A German study has underlined the importance of steel for the country’s industrial networks, its economic resilience and the strength of its small and medium-sized enterprises (SMEs). It also unearthed concern over the progress of the low-emission technological transition being carried out by mills.
The study, published earlier this month, was assigned by steel federation WV Stahl to consultancy Oliver Wyman and economic research institute IW Consult. A poll among 192 steel users showed that Germany as a steelmaking location is at a crossroads. Companies are increasingly expressing doubt over whether the technological transition will be successful. Failure, however, would have profound repercussions on investments and jobs for steel-using industries, Kallanish reads in the study.
“A regional steel industry is essential for the competitiveness of subsequent industries – as an incentive for innovation, higher sustainability standards, or in facilitating quality advantages,” says Hanno Kempermann, managing director of IW Consult. “If the steel industry relocates, many of the subsequent industries will reduce their production sites in Germany.”
In figures, the study states that 23% of the production value of the entire German manufacturing industry is generated by steelmakers, their suppliers, and their customers. This equals a value of €1,818 billion ($1,890 billion). SMEs, especially, are major players in the chain. Roughly half of the value generated by SMEs is connected to the “Value Chain Steel Network,” as the authors call it.
Over 60% of companies emphasise that the dense network of the country’s steel value chain provides a platform for targeted research & development activities. Only 14% believe the transition can be carried out as scheduled by 2035. One major hurdle for the transition is high energy prices, said 81% of participants.
Christian Koehl Germany
