BRUSSELS (Reuters) - The European Commission said on Friday it had launched an investigation into possible illegal subsidies to Chinese exporters of hot-rolled flat steel, adding to an existing study into alleged dumping of the product.
The Commission said both the dumping and subsidy cases were part of a new procedure allowing investigations to begin when there was the threat of injury to EU producers, rather than waiting for harm to be done.
The alleged subsidies consist of direct state transfers of funds, tax breaks or other waiving of income due to the government and state provision of goods or services at sub-par prices.
The twin investigations, resulting from complaints by EU steelmaker association Eurofer, are part of an international focus on China's overcapacity in steel, although Beijing says the issue of excess capacity is a global one for all countries.
Cheap Chinese steel exports are cited as one reason for Tata Steel's (NS:TISC) decision to sell its entire British steel operations, threatening 10,000 jobs.
The EU now has 10 ongoing trade defence investigations into steel products, in addition to 37 anti-dumping and anti-subsidy measures already in place. Seven of the investigations and 15 of the measures concern steel products from China.
The Commission has nine months to determine whether to impose provisional duties on Chinese imports.
