Improving cost competitiveness is an urgent priority for the EU carbon and specialty steel industries, Antonio Marcegaglia said at this week’s SMR International Stainless & Special Steel Conference in Istanbul.
While advances in AI and digitalisation can provide some relief, a structural cost gap compared to Asian producers is likely to persist. Limited protection measures can help level the playing field, yet excessive protectionism risks harming long-term competitiveness.
Specialty and stainless steel demand in Europe are expected to improve in the coming months, supported by CBAM and other protectionist measures, following a year of limited gains, Marcegaglia told Kallanish following the event.
Competitive pressures from Asia, rising energy costs, and tightening raw material access are testing the resilience of European specialty steel producers, particularly in strategic segments. Key priorities for EU institutions include boosting domestic demand, addressing high energy costs, securing strategic raw materials, re-establishing a level playing field without resorting to excessive protectionism, and approaching the Green Deal with a technology-neutral perspective.
At the company level, “each player should find its best strategic positioning option but, defensive shrinking or a passive attitude are risky,” Marcegaglia stated.
The EU should remain an attractive hub for high-value steel production. Expanding markets for European products is crucial, though high production costs restrict opportunities. Rising protectionism, particularly from the US, complicates this picture. Nevertheless, regions such as Africa, the Middle East and North Africa, and the post-war reconstruction of Ukraine offer opportunities for growth.
For mid-size players, a strategy of downsizing or specialising can be valuable, particularly in niche or high-end segments. However, much of the underlying demand remains for commodity products, Marcegaglia argued.
Relocating production, while sometimes considered, is an expensive and complex option, as each country presents its own challenges, and such a strategy is “not really suitable for the specialty steel industry”, he noted.
Diversifying the industrial footprint and enhancing one’s position within the supply chain are equally critical, but this requires strong management and a careful corporate culture to ensure cohesion across different sites. When executed effectively, diversification can also mitigate risks posed by protectionist measures, he added.
Ultimately, consolidation remains a logical avenue when the industry requires restructuring.
On a more positive note, Marcegaglia concluded that despite rising costs, geopolitical tensions, protectionist measures, slowing European domestic demand, overcapacity, and decarbonisation obligations, Europe still retains significant competitive advantages.
“It is a democracy, with a decent welfare, wealth and social equilibrium; [it] is a stable and predictable environment, able to attract talent and financial investments. If governance and unity improve, significant reforms and investments could be implemented … Competency and talent, coupled with AI potential, could close the competitive gaps with other economies,” he concluded.
Natalia Capra France
