European policymakers must act swiftly to prevent “industrial desertification,” panelists warned at a EUROMETAL roundtable, emphasizing that current protections for primary steel are insufficient and urging the EU to extend safeguards to downstream manufacturers and steel derivatives.
At the “Are we risking the EU industrial desertification?” roundtable, held by the European steel body as part of its event in Milan, Italy, Feb. 26, speakers also called for a shift from a cost-focused debate to strategies that stimulate demand.
Across Central and Southern Europe, industry representatives said the risk was no longer theoretical, with plant closures and a shift from domestic production to import-and-assemble models becoming more frequent. Concerns focused on gradual erosion, adding that once value chains were relocated, they rarely returned.
The EU’s Carbon Border Adjustment Mechanism, originally conceived as an environmental tool to prevent carbon leakage, is now widely viewed in the steel sector as an increasingly complex trade defense instrument. While intended to level the playing field by pricing carbon on imports, its heavy administrative burden and uneven product coverage risked distorting trade flows rather than stabilizing them, speakers said.
Safeguards and CBAM
Panelists noted that both the EU’s safeguard measures and CBAM have mixed effects. While intended to protect the industry, the new safeguard regime that is reducing quotas and CBAM that adds extra costs to the steel imports are inadvertently opening the door to steel derivative imports from outside Europe.
Franco Felisa, a representative of Electromechanics Synergy Network, highlighted the severe challenges facing European electromechanical companies. “Every day, we are losing a significant part of our market,” Felisa said, attributing the problem to a substantial gap in input costs rather than quality. He pointed out that Chinese raw materials are “at least 50%” cheaper than European equivalents, making it impossible for EU companies to compete with state-subsidized imports.
Piotr Sikorski, President of the Polish Union of Steel Distributors, described the deindustrialization trend as “already visible” in Poland and across Europe. “There is no single week when I don’t have a call telling me another client is out of business,” Sikorski said, warning that fragmented, small downstream companies remain largely unrepresented in policy discussions, leaving a critical blind spot.
Demand Stimulation Needed
Tayfun Iseri, Chairman of YISAD, the Turkish flat steel user, trader, and producer association, challenged the notion that the crisis was solely cost-driven. “We have a demand problem. It’s not only a cost problem,” Iseri said, urging policymakers to focus on boosting demand.
Tommaso Sandrini, head of Assofermet Acciai, the Italian distributors and re-rollers association, warned that delays in addressing steel derivatives could result in irreversible losses. “We don’t have time … In two years, a significant part of downstream manufacturing will never come back,” he said. He cautioned that once production relocates outside Europe, it is unlikely to return, risking not only plant closures but also the erosion of business models, with companies shifting to importing and assembling rather than manufacturing.
Platts, part of S&P Global Energy, assessed Feb. 26 domestic hot-rolled coil in Northern Europe at Eur670/mt ($791/mt) ex-works Ruhr and in Southern Europe at Eur665/mt ex-works Italy, both stable day over day. It assessed imported HRC in Northern Europe at Eur515/mt CIF Antwerp and in Southern Europe at Eur505/mt CIF S. Europe, both unchanged.
