EU steel safeguard plan risks higher prices: auto makers

The European Automobile Manufacturers' Association (ACEA) said Wednesday that it is most concerned about the inflationary impact that an effective continuation of the European Commission's steel safeguard system will have on European market prices.

ACEA warned that changes to key safeguard parameters will significantly reduce the possibility of relieving pressure on the European market through imports.

In addition, a new rule of origin based on the "melt and pour" principle will further restrict imports and create a massive administrative burden for European users of imported steel products.

The commission needs to look individually at sectors such as automotive where, despite a heavy reliance on domestic steel supply, manufacturers still need to import certain quantities and qualities. Quotas for automotive grades have consistently been rapidly exhausted over the last seven years of the safeguard. The commission also needs to understand the complexity of applying the "melt and pour" rule of origin in deep and global supply chains such as automotive.

The European Commission unveiled a plan on Tuesday to protect the steel industry of the bloc, with measures including the dramatic lowering of tariff-free import quotas, the doubling of the out-of-quota tariff to 50 percent and a new rule of origin.

Oil prices declined on Monday.

The West Texas Intermediate for December delivery dropped 18 cents, or 0.3 percent, to settle at 59.91 U.S. dollars a barrel on the New York Mercantile Exchange. Brent crude for January delivery lost 19 cents, or 0.3 percent, to settle at 64.20 dollars a barrel on the London ICE Futures Exchange.