European steel industry threatened
by Hans Diederichs
CEOs of Europe’s steel companies have signed a joint letter expressing the sector’s disappointment
The European steel industry’s survival is at further, serious risk because the Commission’s steel safeguard review proposal does not consider the sharp collapse in demand following the COVID pandemic. The tariff-free quota should reflect EU steel demand. The European steel sector is deeply disappointed that the Commission and many EU governments have not yet decided to consider this.
Steel demand has fallen by 50% since the start of the COVID-19 pandemic in March. Our industry has had to cut production sharply to adapt to these changed circumstances, with 40% of the EU steel workforce laid-off or having to work part-time. Meanwhile, countries such as China, India, Indonesia and Russia have not rested: they continued, or are restoring, steel production and stockpiling. The imminent risk of cheap steel offers flooding the market would hamper our recovery and the survival of one of Europe’s strategic industries – one that sustains 2.6 million direct and indirect jobs in the EU. The current proposal could massively boost the market share of imports while a huge part of EU production capacity sits idle.
The safeguard review process does allow ‘changed circumstances’ to be addressed, such as those caused by a severely negative impact on the economy and markets as a result of the pandemic.
We therefore urge the Commission and Member States to improve the proposal and turn it into a crisis-oriented review, effectively safeguarding the European steel industry. We request a tariff-free quota size that reflects actual market conditions. They should make use of the ability to adapt the measures because of ‘changed circumstances’. A lack of interpretation and political will only play into the hands of steel exporters to the EU that are heavily supported by their governments.
The import quotas should be reduced considerably, and the transfer of unused quotas to subsequent quarters and the access to the residual quotas for countries with their own quotas prevented.
Europe needs a sustainable and resilient steel industry if it wants to deliver on the objectives of the European Green Deal. The Green Deal – born before the crisis struck – is predicated on showing that Europe can lead the way to carbon neutrality by 2050. European steel production is far cleaner than that of the countries threatening to flood the EU market with their excess material. European steelmakers are leading the way in setting ambitious targets to produce steel in a carbon neutral way. If the European steel sector is wiped out by imports, we will simply not be there to lead emissions reductions from the global steel industry.
A Europe that becomes ‘Green’ because it accepts that other regions undercut us and pollute at will shall not be able to hold its head high. EU trade policy needs to be allowed to shift into crisis mode when European strategic industrial interests are existentially threatened. If climate change leadership is the strategic advantage the EU claims it is, then it must use the tools available to it to reinforce the strategic industries that will make the strategic green transition fair, just and possible.
At EU level there are, or have been, slow and feeble trade defence decisions, conflicting legislative objectives, obstructed pro-competitive consolidations of globally-sized producers, and onerous emissions and environmental control targets that are set without a regulatory framework that would allow our industry to remain globally competitive while achieving these objectives.
This crisis requires a serious review that considers the world as it is today. The steel safeguard being reviewed was created for the pre-COVID era. Now it needs to be adapted to the post-COVID era.
Geert Van Poelvoorde
CEO ArcelorMittal Europe – Flat Products
President of EUROFER
CEO Arvedi & Vice-President Federacciai
Chairman of the Executive Board of thyssenkrupp Steel Europe AG
Francesc Rubiralta Rubio
Chairman & CEO CELSA Group
Timoteo Di Maulo
CEO Aperam France
CEO SSAB Europe
James E Bruno
President US Steel Kosice
CEO Trinecke Zelezarny
Bernardo Velazquez Herreros
President UNESID – CEO Acerinox
CEO Marienhütte Stahl & Walzwerk
Chairman of Management Board CMC Poland
CEO & Chairman of the Board Vitkovice Steel
Chairman of the BoD OFZ, j.s.c. Istebne
President A3M, Alliance des Minerais, Minéraux et Métaux
Directeur Général Groupement de la Sidérurgie
CEO Tata Steel Europe Ltd
Heinz Jörg Fuhrmann
CEO Salzgitter AG
CEO Riva Stahl GmbH – RIVA Group
CEO voestalpine Steel Division
President & CEO Outokumpu Oy
José Enrique Freire Arteta
President MEGASA Group
President and interim CEO, LIBERTY Steel Group Europe
Hans Jürgen Kerkhoff
President Wirtschaftsvereinigung Stahl
Nicos I. Georgakellos
President Hellenic Steelmakers Union
Chairman of the Board Bulgarian Association of the Metallurgical Industry
President of the Board Polish Steel Association
Managing Director Metallinjalostajat
Executive Director Ocelarska Unie Steel Union
Managing Director Jernkontoret
Managing Director Fachverband Bergwerke & Stahl
President Metallurgy, Mining and Geology Association of Slovakia
Director General EUROFER
Source: Eurofer Photo: Fotolia