Marcegaglia opposes safeguards on Indonesian stainless HRC imports

Marcegaglia group chairman Antonio Marcegaglia has sent a letter to the European Parliament and the European Commission to explain his opposition to the rumoured possibility of including Indonesian stainless steel in EU safeguard measures. This has been addressed directly to parliament president Antonio Tajani and EC president Jean-Claude Juncker,Kallanish notes.

In the letter, the executive explains that Italian-headquartered Marcegaglia sources 40% of its stainless HRC from Europe while the rest comes from third country sources, including Indonesia. He adds that demand for stainless steel coils in Europe projected to grow by 3-5% in the coming year. Limiting the possibility to import considerable volumes on a timely basis therefore would put the viability of the company’s business at risk, without benefitting EU producers.

According to Marcegaglia, after the restructuring project put in place by Outokumpu in Germany (following the merger with Inoxum), European producers do not have significant volumes of HRC to sell to re-rollers like Marcegaglia. The executive explains that his company buys only from Acciai Speciali Terni, the sole European stainless mill with spare capacity of HRC to sell. Other hot rolled producers use their production to feed their own finishing lines, he says.

“In that context, adequate volumes of HRC imports are vital in the processing industry and to Marcegaglia in particular. Marcegaglia in fact represents almost 90% of the total imports of black stainless coils into the EU and 60% of stainless HRC,” Marcegaglia claims. “In that regard, I draw your attention to the fact that Indonesia is selling their hot-rolled coils exclusively in the form of black coils and exclusively to Marcegaglia. Moreover, the increase in Indonesian exports in the first five months of 2019 (+33,000t) is more than offset by the decrease of imports from China (-16,000t) and USA (-24,000t). Furthermore, total imports of hot rolled stainless steel coils decreased by -10% compared with 2018.”

During recent months, steelmakers’ association Eurofer and a number of market sources within the production side, have asked the European Commission to include Indonesia in the safeguard system. This is specifically because of the surge of stainless steel imports from the Asean country. A similar view was shared by Antonio Tajani in a recent visit to Acciai Speciali Terni last month (see Kallanish passim).