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EU steel industry sounds crisis alarm! EUROFER issues open letter

The European Steel Association (EUROFER) has issued an open letter to EU Heads of State and Government, calling for urgent action to address a severe crisis gripping the European Union's steel sector.

EU steel industry sounds crisis alarm! EUROFER issues open letter

The letter states that the European steel industry, a crucial part of many key EU production value chains, is facing its biggest crisis since the 2009 financial and economic downturn. It represents innovation, sought-after product solutions, and high-quality employment in Europe.

EUROFER highlights a 30% decline in European steel production since 2008, falling to 126 million tons in 2023. The letter emphasizes that reduced steel capacity and unfair trade practices are creating a major structural problem for the sector.

The association outlines several urgent measures needed:

  • Strengthening EU trade defense instruments and replacing steel safeguard measures with a more robust tariff regime.
  • Improving the Carbon Border Adjustment Mechanism (CBAM).
  • Reducing energy costs and securing access to raw materials.
  • Creating leading markets in Europe to boost demand for green steel.

"Your Excellencies,

The European steel industry is an indispensable part of many key EU manufacturing value chains and stands for innovation, desired product solutions and high-quality jobs in Europe. We are committed to contribute to the EU’s ambitious decarbonisation and global climate protection objectives, securing a just transition and quality jobs.

However, we are at a crossroad: our industry is in its worst crisis since the financial and economic crisis in 2009. This is driven by the impact of global steel overcapacity and unfair trade, which exacerbates the impact of low steel demand and high energy prices in the EU. Without urgent measures, it will make it difficult in most of the EU member states to preserve a resilient and sustainable steel industry that can invest in our ambitious decarbonisation projects by 2030 and beyond.

Steel production in the EU has been shrinking by 30% since 2008 to 126 million tonnes in 2023. Restructuring and capacity reduction processes have led to a loss of almost 100,000 jobs in the last 15 years. Capacity utilisation has recently dropped to the lowest, unviable levels of around 60%. A trend that continues in 2024.

The Ministerial Meeting of the Global Forum on Steel Excess Capacity (GFSEC) has just confirmed that global steel excess capacity (551 million tonnes in 2023) continues to be a rapidly growing structural problem. According to the OECD, additional 157 million tonnes of capacity are in progress by 2026, mainly using very carbon intensive conventional steelmaking technology.

A Steel Action Plan as part of the Clean Industrial Deal must include both, emergency measures and a structural solution to the disastrous impact of global overcapacity and unfair trade on the EU steel market, putting jobs and the clean transition at risk. Further undermining the EU’s competitiveness as well as our resilience and strategic autonomy would be a toxic option.

In line with the recommendations of the Draghi report, we therefore call upon you – the heads of state and government of the EU Member States – to support and endorse as a matter of urgency:

• Measures to strengthen and ensure assertive enforcement of the EU Trade Defense Instruments to stop unfair trade practices and circumvention, and a structural solution to comprehensively stop the spill-over impact of persisting and worsening global excess capacity. The current steel safeguards must be replaced by a more robust tariffication regime.
• Improvements to the Carbon Border Adjustment Measure (CBAM) to prevent circumvention, resource shuffling and delocalisation of downstream sectors, and to preserve EU steel exports.
• Action throughout the EU to reduce energy costs for energy intensive industries exposed to significant global competition, and to secure access to raw materials while retaining steel scrap within the EU.
• Establishment of lead markets to drive the demand for green steel in Europe.

We call upon the European Council to consider the above in its conclusions on 17/18 October 2024 and EU policy priorities.

Signatures:

Henrik Adam, President of EUROFER, CEO Tata Steel NH

Mario Arvedi Caldonazzo, Vice-President of EUROFER, CEO Arvedi

Geert Van Poelvoorde, Vice-President of EUROFER, CEO ArcelorMittal Europe

Timoteo Di Maulo, Vice-President of EUROFER, CEO Aperam

Lorenzo Riva, Vice-President of EUROFER, CEO Riva Stahl

Hubert Zajicek, Vice-President of EUROFER, CEO voestalpine Steel Division

Gunnar Groebler, Vice-President of EUROFER, CEO Salzgitter AG."

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