Jun 08, 2023
EU anti-fraud authorities discover massive duty-circumvention scheme on steel imports from China

The European Union anti-fraud authorities discovered a €6.5 million ($6.9 million) duty-circumvention scheme involving China-origin heavy plate imports, regional steel industry association Eurofer reported on Wednesday June 7.

The European Anti-Fraud Office (OLAF) revealed that an EU-based importer has been evading the payment of anti-dumping duties on China-origin heavy plate by making fraudulent import declarations, the Eurofer statement said.

A number of sources told Fastmarkets on Wednesday that “substantial tonnages” of China-origin plate were “frozen” in Belgian ports as a result of investigations into suspected fraudulent activity. 

“The product in question is heavy plates from China, which was imported under the wrong code to avoid an average of 73.3% anti-dumping duty” Eurofer director general Axel Eggert said.

“The total amount of financial damage across the EU amounts to €6.5 million, with possible additional financial and criminal consequences,” Eurofer’s release said.

The fraud was uncovered thanks to joint efforts of OLAF and the European Public Prosecutor Office (EPPO), with the cooperation of customs authorities in different EU member states, Eurofer said.

The Eurofer release did not disclose the name of the importer, but several sources familiar with the matter told Fastmarkets they understand the importer in question is a trading company in Western Europe. 

The European Commission imposed definitive anti-dumping duties at rates of 65.1-73.7% on heavy steel plate from China in 2017.

Before the duties were imposed, China was the major heavy plate supplier to the EU, accounting for 50%, or 1.3 million tonnes, of all EU imports in 2015, according to Eurofer.

European plate market situation

European heavy plate prices reached historical peaks in 2022 as a result of panic buying triggered by Russia’s invasion of Ukraine.

Fastmarkets’ price assessment for steel domestic plate, 8-40mm, exw Northern Europe averaged €1,893.75 ($2,018.83) per tonne in April 2022, an all-time high since the launch of Fastmarkets’ assessment in April 2008. The monthly average was up by €386.75 per tonne from €1,507.00 in March 2022.

Plate prices declined across Europe from May 2022 until January 2023 due to initial overstocking after Russia’s invasion of Ukraine, coupled with shrinking end-user demand.

Plate prices started to recover in January 2023 due to restocking activity, better demand and reduced supply.

Aside from output cuts implemented by European mills during the last quarter of 2022 to balance the market, missing volumes from Ukraine and Russia contributed to the lack of supply.

Ukraine used to be a major supplier of steel plate to the EU, with deliveries of such material accounting for nearly half of the EU’s plate imports.

In 2021, Ukraine delivered 864,637 tonnes of plate to the EU — 43% of the 2.02 million tonnes imported by the EU that year, according to Eurofer statistics.

This far exceeded volumes from the Russian Federation, which supplied 280,941 tonnes of plate to the EU in 2021.

In 2022, exports from Ukraine to the bloc dropped to 195,719 tonnes, Eurofer statistics show.

Ukraine’s key plate-producing assets were Metinvest’s Mariupol-based plants, Azovstal and Ilyich Iron & Steel. Metinvest has lost control of both to Russia.

German mills, meanwhile, traditionally have been more focused on long-term contracts for projects rather than spot sales. Mills in Central Europe also had limited volumes to offer. Notably, one integrated mill in Poland and a Czech Republic-based reroller have been running at reduced rates recently due to internal problems.

Suppliers from Asia increased plate deliveries to the EU during 2022, but total plate imports into the EU in 2022 fell to 1.74 million tonnes from 2.02 million tonnes in 2021.

During 2022,  Indonesia more than doubled its shipment volumes, with plate deliveries from the nation to the bloc totaling 325,637 tonnes in 2022 compared with 127,157 tonnes in 2021.

India supplied 344,823 tonnes of plate to the EU in 2022, up from 255,266 tonnes in 2021.

Japan also doubled plate supply to the EU, to 137,192 tonnes in 2022 from 63,012 tonnes in 2021.

And Turkish mills shipped 52,470 tonnes of plate to the EU in 2022, up sharply from 8,636 tonnes in 2021.

European plate prices have dropped recently due to slow apparent demand and declining raw materials prices, Fasmtarkets has reported.

Published by: Julia Bolotova

Source: Eurometal