European Steel Industry - Overcapacity, Weak Demand And High Costs

Steel demand in Europe today remains 30% below pre-crisis levels. At the same time, the European steel industry continues to face the repercussions of low demand and overcapacity.

Nevertheless, the EU taken as a whole remains the second-largest producer of steel in the world, with an output of more than 177 million metric tons of steel a year. This accounts for 11% of global output. Global steel demand is expected to increase to 2.3bn tons by 2025, and the European Commission wants to help the European steel industry to maintain its share of that global growth target.

With over-capacity crippling competitiveness, high costs and far more bureaucracy than in other parts of the world even some in the industry wonder if Europe’s steel industry has a future. The commission says it wants to lay the foundation for future competitiveness by fostering innovation, creating growth and ensuring fair trading in international steel markets. Sounds good but what does it mean? To understand that we need to look at the rest of the comments.

We have quoted Platts here who impartially repeat many of the comments made by the commission, “ In the current situation, a new political strategy is needed. The Commission proposes to support demand for EU-produced steel (at home and abroad), by acting to ensure EU steel producers have fair access to third country markets and are not victims of unfair trade practices”.