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European steel industry calls on policymakers to end steel crisis and to save hundreds of thousands of jobs

Steel News - Published on Tue, 28 May 2019

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Against the backdrop of the ongoing EU elections the European Steel Association calls for urgent action by EU policy makers to help the sector as it faces down the flood of steel exports deflected to the EU because of the US’ imposition of steel import tariffs in 2018. EUROFER also calls on EU policy makers to meet with them urgently to discuss how to end the crisis. Mr Axel Eggert, Director General of EUROFER said that “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. 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.”

Global overcapacity is the principle underlying factor of the present crisis but the direct cause is the vast flood of exports targeting the EU market. Imports rose 12% to nearly 30 million tonnes in 2018 in the wake of the imposition of the US’ section 232 steel tariffs. 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.

Mr Eggert said that “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”.

He added that “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.”

In 2018 the EU put in place a safeguard measure designed to guard against import surges. However, it has not worked as intended. To become effective, it needs to be revised, urgently, so that the market is not further distorted. EUROFER is seeking urgent consultations with the EU institutions and member state policy makers to remove the specific weaknesses in the current safeguard.

Mr Eggert said that “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.”

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Posted By : Ratan Singh on Tue, 28 May 2019
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