The timing of two major mergers in the European flat steel market was “not helpful” to the European Commission’s attempts to defend the industry, a policy officer for steel at the EC said Wednesday.
Speaking at the EUROMETAL International Steel Trade Day in Ghent, Aleksandra Kozlowska said the combination of ArcelorMittal’s takeover of Ilva and ThyssenKrupp’s joint venture with Tata Steel will “cause us a couple of sleepless nights.”
A number of participants at the event expressed nervousness that domestic consolidation combined with broadening anti-dumping duties will make it harder for independent distributors to compete with mill-tied stockholders and service centers.
Kozlowska said the EC had sent out questionnaires to affected parties in the wake of the Ilva takeover announcement and a deadline for the first phase of the EC’s investigation will be October 26. After this the EC will either clear the sale or make a statement of any objections, which the actors involved in the process would have to address.
A similar process will occur for the ThyssenKrupp and Tata Steel joint venture, which is expected to attract debate on the prominence of the potential combined downstream operation.
A service center buyer said he is concerned not only that a more consolidated industry will reduce competition on prices, but also stifle research and development. “Now I can go to both Tata and ThyssenKrupp and talk about developing a certain grade, now there will just be one and I will have to pay whatever they say.”
Peter Brennan, S&P Global
