Whether the EU's anti-dumping investigation on Chinese fasteners will lead to the deterioration of the European fastener supply chain

Release time:

2021-06-21

Whether the EU's anti-dumping investigation on Chinese fasteners will lead to the deterioration of the European fastener supply chain

　Background of anti-dumping investigation

On 6 November 2020, the European Commission received a complaint from EU steel fastener manufacturers and related interest groups represented by the European Industrial Fasteners Association under Article 5 of the Law on Dumping of Products from Non-EU Member States (2016/1036) published by the European Parliament on 8 June 2016. The content claims that specific steel fasteners from China continue to be dumped into the EU, thus causing material damage to specific steel fastener manufacturers in the EU.

The products involved in this anti-dumping investigation (case number AD676) include certain steel fasteners (excluding stainless steel), that is, wood screws (excluding carriage screws), self-tapping screws, other screws and bolts with head design (whether or not with nuts or washers, but excluding screws and bolts for fixing railway track construction materials) and washers.

The fastener products involved in this case are classified into CN codes 73181290, 73181491, 73181499, 73181558, 73181568, 73181582, 73181588, ex 73181595 (TARIC codes 7318159519 and 7318159589), ex 73182100 (TARIC codes 7318210031, 7318210039, 7318210095 and 7318210098) and ex 73182200 (TARIC codes 7318220031, 7318220039, 7318220095 and 7318220098).

According to the relevant period announced by the European Commission, if the fastener products involved in this case are decided by the Executive Commission on July 21, 2021, they will face temporary anti-dumping measures.

According to the latest statement issued by the European Fastener Dealers Association EFDA on June 4 in response to the progress of this investigation, the members of the association are mainly EU fastener dealers and importers, importing more than 1 million tons of standard fastener products from Asia and the Far East each year.

　　Facing possible anti-dumping measures

EFDA says fastener shortage will threaten EU economy

In the near future, the European Commission is about to make a decision on whether to implement temporary anti-dumping measures on steel fasteners imported from China, Dr. Volker Lederer, President of the European Fastener Dealers Association, said: "if the anti-dumping duty rate is implemented on Chinese fasteners, the screws and other fastener products needed for EU economic development may not be able to guarantee a sustained and stable supply. High capacity utilization, shortage of raw materials and transportation problems have pulled the international supply chain into unprecedented chaos, making it impossible for European fastener dealers to supply fastener demand from all walks of life in Europe in a timely manner. Under such abnormal circumstances, if the EU really imposes additional taxes on specific steel fasteners imported from China, it will create a so-called 'perfect storm '."

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Dr. Volker Lederer, President of the European Fastener Dealers Association

On December 21, 2020, the European Commission launched an anti-dumping investigation (case number AD676) against Chinese imports of certain steel fasteners. If the entire investigation process is completed, it may be imposed on fasteners such as the protective tax rate previously implemented from 2009 to 2016. At that time, the tax rate of up to 85% on Chinese products made the EU's fastener trade with China into a comprehensive stagnation. Although the World Trade Organization publicly declared the EU measure illegal in 2016, it has already caused harm to local economies. European fastener manufacturers have not taken corresponding measures to significantly increase the production of so-called standard parts. Most of them are betting on the high-quality special parts that the European car industry needs. Standard parts must still be purchased from the Far East or other regions of the world.

In the next few weeks, the European Commission will decide whether to implement the temporary tax rate in the summer. It is currently in the investigation stage, and the executive committee is also collecting the votes of EU member states. However, the global fastener market is quite chaotic at this stage. Since the beginning of this year, the transportation time of fasteners has been doubled or even tripled, up to 12 months. There is currently no alternative in Asia or Europe that can completely replace China. In other Southeast Asian markets, such as Taiwan, Thailand or Vietnam, production capacity was largely eaten by U.S. manufacturers a few years ago in response to protective tariffs on Chinese imports imposed by the Trump administration at the time.

Travel restrictions arising from the outbreak have prevented European importers from making factory visits and audits that must be done before new suppliers can cooperate. Shortages of raw materials such as steel or rod wire are exacerbating problems on the supply side. The impact of the ongoing global maritime transport and container shortages, as well as the impact of the Suez Canal crisis, means that Europe will face more significant transport delays and additional costs. Procurement in Europe as an alternative is also largely impossible to consider. European manufacturers currently do not have any excess capacity, and should not and are not willing to produce sufficient quantities of the necessary standard fasteners to meet the needs of the European industry.

European fastener suppliers supply a series of standards and special parts for the European industry, and ensure that products can be obtained in the right place at the right time. Its main customers include manufacturers in the automotive, machine building, construction, wind energy, agriculture, furniture, craft and DIY industries. For these manufacturers, the continuous availability of standard parts is indispensable, so that their products can continue to be produced in Europe and successfully sold on the global market.

Lederer chairman said: "Europe must now do its best to ensure the global competitiveness of its own industry, and there is no need to complicate the supply of essential products such as fasteners. In order to get back on its feet from the new crown crisis and avoid the collapse of the European production chain, the European economy will need the capacity of the entire Asian procurement market (including China). But in the presence of anti-dumping duties, the EU's wheel of recovery will suffer significant obstacles."

EU Anti-dumping against China (Case No. AD 676) Expected Schedule

Initiation of Investigation D
　　12/21/2020

It is anticipated that during field visits
　　03/08/2021-04/03/2021

Forecast Release Time
　　07/20/2021

Temporary measures
　　07/21/2021

Deadline for presentation of comments on forecast release time/temporary measures
　　09/01/2021

Deadline for submission of comments on the final resolution
　　11/08/2021

Final Resolution Measures
　　02/17/2022

(Source: Huida)