added products, claims EUROFER’s director-general, Axel Eggert.

While the rebate was lifted on 1 January 2015 – meaning it no longer applies to steel products containing boron, a chemical element used to harden steel – Chinese steelmakers are getting round the rebate removal by replacing boron with other alloys, such as chrome.

"The boron-specific VAT removal is a welcome sign of China's awareness of concerns voiced by the global steel industry on China's steel policy and practices. But this measure is lacking commitment because it excludes the basic hot-rolled wide strip product while at the same time creating new incentives for Chinese exporters to continue enjoying the export rebate through the back door", Eggert explained.

According to Eggert, the result might lead to the European steel industry witnessing a continuation of the peak exports recorded in 2014 for alloyed products despite the rebate on boron-alloyed steel being dropped.

European imports of Chinese boron-alloyed steel products surged in the first 10 months of 2014 year-on-year by +83% (plate) and +375% (rebar).

According to Eggert, “Trade-distorting industrial policies by third countries are detrimental to the recovery of the European steel industry and destroy jobs in Europe”. He added that the EU must ‘vigorously act’ to re-establish fair trade for European steelmakers and strongly welcomed the European Commission’s awareness of the problem.