Caught between limited supplies from domestic mills and limited imports from abroad, European distributors “are facing huge difficulties”, in the words of Daniel Guinabert, director general of EUROMETAL.
Speaking at the Kallanish Europe Steel Markets virtual conference on Wednesday, Guinabert emphasised the issue is not about profitability, but about customer satisfaction. “We just cannot fulfil the service we want and we promise,” he said. The level of inventories has remained low since late last year, and in terms of days-of-sale is still 10-12 days below the level of normal times, he added.
Regarding the extra cost that could come in the longer run from “green” steel on the market, he remained relaxed. “We are prepared to pay more for green steel; what’s worrying is volatility”, along with price differentials from different sources, green and non-green.
On this topic, Dick Sands, managing director distribution at Stemcor said the carbon border tax will in the long run put the future of blast furnaces into question. He conceded that the European Commission’s comprehensive papers on the subject “were much too complicated for me to understand”.
For one part, it seems to remain unclear if the taxation considers the free licences mills have. As an example, he named US mills Nucor and Cleveland-Cliffs; the one operating mainly on electric-arc furnaces, the other on blast furnaces. If, in theory, they would sell steel to Europe, Nucor would be exposed to the same penalty as Cleveland Cliffs, which does not make sense, Sands observed.
Christian Koehl Germany
