Following the press release issued by the European Engineering Industries Association (Orgalime) in which the organization and its members accused the EU steelmakers of unjust price manipulation, the European Confederation of Iron and Steel Industries (Eurofer) has issued an official statement refusing the Orgalime allegations.
Eurofer has stated that, contrary to Orgalime's claims that steel prices are rising just in the EU, prices for steel products are in fact rising worldwide due to massive cost increases as raw material prices rise. Raw materials now represent 75 percent of steel producers' total costs, up from just 40 percent in 2000, Eurofer said.
Furthermore, Eurofer went on to say that the continuous price increase seen in the steel market is due to the pressure put on supply of raw material due to the growing demand for steel in emerging countries. The increasing costs of raw material force steelmakers worldwide to pass on these cost increases. For instance, iron ore contract prices in 2008 have risen 65 percent year on year and gone up 200 percent compared to 2004; coking coal prices in 2008 have risen by 300 percent; metallurgical coke prices have gone up by 500 percent in 2008; scrap prices have climbed up by 87 percent since December 2007; meanwhile, costs of transportation and energy have climbed to unprecedented levels.
In addition, Eurofer has also refused Orgalime's claim of lack of fairness on the issue of steel imports. Eurofer has stated that there are no trade measures against any mainstream product in Europe. The association has filed three antidumping cases against China, but no final decision on them has been taken yet and no measures have been imposed so far. Therefore, China may continue its exports to the EU. China has chosen not to do so for tactical reasons and because domestic prices and costs in China have made exports less attractive. Even if the EU is to impose antidumping duty on Chinese products, it will not impact Orgalime's members to a large degree.
Moreover, Eurofer said that price rises for steel worldwide are also demand driven, adding that Orgalime's member industries are booming and are highly profitable and that this is why demand for steel is high. As regards the stable high levels of steel production in the EU, according to Eurofer Orgalime is trying to talk prices down in order to increase their own profit margins at expense of the steel industry.