An EU move to cut nearly a fifth of stainless steel supply via anti-dumping duties has given the bloc's mills only modest support as they continue to battle stubbornly poor demand and a China-led growth slowdown. The EU slapped anti-dumping duties in March on cold-rolled stainless imports from China and Taiwan and sources say sales from the two countries, which made up 17 percent of the market in 2013, have since collapsed. Also a boost for mills, Europe's top stainless maker Outokumpu shut down its German Bochum melt shop in June, removing about a tenth of EU 'melt' or crude capacity. The two factors mean mills are now utilising about 80 percent of output capacity, analysts say, versus about 70 percent in 2013. In theory this should boost their pricing power, but stainless base prices have been flat this year on lacklustre end use demand and as distributors have held off restocking in the hope of further nickel price falls. Nickel, used primarily to make stainless steel, accounts for between a third to a half of its final price. "Protectionist policies have allowed EU players to increase their market share but the market itself is doing nothing in volume terms. Where is the incentive for people to restock? Nickel prices are horrendous, China is a disaster," said CRU analyst Mark Beveridge. Long-standing concerns over global contagion from slowing China growth culminated in widespread investor panic this week despite increasingly radical measures by Beijing to avert a 'hard landing'. China accounts for half of global stainless consumption and its downturn has hit its stainless usage hard, pushing nickel prices to 6-1/2 year lows. The fall has in turn sent global stainless prices .IO62-CNI=SI to year lows, hurting nickel and stainless prices. "EU mills have not even been targeting stainless price rises. You need higher demand for prices to rise," said Alistair Ramsay, consultant at Metal Bulletin Research (MBR). Instead, EU demand has fallen around 2 percent this year, according to consultants CRU. The drop has forced mills to cut output despite the plunge in supply from China and Taiwan. Consultants MEPS say they expect this year's total crude output to fall by nearly 1 percent to 7.18 million tonnes. EU stainless dynamics are improving as increased capacity utilisation has made mills more efficient, increasing their margins, even if they are selling less units of steel at flat prices. Outokumpu and Acerinox both posted poorer than forecast second quarter results, but because their strong exposure to the United States more than offset what was a solid performance in Europe. Aperam by contrast posted a sharper than expected rise in second quarter profits. "As capacity utilisation continues to increase the EU stainless makers should regain pricing power. Base prices right now are at 1,080 euros a tonne and we expect a year end base price of 1,125," said Jefferies analyst Seth Rosenfeld. (Reuters)