German crude steel production lags significantly on-year
Crude steel output at German mills this year has shown “an altogether massive negative trend”, says the country’s steel federation, WV Stahl.
From January through September, output was only marginally higher than 25 million tonnes, whereas it reached 28mt in the year-earlier period.
Production on the oxygen converter route saw a steeper decline than on the EAF route, at 13% on-year to 17.4mt. At EAF mills, it sank by 5% to 8mt. However, the less pronounced drop is mainly attributable to low EAF output figures in 2024, Kallanish hears from WV Stahl.
The difference appears to be flattening out somewhat, after September registered 3mt of overall crude steel output, down 1% on-year. The oxygen route actually gained 4% y-o-y to 2mt, while the EAF route slumped 10% to 891,000t.
Christian Koehl Germany
EU policy risks ending European blast furnaces: Gozzi
The European Union’s current climate policies risk accelerating the collapse of blast furnace-based steelmaking in the bloc, which is being hit by the combination of the Carbon Border Adjustment Mechanism (CBAM) and phase-out of free CO2 allowances, says Italian steelmakers’ association Federacciai president Antonio Gozzi.
Speaking at the association’s annual assembly on Monday monitored by Kallanish, Gozzi said that with CBAM set to take effect on 1 January 2026, the progressive reduction of free emission quotas for hard-to-abate sectors will drive up the price of CO2 allowances. Some forecasts estimate that carbon prices could ultimately reach $200/tonne, adding significant costs for energy-intensive industries and further burdening households and businesses.
“Without free CO2 allowances, all European blast furnaces are destined to close due to the unsustainable additional production costs,” Gozzi warned. This would be “an absurd outcome” given the strategic importance of blast furnace technology for producing certain high-grade steels, he added. He argued that carbon capture technologies, if adequately supported by EU incentives, could allow these plants to survive.
Gozzi also criticised “ill-conceived hydrogen steel projects” that are failing across Europe. The shift towards electric arc furnace production, which relies on ferrous scrap, will limit Europe’s ability to produce deep-drawing steel required for car body automotive production, he noted. “After 2035, the remaining European car industry will have to import steel sheet for car bodies from competitors like China, Japan, and South Korea,” he said.
He warned the next phase of the EU Emissions Trading System (ETS) could become “the final nail in the coffin” for European manufacturing if reforms are not made. “For this reason, it is necessary to urgently review the entire ETS framework, also considering its impact on energy prices … An emergency measure is needed to immediately halt the extension of the ETS/ETS2 to new sectors such as SMEs and residential buildings and to prevent the elimination of free allowances for hard-to-abate industries. We call on the Italian government to take prompt action … before it is too late,” Gozzi demanded.
Finally, he called for technological neutrality in EU climate policy. “Decarbonisation should not rely on a single technology such as electrification,” he stressed, adding that biofuels, synthetic fuels, carbon capture, and nuclear energy must all be part of a balanced approach.
Natalia Capra France
Federacciai president eyes global trade rules redefinition
To protect Europe’s industry from unfair trade and global overcapacity, a redefinition of global trade rules is essential that ensures fairness rather than “wild” competition, president of Italian steelmakers’ association Federacciai Antonio Gozzi said at the association’s annual public assembly on Monday monitored by Kallanish.
He questioned whether WTO norms, respected mainly by Europeans, remain adequate. Without robust defensive trade policies, Europe’s industrial base could face collapse within years, Gozzi warned. He welcomed the initiative by EU Executive Vice President Stéphane Séjourné and Commissioner Maroš Šefčovič to review the bloc’s steel safeguard measures, expressing hope that the new rules will be swiftly adopted.
Additional support, he said, should come from the “Buy Europe” policy, requiring public procurement to source at least 60% of steel from European producers, and the Carbon Border Adjustment Mechanism (CBAM), which aims to shield EU steel from unfair competition.
Escalating US protectionism is reshaping steel trade flows to Europe’s detriment. Gozzi noted that the direct effects of US tariffs on Italian steel have long been absorbed. The Trump administration’s 25% duties on European steel, imposed since 2018, have already reduced Italian exports to the US to less than 1% of national output. With the new 50% tariffs, those exports may disappear entirely.
However, Gozzi’s main concern lies with indirect effects, caused by trade diversion. As high tariffs block exports to the US, non-US producers, particularly China, are expected to redirect their excess output to Europe. He warned that China’s massive overcapacity, especially in steel, poses a growing systemic risk.
Natalia Capra France
‘Ideological’ Green Deal undermines EU competitiveness: Federacciai
The European Green Deal represents an “ideological and extremist” approach that has undermined the competitiveness of European businesses, to the detriment of economic, social, and environmental development, says Italian steelmakers’ association Federacciai president Antonio Gozzi. Rising global emissions continue to outweigh those reduced in Europe.
Even if all European industries were to suddenly stop production, global emissions would still continue to rise, as India, China, and the United States are not required to undertake costly decarbonisation efforts, he said at Monday’s association annual public assembly monitored by Kallanish.
Regulation imposed by the EU has been a major factor in the loss of competitiveness and market share of many sectors of European industry. The Green Deal has effectively supported China’s industries for solar panels, inverters, turbines and wind blades, energy storage systems and batteries, and electric vehicles, having now become the undisputed global leader in the production of these technologies. This has led to Europe becoming strategically dependent, Gozzi warns.
“I recall the simple yet powerful words spoken by Prime Minister Giorgia Meloni at last year’s Confindustria Assembly in Rome: if decarbonisation turns into industrial desertification, it is a disaster, because there is nothing green in a desert,” Gozzi said.
He highlighted that the carbon intensity of Italian steelmaking is 40% lower than the EU average and 61% lower than that of China, confirming Italy’s position as a European leader in sustainable steel production.
Gozzi reiterated the steel industry represents true Italian excellence and highlighted the distinction between the crisis of the former Ilva and that of the Italian steel sector as a whole. The association supports the government’s efforts to save Ilva but stresses that it is first necessary to create the enabling conditions that could convince one or more private steelmakers to take on the risk of Taranto. No Italian steelmaker has expressed interest in Taranto, as the conditions for investment are not yet in place and the local authorities are against saving the company.
As it is unlikely that Taranto will increase its production to 6 million tonnes/year, a social plan for workforce redundancies resulting from the downsizing of production levels is key to the steelworks’ survival. This should not be borne by private investors willing to invest, Gozzi added.
He also expressed doubt about the current state intervention, using substantial public resources, to facilitate a foreign investment in Piombino. This project, which also appears economically unsustainable due to its excessive level of debt, does not support the recovery of Taranto, as it competes directly with it and is entirely based on scrap, given that no investment in a direct reduced iron plant is planned.
Additional demand for 3m t/y of scrap in an already “tight” market risks becoming a major destabilising factor for the entire electric steel industry in Italy, Gozzi concluded.
Natalia Capra France