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Weakness in EU steel safeguard and poor market conditions threaten sector - EUROFER-- The 20th China (Guangzhou) Int’l Plate metal, Bar, wire, Metal Processing &Setting Equipment Exhibition
5/17/2019 金属板材展-棒材-线材展 -plate metal expo-wire expo |
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The European Steel Association said that surging import volumes, stalling economic growth, high and volatile raw material costs and sharply growing carbon costs are coming together to form a perfect storm that could knock the European steel industry back into a period of severe crisis and that the impact of this combination of factors has already begun to affect European steel producers, with facilities being idled and production being cut back significantly across Europe. Mr Axel Eggert, Director General of EUROFER, said “The European steel sector has had less than two years of stability, a period which arguably ended in mid-2018 with the imposition of the US’ Section 232 measures. 2017 saw 8,000 jobs return to the sector, with another 2,000 following in 2018 – bringing total direct employment in the steel industry back up to 330,000. However, if this mix of negative conditions persists, these gains could be reversed”.
Steel markets have slowed abruptly, both in the EU and worldwide. Growth in steel demand was 3.3% in 2018 and EUROFER forecasts suggest there will be a decline of 0.4% in 2019. Mr Eggert said “This stalling demand coincides with import volumes rising at an ever faster rate. These grew by 12% YoY in 2018, 2017 was already a record, and 2019 might see volumes increase even further. This import growth underlines the absurdity of a safeguard which includes programmed periodic ‘relaxations’ of 5%: in February and July 2019, and again in July 2020 – even though demand is expected to be flat. This is an overgenerous gift to steel exporters to the EU”.
Meanwhile, the carbon price has now reached EUR 25 per tonne of CO2, which is considerable given the relative size of the steel sector’s tight margins. Pared with supply volatility for iron ore in the wake of the Vale/Brumadinho dam disaster in Brazil, alongside high and volatile scrap and coking coal prices, the European steel industry is struggling on several fronts at once. Mr Eggert said “Any one of these factors would cause difficulties for the sector. In combination they are a perfect storm of negative dynamics entirely beyond the control of the steel industry itself.”
Following the financial and economic crisis European steel struggled to swing back onto an even keel, with depressed demand growth and aggressive targeting by exporters to the EU in a global market awash with excess production capacity. He said “We have now had as little as 18 months to rebuild – and have achieved just as the economic cycle seems to have reached the tail end. For the European steel industry not to be swept away we need policy makers to handle the primary threat: the surge of imports that has consumed virtually the entirety of the growth in EU steel demand for the better part of a decade”.
EUROFER has written to EU policy makers making this point, in particular relating to making the EU steel safeguard more robust and effective, as well as continuing work on WTO reform and on international cooperation to remove the causes of subsidised global overcapacity. He concluded “Despite being well-intentioned, the current steel safeguard framework has not prevented surging imports. EU producer margins are on the floor, which undermines their ability to invest in skills, technology and low-carbon development. The alarm bells are already ringing and action is required today to prevent this flood washing the sector away.” 金属板材展-线材展-金属加工展-2019第二十届广州国际金属板材、棒材、线材及金属加工设备展—全球三大金属展之一巨浪展览 -- The 20th China (Guangzhou) Int’l Plate metal, Bar, wire, Metal Processing &Setting Equipment Exhibition Plate metal exhibition, Plate metal expo,2019 Plate metal exhibition,2019 Plate metal expo, Bar exhibition, Bar expo,2019 Bar exhibition,2019 Bar expo, China Bar exhibition, China Bar expo, wire exhibition, wire expo,2019 wire exhibition,2019 wire expo, Metal Processing exhibition, Metal Processing expo,2019 Metal Processing exhibition,2019 Metal Processing expo, China Metal Processing exhibition, China Metal Processing expo. |
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