German steel industry polarized by EU safeguard measures

Monday, 18 May 2020 16:05:56 (GMT+3)   |   Istanbul
       

According to the German steel federation Wirtschaftsvereinigung Stahl (WV Stahl), the German steel industry has been hit hard by a dramatic drop in demand as a result of the industrial shutdown in the context of the coronavirus pandemic. Meanwhile, the overcapacity from other countries is increasingly threatening to penetrate the European market, which poses an existential challenge for the industry. “It is imperative to prevent the market distortions in steel in international trade from further intensifying in the corona crisis. The EU Commission must act now so that Europe as a steel location and the associated value chains do not suffer permanent damage,” said Hans Jürgen Kerkhoff, president of WV Stahl.

In other steel-producing countries such as China or Russia, huge stocks of steel were built up because the manufacturers did not adapt their production to the changed demand situation, but rather expanded it. Accordingly, WV Stahl and the main German metalworkers’ union IG Metall have called for extensive adjustments to be made to the EU safeguards.

On the other hand, steel users are defending the opposite view with the Sheet Metal Forming Industry Association (IBU) and the Cold Rolling Mills Association (FVK) objecting to the tightening of the safeguard measures in the EU, explaining that "a further reduction in the import quotas for steel is incomprehensible."

Stressing that the current discussion regards the reduction of the steel quota volume by 75 percent, both associations warned that this tightened protective measure would unilaterally privilege the steel industry, but at the same time severely weaken steel processing companies. "The competitiveness of the steel manufacturers must not be at the expense of the processors, who place many more jobs," emphasized IBU and FVK.


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