Daily Management Review

Russia and China Are Killing the European Steel Industry


Seven countries, including France, Britain and Germany, urged the European Union to take steps to save the iron and steel industry choking from falling prices and cheap imports from China and Russia.

Ministers from the above three countries, together with ministers from Italy, Poland, Belgium and Luxembourg, on Friday sent a letter to the European Commission and head of the European Council of Ministers.

"The European steel industry, which is already severely affected by the economic crisis of 2008, is now faced with the constant use of unfair trade practices in the context of a major international competition, which is enhanced by a surplus on the global level - they wrote in the letter, initiated by French economy minister Emmanuel Macron. - The European Union cannot stand aside when job losses are growing and more and more factories are being closed, which means that there is a serious and imminent risk of collapse of the European metals sector."

The European Union is the second largest steel producer in the world after China. It produces more than 177 million tons a year, accounting for 11% of global output, according to EU data.

Europe has lost 85 thousand jobs in the steel industry since 2008, that is, over 20% of the workforce. According to an industrial institution Eurofer, the prices fell to 10-year minimum due to abundant supply, decreased demand, and the flow of cheap imports, mainly from China.

In addition, the EU has one of the world's highest energy costs and higher environmental taxes.

The ministers of seven countries asked the European Commission to use the whole range of EU policy instruments to fight unfair trade.

EU intends to impose taxes on imports of cold-drawn steel from China and Russia, which was result of a study on the alleged dumping from these two countries, says Reuter.

Ministers called for a separate investigation into the imports of hot-rolled flat steel from China.

"We will not wait until the damage caused by unfair trade practices of our industry becomes irreversible," - they warned in the letter.

EU Trade Commissioner Cecilia Malmström called on China to reduce the excess iron and steel industry. She also said that the European Commission would open three new anti-dumping investigation on steel imports from China.

On Saturday, China said complaints on alleged dumping should be sent to the World Trade Organization (WTO).

Only in the UK alone, about 5 thousand metallurgical industry workers lost their jobs since October, which is equivalent to a quarter of the workforce.

Further reductions are also around the corner. Mostly it relates to Tata Steel, the largest steel company of Great Britain, and Sheffield Forgemasters, one of the oldest metallurgical companies in the country.

source: reuters.com