Andrey Kuzmin/Adobe Stack
The European steel sector is facing an existential threat based on a variety of factors, according to the president of the European Steel Association (EUROFER), who spoke at the group’s annual conference June 26.
The issue of rising imports has been a consistent complaint of the E.U. steel industry. Steel companies in the trading bloc have argued the U.S. Section 232 steel tariffs have diverted steel, ordinarily headed to the U.S., to Europe (among other places).
“As a result of the import duties applied by the United States as of 23 March 2018 under Section 232 the US Trade Expansion Act of 1962, exporting steel to the United States has become less attractive,” the European Commission said in February. “There are already indications that, as a consequence, steel suppliers have diverted some of their exports from the US to the EU.”
Earlier this year, the E.U. imposed steel safeguards in an attempt to mitigate the issue of rising imports; even so, many E.U. steel leaders argue the safeguards have not been effective.
“These challenges have the potential to erase the whole steel industry in Europe. On the other hand, these challenges bring us a great opportunity, if we can embrace change and use it to accelerate innovation,” EUROFER President Geert Van Poelvoorde said. “In 2018, there was a record 12% rise in European imports of finished steel products, in a market that grew only 3.3%. We are grateful that the European Commission recognised the problem and took action. However, the safeguard has failed in its objective for a large part of our industry.”
In addition to rising imports and slowing demand, Van Poelvoorde referenced the E.U.’s role in curbing emissions and regulations aimed at doing so.
“For steelmakers, there are several possible routes to decarbonisation – and various pathways to achieve this are being tested by a range of steel companies,” Van Poelvoorde said. “However, funding for these projects has to come from many different sources: to achieve decarbonisation, Europe’s steel sector cannot go it alone, it needs massive investments and cooperation with other stakeholders.”
Val Poelvoorde added costs associated with emissions compliance in the E.U. represent a “cost restraint that non-EU producers do not face.”