Assofermet Responds to the European Steel and Metals Action Plan: Missing Key Measures for EU’s Steel Sector
The European Commission has recently released its Steel and Metals Action Plan, which is designed to safeguard and enhance the competitiveness of the EU’s steel sector in the coming years. However, Assofermet, the Italian association of steel traders and distributors, has voiced its disappointment with the plan, claiming that it is incomplete and overly focused on production without sufficiently addressing the critical issues affecting the EU steel industry.
While the plan proposes protectionist policies to protect European steel producers from unfair trade practices, such as dumping and overcapacity, Assofermet argues that it fails to stimulate demand for steel within the EU itself. This, according to the association, could have long-term negative consequences for the sector's sustainability and the EU’s decarbonization goals.
Concerns Over Declining Steel Production in Europe
According to Assofermet, the EU steel sector has already seen a significant decline in domestic production, with 10% of its output lost over the past decade due to global overcapacity. Despite various protectionist policies, the EU steel industry has struggled to maintain its position in the global market.
The association points out that while the Action Plan outlines several measures to protect and boost production, it does not sufficiently address the underlying demand problems in the EU steel market. As steel production continues to fall, Assofermet warns that this will likely undermine the EU’s progress in achieving decarbonization targets, which are heavily dependent on a strong and competitive steel sector.
The steel market in the EU faces numerous challenges, including rising energy costs, international trade barriers, and the increasing global overcapacity of steel production. The action plan, according to Assofermet, does not provide robust solutions to revive demand in the domestic market or to stimulate EU steel production, both of which are necessary for the long-term health of the industry.
The Impact of US Protectionist Policies and Trade Tensions
One of the key points raised by Assofermet is the growing impact of the US’s protectionist policies, particularly those imposed under the Trump administration through tariffs on steel and aluminum imports. These policies have already caused significant trade tensions and are now exacerbating the problems faced by the EU steel industry. The association argues that the EU steel sector will continue to face difficulties in exporting steel and steel-based products to the US, while at the same time facing increased competition from low-cost imports in the domestic market.
The tariff war between the EU and the US could have long-lasting repercussions for the European steel industry, as steel producers struggle to find new markets and compete with more subsidized foreign steel products. The Action Plan’s response to these trade challenges, according to Assofermet, is to tighten the EU’s trade defense measures, which could lead to even more protectionist actions and possibly retaliatory tariffs. This, in turn, is expected to have a **negative impact on the EU’s GDP, as the steel and aluminum sectors are critical components of the European manufacturing supply chain.
The Need for Energy Cost Reduction
One of the main issues impacting steelmakers in the EU is the high cost of energy. The steel industry is energy-intensive, and rising energy costs are increasingly becoming a major burden on production, making it more difficult for EU producers to remain competitive with steelmakers in countries like China and India, where energy prices are lower.
Assofermet has emphasized that reducing energy costs should be a priority for the European Commission, as it is critical for ensuring the competitiveness of the EU steel sector. The association hopes that the Action Plan will be revised to include concrete measures aimed at reducing energy costs and improving the cost-effectiveness of steel production in Europe. Without these changes, EU steel producers may struggle to compete in the global market, and EU steel production could continue to decline.
The Call for a Revised Plan with Sharper Measures
While Assofermet acknowledges the importance of the Steel and Metals Action Plan in addressing the current challenges facing the EU steel sector, it has expressed frustration that the plan does not go far enough to address the most pressing needs of the industry. Specifically, Assofermet has called for a revision of the plan to include more targeted and sharper measures aimed at reviving domestic demand for steel, reducing energy costs, and fostering a more balanced approach between production and demand stimulation.
The association believes that the EU must take decisive steps to support the steel sector and ensure that it remains competitive on a global scale, particularly in the face of growing international trade challenges and rising energy costs. Assofermet is hopeful that the European Commission will revise the Action Plan with stronger measures that will support both the supply side (i.e., production) and the demand side (i.e., consumption) of the EU steel market.
Key Takeaways:
• Assofermet, the Italian association of steel traders, has expressed disappointment with the European Steel and Metals Action Plan, highlighting its focus on production rather than demand stimulation.
• EU steel production has declined by 10% over the last decade due to global overcapacity and other challenges.
• Assofermet calls for measures to revive domestic steel demand and reduce energy costs, both of which are crucial for the sector’s sustainability.
• The US’s protectionist tariffs are exacerbating trade difficulties for the EU steel sector, with potential negative impacts on EU GDP.
• The Action Plan includes trade defense measures and CBAM proposals but lacks a comprehensive strategy for demand stimulation and energy cost reduction.
• Assofermet urges the European Commission to revise the plan with more targeted and effective measures to ensure the EU steel sector's future competitiveness.
