Antonio Marcegaglia: Europe risks trade isolation, prices nearing rebound
Flat steel prices are expected to reach their lowest point this summer before starting to recover in the fourth quarter. This will be driven by the European Commission’s safeguard measures review, existing quota systems, and the incoming Carbon Border Adjustment Mechanism (CBAM), according to Antonio Marcegaglia.
“Demand is structurally declining in Europe – by at least 15 million tonnes over the past six to eight years – reaching just 130 million tonnes last year,” Marcegaglia told Kallanish during EUROMETAL’s 75th Anniversary conference held in Luxembourg this week. This decline, he added, is occurring amid a broader global economic slowdown. “We must not underestimate the need to support European demand before talking about decarbonisation and trade”.
While producers have highlighted overcapacity and called for stronger border protections, Marcegaglia questions the actual extent of excess capacity in the global market. “Talking with my Chinese commercial partners I do see and I do expect a cut of 300 million tonnes capacity in the next five to eight years or even sooner, and [their] export-oriented model is no longer working,” he observed.
Marcegaglia acknowledges the need for Europe to shield its industry from unfair competition but highlights that protectionism alone cannot be the solution. “We need to protect to a certain extent but I do believe the EU, because of its nature as a re-exporting economy, needs to remain in the global supply chain actively working and not isolated,” he noted.
Referring to the ongoing global trade tensions created by US President Donald Trump, Marcegaglia conceded that chaos can work as a negotiation tool, but even the United States cannot afford to turn its back on global trade.
Europe has a structural competitive gap with Asian countries, created by high energy costs, lack of raw materials, the highest labour costs linked with being a developed economy and more developed social welfare. This gap will remain.
However, the European supply chain has a growingly sophisticated market that needs to be developed. It possess the best technologies for steel, a culture of innovation, scrap availability that is not yet fully utilised, a resilient, capillary and well-organised distribution supply chain, and social and political stability, Marcegaglia continued. If well managed, the green transition could become an opportunity.
Europe also boasts a proximity to markets in need of steel in the near future, such as the Middle East and Africa.
Marcegaglia is implementing a partial upstream integration with the acquisition of a stainless steel mill in Sheffield, UK, and the new Fos-sur-Mer hot strip mill project in the south of France. The company aims in future to reach zero debt, becoming less reliant on financial institutions, and post €10 billion ($11bn) in turnover and €1 billion in Ebitda. In 2024, the company registered €6.8 billion in revenue and €430 million in Ebitda.
Natalia Capra France
EU alters ‘overly ideological’ decarbonisation course
The EU has recognised its initial decarbonisation policy was “overly ideological” and must change course to ensure its industrial base endures. However, it should not succumb to excessive protectionism. This was the conclusion of a dialogue between Antonio Marcegaglia and Franco Bernabè at Made in Steel in Milan on Wednesday.
Bernabè, who is president of the University of Trento and former chairman of Acciaierie d’Italia, said making predictions is becoming difficult in an increasingly unstable world. Donald Trump’s tariffs mean uncertain and often harmful consequences for the global economy.
“Yet, this instability could also serve as an opportunity for Europe, which possesses untapped resources and expertise, including an industrial heritage that can be revitalised with a renewed strategic vision,” Bernabè noted at the event organised by Siderweb.
“Europe has recognised the need to change course. Its initial approach to ecological transition was overly ideological and failed to grasp the complexity of the transformation required. Nevertheless, a major obstacle remains: bureaucracy. An ever-expanding web of laws and regulations continues to stifle entrepreneurial activity,” he added during the event monitored by Kallanish.
Marcegaglia meanwhile said European steel sector challenges stem from “a bureaucratic, overly ideological approach to decarbonisation – an essential but complex goal. Without a strategic course correction, Europe faces the very real risk of a significant decline in its production capacity.”
He called for “greater regulatory clarity and more efficient governance capable of delivering effective industrial policy. Europe must embrace a strategic vision without succumbing to the temptation of excessive protectionism – otherwise, we will seriously undermine the competitiveness of our industry.”
Adam Smith Poland
Joint venture between Marcegaglia Steel and Manni Group is now operational
Marcegaglia Steel and Manni Group have officially finalized their joint venture, creating a new entity focused on insulated and sectional door panels.
Following European Commission approval, the venture is now the second-largest panel producer in Europe, with operations in over 70 countries, projected revenue of €500 million, and nearly 700 employees.
The agreement involves Marcegaglia contributing Italian and Polish production facilities to Isopan Spa, with both companies holding a 50% stake. Operating under the ISOPAN and MARCEGAGLIA RWD brands, the joint venture includes 16 production lines across Italy, Spain, Romania, Poland, and Mexico.
The partnership aims to drive innovation, sustainability, and decarbonization in construction, leveraging their combined expertise and global reach. Leaders from both companies emphasized the collaboration’s potential to deliver advanced, efficient, and sustainable building solutions, cementing their roles as key players in the international construction market.
Source: marcegaglia.com
siderweb FORUM: prices at their lowest, cautious optimism for 2025
Steel prices are expected to have bottomed out and a turning point now seems close. Participants at the round table ‘Steel in Italy and the World’ held during the siderweb FORUM appeared to agree on this.
‘The steel market is cyclical by nature,’ said Yuryi Rizhenkov, CEO of the Ukrainian Metinvest Group. The current bearish trend in the sector is the longest in the last 20 years. This alone leads me to be cautiously optimistic for 2025. Of course there are many uncertainty factors, such as the war that unfortunately continues in Ukraine and the crisis in the Middle East. However, we also see that governments, such as the one in China just now, are taking steps to stimulate the economy,’ he says.
“We only hope that the effects of the latest stimulus packages from China will have a lasting effect,” remarked Fernando Espada, president of EUROMETAL, noting how, on the European side, we are instead looking closely at the ECB’s upcoming moves.
‘I believe that prices are near the bottom, because flat steel producers around the world are suffering right now,’ said Antonio Marcegaglia, president and CEO of Marcegaglia Steel. ‘Moreover, I do not see any possibility of significant reductions in raw material and labour costs given the inflation levels. We need higher prices both to cover these costs and to address investments in decarbonisation’.
Despite a weak economy and geopolitical tensions, Alessandro Brussi, chairman and CFO of Danieli, described demand for steel plants worldwide as good. “Demand for steel,” he said, “is still growing in some areas and part of this growth is due to the availability of raw materials and factors such as gas, as in North Africa. In some areas, such as Europe, demand is driven by decarbonisation and the efficient use of resources such as scrap, energy and electrodes; in others, such as India, it is driven by the need to increase tonnes produced. ”
We have an interesting pipeline of orders,’ concluded Bruschi. “The main obstacle is the need for capital, for funding, for contributions from different governments to drive technological change within the sector.”
Asked what are the main challenges facing the steel market, Marcegaglia replied that ‘structurally high costs are undermining the competitiveness of European players’ and that in order not to succumb it is necessary ‘to focus on innovation in materials, processes, performance; to remain very lean in terms of organisation, flexible in adapting production levels to fluctuations in demand, and to move more towards services and value creation’.
At the same time, both Marcegaglia and Espada stated that although protection from unfair and aggressive imports is desirable, raising walls too high risks becoming ‘a boomerang’. According to Espada, the latest EU trade measures ‘are only protecting one part of the supply chain. On the one hand it is difficult to import certain products, but on the other hand we allow the import of products with higher added value. I think the Commission should focus on initiatives to increase steel consumption. Doing so would defend the entire supply chain’.
The CBAM, the Border Carbon Adjustment Mechanism, is according to Marcegaglia ‘a good objective, but with wrong and badly applied instruments, it risks being not only ineffective but even dangerous’. The chairman and CEO of Marcegaglia Steel added that so far, in its transitional phase, the CBAM has been more “a burden from an administrative point of view”, but has not brought about much change; however, all steel players are preparing to move towards more sustainable resources and making investments to supply green steel. Marcegaglia said he hoped that the CBAM would undergo changes, but was not very optimistic about it.
Despite the EU safeguard, duties and ongoing anti-dumping investigations,Italy remains the largest importer of flat steel in Europe. This was one of the main reasons for Metinvest to evaluate Italy for its investment project in partnership with Danieli. A project that was initially intended to be for the rolling of semi-finished products from Ukraine but which, with the loss of Azovstal due to the war, became that of a full-fledged steel mill. ‘Building a domestic production of this type of product would make the Italian economy more resilient and stable,’ he said. Moreover, the project ‘aims to revitalise the area’. ‘I believe we will finalise the Programme Agreement within the next two months,’ he remarked. The Metinvest-Danieli steel plant in Piombino will use raw materials largely from Ukraine, as well as both European and imported scrap. In this regard, Ryzhenkov emphasised that ‘at European level, there will be a big increase in the availability of scrap in the coming years. In fact, the export of this raw material is expected to grow in the next five years. So there should not be a supply problem’.
On the subject of investments, Marcegaglia said that his group’s investments are mainly driven by cost efficiency and innovation and the need for value chain integration in production. These were the drivers behind the acquisitions of Outokumpu’s stainless steel long products division and Ascometal’s Fos-sur-Mer site.
Stefano Gennari
