Korea to create additional domestic demand for steel amid EU safeguard

Korea will make efforts to create new demand for steel products to support local steelmakers following tightened import regulations imposed by the European Union this week, the Industry Minister said Wednesday.

Industry Minister Kim Jung-kwan chaired related discussions with representatives from local steelmakers in Seoul to find ways to support the companies against potential fallout from the new rules, according to the Ministry of Trade, Industry and Resources.

Starting Wednesday, the EU implemented new steel safeguards aimed at tackling global oversupply, with the bloc's overall tariff-free quota reduced to 18.35 million tons, down 46 percent from the previous 33.82 million tons.

Korea has been allocated a quota of 2.07 million tons, down 19.7 percent but less than the overall cut.

"The EU measure came amid the global oversupply of steel and protectionist measures rolled out by different countries," Kim said. "Such changes in the trade environment may repeat down the road."

The Industry Ministry said steel exports originally bound for the European market may flow into other markets, leading to intensified competition in other regions.

Amid the challenges, the Industry Ministry vowed to roll out a set of policies to minimize the impact of the EU policy on steelmakers.

In detail, the government vowed to coordinate supply chain cooperation among steelmakers, shipbuilders, defense companies and renewable energy businesses to generate new domestic demand.

"By bolstering industrial ties and rooting out unfair imports of raw materials, we can create demand of more than 510,000 tons, hovering above the quota reduction. The government will offer all-out support for the steel industry," Kim added.

Korea will also continue talks with EU authorities to maintain supply chain ties and mutual benefits under the bilateral free trade agreement, the ministry said.

Yonhap