EUROFER (the European Steel Association) has called for urgent action by EU policy makers to help the sector as it faces down a “flood of steel exports” heading into the UK because of the US fresh steel import tariffs.
With the dust settling on the EU elections, EUROFER is bidding to meet EU policy makers to “urgently to discuss how to end the crisis”.
Global overcapacity is the principle underlying factor of the present crisis, said the association, with the direct cause the flood of exports to the EU. Imports rose 12% to nearly 30 million tonnes in 2018 in the wake of the imposition of the US’ section 232 steel tariffs.
The calls come as British Steel moved into insolvency, putting thousands of jobs at risk (although the government claims more than 80 potential purchasers are in now in the mix). Earlier this month, ArceloorMittal revealed it would reduce steelmaking in its European production facilities.
“There has been a sudden and markedly negative shift in the prospects of the European steel industry in recent months – and the terrible consequences are plain to see,” said Axel Eggert, Director General of EUROFER.
“We have seen announcements of actual or potential plant closures in several EU member states over the past few weeks. The bill of direct jobs immediately at risk exceeds 10,000. Given the EU steel industry’s multiplier effect, the loss of indirect employment in the supply chain could top 100,000.”
High and volatile raw material prices, slowing demand in downstream sectors, sharply higher carbon costs – five times higher than at the beginning of 2018 and borne by EU steel producers but not by imports of steel into the EU – and faltering EU economic performance have also increasingly squeezed the sector in recent months, EUROFER added.
“While imports are an essential element in a competitive economic environment, it is the cause and rate of change that has undone the EU steel market. Imports have more than doubled since 2013. EU steel demand has increased only marginally over the same period. We expect for there to be a decline in demand of 0.4% in 2019.
“This is an acute crisis, reinforced by chronic underlying problems in the global steel market. European steel companies and their employees’ livelihoods are now actively threatened as a result. We need urgent action from policy makers to arrest what otherwise will become a precipitous decline.”
2018’s EU safeguard measured were imposed to guard against import surges, but they haven’t worked as intended, according to EUROFER, with the need for revision urgent.
“EU policy makers can and must act now to revise the system in such a way that surges of imports are stamped out. An emergency meeting between the EU institutions and our sector is crucial to finding swift solutions to end this crisis before things gets worse than they already are,” concluded Eggert.