Assofermet, the association representing Italian distributors of scrap, raw materials, and steel products has welcomed the European Union’s Action Plan on Steel and Metals, viewing it as an important signal in support of strategic industries. However, in a statement released this week, the association criticized the document for its lack of concreteness and detail, deeming it insufficient to resolve the deep crisis affecting the European steel industry, the primary cause of which is identified as the drastic decline in domestic steel demand.
According to Assofermet, the current plan focuses excessively on production, while entirely neglecting the downstream supply chain – comprising trade, distribution, processing, and end-use of steel – which constitutes the most extensive and strategic part of the industry. The entire European manufacturing sector, which heavily relies on steel, is now severely weakened by offshoring to third countries and by foreign competition, both in terms of price and quality, Assofermet said.
The transition of the sector toward decarbonization is recognized as necessary, but it must be accompanied by effective and immediate measures, the association argues. Assofermet highlights that companies in the supply chain, often SMEs (small and medium-sized enterprises), played a crucial role in ensuring steel supply during the post-Covid crisis, compensating for domestic shortages through imports from non-EU countries.
Assofermet therefore proposes a series of economic and fiscal measures to stimulate domestic steel demand and strengthen the entire industrial value chain, with the goal of preventing further declines in production and employment. These include:
- Tax credits for replacing obsolete machinery and equipment with new ones that have a high steel content.
- Non-repayable grants and low-interest loans for investments in plants and equipment by SMEs.
- Capital, operating, plant and interest subsidies to support the activities of businesses involved in steel usage.
Additionally, Assofermet calls for:
- The introduction of targeted tax incentives and a reduced VAT rate for products with a high content of steel produced in the EU.
- The inclusion of clauses in public procurement tenders that favor the use of EU-origin steel.
- The extension of the Carbon Border Adjustment Mechanism (CBAM) to certain finished products with high steel content.
- Protective trade measures against imports of steel-intensive goods from third countries.
Assofermet also considers it essential to implement a three-year emergency economic plan to revive European manufacturing and structurally stimulate steel consumption, in line with the EU budget resource use guidelines proposed by Mario Draghi.
The association identifies several priority sectors to be relaunched in order to boost demand: automotive, transport, construction, infrastructure, energy, mechanical engineering, home appliances, chemicals, and the food industry.
Finally, Assofermet warns that the current weakness in domestic demand, combined with shrinking distribution margins and excess production capacity, risks triggering a serious slowdown in EU manufacturing, transforming companies into mere importers and sparking a new wave of industrial offshoring.
Hence, the association makes an urgent appeal for coordinated industrial policies capable of reactivating internal demand, strengthening competitiveness, and opening a new phase of economic expansion for the entire European steel supply chain.
