Day: 29 January 2021

Dear Mr Dombrovskis,

On June the 18^th we addressed a letter to your predecessor.  In that letter, we reinforced the message that EUROMETAL was, and of course still is, in favour of fair trade, the free competition and open markets.

Since summer, most of the distributors and steel service centres across Europe, most of them covered by national federations, we have seen the market sentiment improving. At least until the moment of writing these letters. These are some good news in these months of pandemic, where most of our members have seen very dark days where our future has been put under huge consideration.

The recovery of the market demand has generated tension in the markets both in terms of tension in the supply chain as in terms of pricing, where free competition works and imbalances between offer and demand find new equilibriums.

In the steel business, however, there were additional measures taken by the Commission due to the Section 232 implemented by the US Department of Commerce. Indeed, the Commission decided to take safeguard measures to protect the European market from trade flows deviated from the US to the EU. This was a preventive action that the steel industry demanded.

As we all know, after three years, these safeguard measures should be revised. From EUROMETAL we would like to suggest you to check two elements when studying about the next steps on this topic:

• pricing evolution of the last 18 months
• stock position not customer cleared at the ports at the end of the quarter

As insiders, we believe that these elements might help you to build a case of how the market is acting, and whether the measures taken are really achieving its target.

Once more, we need the Commission to assist and care about the steel users and steel consuming industries. There will be no market for the steel production if there is not a market of consumers. There are thousands of small and medium size companies that look for free competition to defend their products and know how. We are talking about employment on manufacturing across Europe, which depends very much on all these medium and small size companies. Let’s produce locally, let’s generate value in Europe.

We offer you our contact, once again, to have point of view of a very representative layer in the steel industry as are the distributors and processors. Once again, we would like to reinforce the message, only with a strong sector of steel end users and consumers can we consolidate the industry we need to look with hope to the future.

Daniel Guinabert – EUROMETAL Managing Director

Fernando Espada – EUROMETAL President

Swedish steel producer SSAB has withdrawn from discussions to buy Tata Steel Europe’s IJmuiden facility and downstream assets in the Netherlands, as there are “limited possibilities” to integrate them into its strategic framework and sustainability strategy, the company said today.

“The synergies that we saw in the transaction would not fully justify the costs and investments required for our desired transformation,” said company president and chief executive Martin Linqdvist.

SSAB intends to be a fossil fuel-free company by 2045, and to supply its first fossil fuel-free steel to the market in 2026.

“The transition to fossil-free steel is a top priority for SSAB. We are continuously on the lookout for possibilities to invest and step up the pace of this transition. Completely fossil-free steel will be a premium segment with great growth potential”, Lindqvist added.

By Colin Richardson

SSAB has concluded discussions with Tata Steel over the possible acquisition of the IJmuiden steelworks. After deeper analysis following talks that began last November, SSAB says there were limited possibilities to include the Dutch works into its strategic framework.

“We have carefully evaluated Tata Steel IJmuiden and have concluded that an acquisition would be difficult for technical reasons,” SSAB chief executive Martin Lindqvist says in a note seen by Kallanish. “We cannot be sufficiently certain that we could implement our industrial plan with the preferred technical solutions as quickly as we would wish. We cannot align Tata Steel Ijmuiden with our sustainability strategy in the way desired.”

“The synergies that we saw in the transaction would not fully justify the costs and investments required for our desired transformation. This means that overall, the transaction would not meet our financial expectations,” he adds.

The possible purchase of IJmuiden was driven by SSAB customers’ desire for a strong supplier of a broad range of fossil-free steel, the Swedish steelmaker observes. “Through an expanded range of steel products, which in the long term can be converted to fossil-free products, SSAB can become a more comprehensive supplier of fossil-free steel to existing and new customers in key segments,” it continues. “This has also been about creating synergies between existing operations in the Nordics and in IJmuiden and getting closer to the European market.”

The group’s goal is to be the first in the world, in 2026, to supply fossil-free steel to market and to be a fossil-free company by 2045. “We are continuously on the lookout for possibilities to invest and step up the pace of this transition,” Lindqvist concludes.

Tata Steel is expected to continue looking for an investor into IJmuiden after it commenced in November the separation of the Tata Steel Netherlands and Tata Steel UK businesses. The firm has said it will concentrate investment in its Indian operations going forward. It meanwhile remains in talks with the UK government to secure the long-term future of the Port Talbot steelworks.