The European steel industry will continue to lose capacity next year, especially if Europe does not take strong protective measures in the face of global competition, warns the European steel union Eurofer.
“The situation is very, very worrying”for Axel Eggert, general director of Eurofer, the European steel lobby: “we are faced with several problems that reinforce each other”he explains in an interview with AFP, quoting pell-mell “overcapacity in the global steel industry”THE “energy prices in Europe” et “the fall in demand” on the continent.
As a result, thousands of job cuts in the steel branch of the German Thyssenkrupp and site closures in France at ArcelorMittal.
For weeks, steel manufacturers have been increasing their calls for help to Brussels.
On December 6, Eurofer sent a joint letter with the IndustriAll European Trade Union Confederation to the President of the European Commission Ursula Von der Leyen, requesting an emergency European summit on steel, which has remained unanswered at this stage, according to Mr. Eggert, who nevertheless hopes “an action plan for the European steel industry”.
Otherwise, site closures will “just keep going, if we don’t find quick measures”at-il having you.
While “masses” of steel enter the European market “at a very, very low price, derived from excess capacity” caused by colossal government infrastructure programs outside the EU, in China, but “not only”demand from the European automobile industry, in crisis, is in free fall, recalls Mr. Eggert.
At the same time, energy prices in Europe have been soaring for three years and are now “three to four times” higher than in the United States or China, he laments.
“If Volkswagen closes three production sites, of course, that has a direct impact on steel”underlines Mr. Eggert, taking up information from the German metalworks union IG Metall.
Factories running at 60%
“For the moment, we are only using 60% of our capacity”explains the Director General of Eurofer, who recalls that in 2023, European manufacturers produced 126 million tonnes of steel, compared to 160 million tonnes in 2018.
This reduction is ” huge “, “because we have fairly high fixed costs and we only make profits on the last tonnes of production”he emphasizes. As a result, decarbonization programs “very ambitious” in which European steelmakers are engaged, are at a standstill.
In Dunkirk, in the north of France, ArcelorMittal has decided to delay its carbon-free steel project, despite subsidies from Europe already granted for this purpose.
“Energy is too expensive at the moment to make this transition that others are not making”believes Mr. Eggert, who calls on Europe to fight against imports of steel produced in a less virtuous manner and with the help of customs barriers. He estimates that a ton of green steel costs 300 euros more than a ton of carbon steel.
He also recalls his organization’s demand for” improve “ the “border carbon adjustment mechanism” (MACF or CBAM in English), “not effective” as it stands, before its entry into force in 2026.
Another emergency to be resolved according to the lobbyist, the exit from Europe each year of 19 million tonnes of scrap metal, which would allow the Old Continent to produce recycled steel, to reduce its CO2 emissions (-33 million tonnes, according to Eurofer) and save energy. Gold “more than 50% of countries that produce steel have export restrictions” of this scrap metal.
“In the next three months, we must already have a decision on a few measures and in the next 18 months, we must have a whole range of measures to safeguard the steel industry in Europe” and with it European industry as a whole, “because we really suffer”insisted M. Eggert.
“Every day we lose, we lose people and we lose capabilities”he concludes.
