In a recent panel discussion conducted by MM Steel club SMM 2020, Eurometal President Fernando Espada stated that the European steel industry struggled even before the COVID-19 pandemic.
A combination of factors—Europe’s antidumping duties on Chinese, Brazilian and Russian hot-rolled steel, the US’s section 232 tariffs on its trading partners, the EU’s steel safeguarding measures, and the industry’s overall economics—had made the European import market challenging.
The aforementioned safeguarding measures have restricted steel consumers from buying raw material externally, which has, in turn, increased raw material prices from mills on the continent and caused final product pricing to surge, putting European manufacturers at a competitive disadvantage.
Espada said it would lead to manufacturers buying semi-finished products from other countries to reduce their costs, which will significantly affect the EU’s steel sector. He compared the US’s section 232 tariffs to the EU’s safeguarding measures, and added that such policies adversely impact long-term pricing.
EUROFER’s Director Allesandro Sciamerelli, who also spoke at the panel, affirmed Espada’s statements and said Europe’s steel-consuming sectors, like construction, mechanical engineering, domestic appliances, and auto, were reeling as far back as 2019, before the pandemic. The automotive sector saw a 5pc annual decline in 2019.
This decrease occurred, Sciamerelli said, because of Brexit and trade tensions between the US and China, the fallout of which was brunted by Europe’s steel industry, and the COVID-19 pandemic exacerbated these problems.
However, he expects the steel industry to get recover by early next year, at least where consumption is concerned. He projected the construction industry to grow by 4pc, the mechanical engineering sector to grow by 6.8pc, the automotive industry grow by 25.3pc, and the domestic appliance industry to grow by 8.9pc.
Still, Sciamerelli is concerned about the effects of Brexit on the EU market, as it is yet to be determined how the UK will trade with the continent. Whatever that determination, it will greatly impact the EU’s steel industry, he added.