On Tuesday, October 7, the European Commission presented a legislative proposal in Strasbourg to protect the EU’s steel industry from the negative impact of global overcapacity.
In a statement released on October 9, the German recycling associations bvse – Recycling Germany, BDSV, and VDM, in line with their European umbrella organization Recycling Europe (formerly EuRIC), announced that they welcome the new measures, saying they “brought a sigh of relief” among German and European manufacturers.
Sebastian Will, member executive committee of bvse and vice president of Recycling Europe, explained, “Working together towards an enormously important goal is understood as an intrinsic part of our DNA. The introduction of market restrictions without any factual justification, based solely on the interests of a very narrow clientele, would have severely damaged our members' trust in the institutions of the EU.”
However, Guido Lipinski, managing director of BDSV, was keen to point out that reducing import quotas and increasing tariffs not only affects countries that engage in unfair trade practices, but also domestic companies and, more indirectly, European customers. In fact, many European entities survive solely by exporting their products. He said this will further undermine competitiveness, which is already threatened by high administrative, energy and labor costs. “Interestingly,” added Murat Bayram, president of VDM, “this only applies to steel processors and consumers. This is because imports of semi-finished products such as billets and slabs are exempt from all quotas and tariffs.”
The associations conclude the note by pointing out that this approach opens Pandora's box about the question of state support and wondering which other sectors will appeal for state protection. Among the others, they mention the energy sector, which could request subsidies for base-load power plants or grid expansion, aluminum and copper producers who want to keep all scrap in Europe to reduce purchase prices, and steel industry operators who, on the same lines, are calling for scrap export bans despite the new protection package.