Brussels, 20 November 2019 – Ahead of the Foreign Affairs Council trade configuration on Thursday, the European Steel Association (EUROFER) calls on the Commission to have another go at reviewing the steel safeguard. This must defend the sector against deflected steel sent to Europe given the US’ section 232 tariffs and sustained global production overcapacity.
“Europe is still flooded by steel imports, even as domestic demand stalls. We have seen a contraction of at least 3% this year, even as raw material prices and CO2 costs have boomed. In particular, these CO2 costs are not borne by any other producers around the world”, said Axel Eggert, Director General of EUROFER.
“This year, European steel companies have had to announce production cuts of at least 15 million tonnes; 15,000 jobs have been lost or put at risk. This is in addition to the 20% decline in the steel workforce since 2008”, added Mr Eggert.
The agenda for Thursday’s meeting includes a review of EU-US trade relations, as well as a discussion on the WTO and on trade relations with China. These are key topics for the EU steel sector. The meeting should also include an opportunity for ministers to discuss the EU safeguard. Revisions to the safeguard were brought into place in October after a review, but these changes have proven insufficient in light of the shifting circumstances of the global steel sector.
“Firstly, it is the US’ section 232 tariffs that spurred the massive redirection of steel from their market to ours, fuelled by persistently large global steel capacity. Secondly, WTO reform is becoming ever more urgent as we need international measures to ensure trade is fair, including by being environmentally equitable. We need the EU to act decisively to prevent the disintegration of our sector and save the communities dependent upon it”.
“Both EU and international market conditions have turned more negative since the time of the first review”, warned Mr Eggert. “Trade flow distortions are rising and the situation of the EU steel market has proven to be more negative than the outlook previously suggested. Global steel demand is weakening too, causing a depression in international prices and a rush by exporters to supply other open economies”.
EUROFER requests that the safeguard be realigned to reflect the fact that the quota volumes were set far above traditional EU import levels, and that since then market conditions have considerably deteriorated.
EUROFER also believes that, in the context of the informal discussion on China planned during the Foreign Affairs Council, ministers should reflect on China’s refusal to support the extension of the mandate of the Global Forum on Steel Excess Capacity.
“Global overcapacity is still running at 450 million tonnes or more – and two-thirds of this is to be found in China. Given that overcapacity is the principal reason for global steel market weakness and for the rising numbers of industry job losses across the EU, it is more important than ever that this forum exists and can do its work to support capacity reduction around the world”, concluded Mr Eggert.
CORRECTION: This press release, as originally published, stated that 15 million tonnes of production had been reduced this year. In fact, the reduction this year is 8 million tonnes. The 15 million tonnes refers to production capacity reduced since 2009.
Notes for Editors
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A PDF of this Press Release is available: here
This manifesto sets out the footprint and importance of European steel to the EU economy, and explains why we need to make the industry more innovative, skilled and sustainable while also ensuring there is a robust trade policy that defends the sector against the challenges posed by overcapacity and trade surges. The manifesto can be downloaded: here
The EU put in place a safeguard in the wake of the US’ decision to impose a 25% tariff on all steel product imports into the US. This action, when seen in the context of massive global steel production overcapacity, risked causing massive deflection of steel volumes to the EU market, which an open market. Imports surged in 2018, rising by 12%. This infographic explains how the safeguard works and identifies some of the problems with it. The images are below and a PDF version can be downloaded: here
About the European Steel Association (EUROFER)
EUROFER AISBL is located in Brussels and was founded in 1976. It represents the entirety of steel production in the European Union. EUROFER members are steel companies and national steel federations throughout the EU. The major steel companies and national steel federations in Switzerland and Turkey are associate members.
The European Steel Association is recorded in the EU transparency register: 93038071152-83.
About the European steel industry
The European steel industry is a world leader in innovation and environmental sustainability. It has a turnover of around €170 billion and directly employs 330,000 highly-skilled people, producing on average 160 million tonnes of steel per year. More than 500 steel production sites across 22 EU Member States provide direct and indirect employment to millions more European citizens. Closely integrated with Europe’s manufacturing and construction industries, steel is the backbone for development, growth and employment in Europe.
Steel is the most versatile industrial material in the world. The thousands of different grades and types of steel developed by the industry make the modern world possible. Steel is 100% recyclable and therefore is a fundamental part of the circular economy. As a basic engineering material, steel is also an essential factor in the development and deployment of innovative, CO2-mitigating technologies, improving resource efficiency and fostering sustainable development in Europe.