The European steel industry is on the verge of collapse, according to the seven European Union (EU) countries that have called on the EU's European Commission (EC) to step in and tackle the issue of cheap steal from China and Russia flooding the European market.

The UK, Germany, France, Italy, Poland, Luxemburg and Belgium have demanded that the EU take steps to ensure a level playing field.  

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The seven countries sent a letter to the organization on Friday saying the EU "cannot remain passive when rising job losses and steelwork closures show there is a significant and impending risk of collapse in the European steel sector."

Increased Duties

Beijing has said that the EU should elevate its claims that China is dumping steel products into the European market to the World Trade Organization (WTO).

In a statement published on its website Saturday, the Chinese Ministry of Commerce urged the EU to seek WTO arbitration on its allegations that Chinese manufacturers are flooding the European steel market with products sold either below market prices at home or beneath the cost of production.

The agency released the statement following reports that the EU's executive body, the European Commission (EC), is moving to increase provisional duties on Chinese imported steel to as high as 16 percent later this month. 

The EU last week slapped a 13 percent anti-dumping tariff on Chinese steel imports in an attempt to save thousands of jobs across the continent, but the leaders of the European steel sector claim the measures are inadequate.  Reports indicate that the EC is set to impose even higher anti-dumping tariffs -- as much as 26 percent -- on Russian steel imports. 

Lost Jobs

The BBC says that Europe's steel industry has lost about a fifth of its workforce since 2008.  The European Steel Association (EUROFER) insists on higher numbers, saying some 85,000 steelworkers -- around 20 percent of the workforce -- have lost their jobs over the past six years alone.

Last month, the Indian company Tata Steel announced that it plans to cut 1,000 more jobs across the UK because of falling steel prices in Europe. 

European steelworkers and executives have argued that the cuts are the result of excessive volumes of low cost imported steel in the continent's market, mainly from China.

China's steel sector produces half the world's steel: more than the United States, the EU, Russia and Japan combined.  

TagsChina-EU relations, Chinese Steel Imports Europe, China steel industry