Steelmakers request EU support to face the crisis

The European steel industry is requesting that the European Union implement immediate measures to assist it in addressing the ongoing crisis, which is the most severe since 2009.

In a letter to the European Parliament obtained by Kallanish, a number of steelmakers, including Aperam, Riva, Arvedi, ArcelorMittal, and the producers’ association Eurofer, have expressed concern that the current crisis is the result of global steel overcapacity, high energy prices, and unfair trade, which are exacerbating low domestic steel demand.

The signatories are calling on the EU to enhance Trade Defence Instruments by replacing the current system with more robust tariffs, improve the Carbon Border Adjustment Mechanism (CBAM) to prevent circumvention, reduce energy costs, retain scrap within the union, and establish lead markets to drive the demand for green steel in Europe.

“A Steel Action Plan as part of the Clean Industrial Deal must include both emergency measures and a structural solution to the disastrous impact of global overcapacity and unfair trade on the EU steel market,” the letter explains.

Steel production within the European Union has experienced a decline of 30% since 2008, resulting in a total output of 126 million tonnes in 2023. The processes of restructuring and capacity reduction have resulted in a significant decline in employment, with nearly 100,000 jobs lost over the past 15 years. Capacity utilisation has recently decreased to critically low levels, approximately 60%, which raises concerns about viability. This trend is expected to persist into 2024.

“The Ministerial Meeting of the Global Forum on Steel Excess Capacity (GFSEC) has just confirmed that global steel excess capacity (551 million tonnes in 2023) continues to be a rapidly growing structural problem. According to the OECD, an additional 157 million tonnes of capacity are under construction by 2026, mainly using very carbon intensive conventional steelmaking technology… Further undermining the EU’s competitiveness as well as our resilience and strategic autonomy would be a toxic option.” The steelmakers warn.

They ask the European Council to consider these priorities during the meeting that started yesterday on 17 and 18 October 2024, Kallanish notes.

Natalia Capra France

kallanish.com