News
04/07/25
Eurometal conference focuses on protectionism/autarky
London, 4 July (Argus) — The themes of trade protection and greater
self-sufficiency dominated discussions at Eurometal's 75th anniversary
conference in Luxembourg this week, where sentiment remained distinctly
downbeat. European mills are suffering from high import penetration and
softening demand. Axel Eggert, director-general of European steel association
Eurofer, said 128pc of traditional import flows can enter the market duty-free,
while demand has fallen by 30mn t in recent years, giving imports an outsize
share. In "normal" market environments, imports would decline alongside demand,
rather than increase, Eggert added, suggesting domestic capacity utilisation was
close to 65pc, a level at which it is difficult to turn a profit. Illustrating
the difficulties of the sector, Tata Steel is axing one in three white-collar
jobs and one in five blue-collar jobs, as it looks to find a more sustainable
footing. Tata's Ijmuiden plant is the lowest cost slab plant in western Europe.
Eurometal itself is lobbying for import measures on steel intensive goods, as
demand for product sold by its members has been affected by cheaper imports of
components and finished products from Asia. Eurometal represents steel
distributors and importers. Its president, Alexander Julius, reiterated calls
for evidence from members, and the wider supply chain, of difficulties caused by
downstream imports. On the sidelines of the conference, one automotive supplier
said there was no chance for European businesses to compete with Asia. He cited
Chinese electric vehicles being sold at around $20,000, much cheaper than
western alternatives. China's strong grip over the battery supply chain gives it
an advantage that will be difficult to overcome, he said. The European
Commission understands the plight of the industry and is eager to act, but
executional performance is the big key, speakers and attendees said; bureaucracy
in the EU and its intention to remain WTO-compliant hampers speedy
implementation of policies, delegates said. Anthony de Carvalho, head of the
OECD's steel unit, said policymakers are much more aware of the situation facing
the industry and have real ambition to take tangible actions — one-fifth of
trade measures are being circumvented, according to WTO analysis. Europe will
remain less competitive than other geographies, according to Antonio
Marcegaglia, head of Europe's largest coil importer, Marcegaglia. He supported
the need for stricter safeguards and tariffs, but also said Europe needed to
avoid isolationism, given its high energy costs and likely need to depend on
imports of certain products, such as direct reduced iron. Marcegaglia said
decarbonisation was an "ideological agenda" that had not fully considered the
impact on industry, while also challenging the benefit such policies had on
financial market participants, while leaving the actual industry hamstrung.
Marcegaglia also said there will likely be big cuts in Chinese production, as
the country cannot rely on low-priced exports, given increased trade barriers.
Julian Verden, managing director of London trader Stemcor, remained outspoken in
his support for imported product. In response to Eggert's presentation, he said
the safeguard was "designed to create an ideal market for the producer" and was
much too punitive, especially without real-time quota tracking. Another speaker
told Argus that competitiveness at a local level is defined by the global
market, and that tariffs can only be a temporary reprieve where companies should
work on their own efficiency and competitiveness. By Colin Richardson Send
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