The Spanish steelmakers association UNESID has addressed the issues facing the domestic steel industry and possible solutions at a recent general meeting.
Bernardo Velázquez, president of UNESID, emphasized that, despite some signs of recovery in production and consumption, the domestic steel industry is experiencing difficulties this year due to challenging conditions in the international market, including protectionism, rising energy prices, accelerated green transition and growing competition from third countries. Hence, the steel industry is critical to ensuring Europe has autonomy in key sectors such as energy, mobility, infrastructure and defense, Mr. Velázquez stressed, adding that achieving this and protecting competitiveness and sustainability requires a solid industrial policy, predictable energy prices, effective trade measures, and a commitment to the green transition.
According to data shared by the association, in 2024 steel consumption in Spain increased by 6.5 percent year on year to 13.5 million mt, seeing the highest level since 2007. Meanwhile, domestic steel production rose by 3.7 percent year on year to 11.9 million mt during the same year, with exports stabilizing at around 7.7 million mt. Additionally, exports within the European markets increased due to rising tariffs in countries such as the US and Turkey. In particular, exports to the countries outside the EU decreased by eight percent, while exports within the EU advanced by five percent, both on a year-on-year basis. In the first quarter of the current year, domestic steel production grew by 11.2 percent year on year, with steel exports in the given period rising by 4.1 percent, compared to the first quarter of 2024, due to increased demand for flat steel products in northern Europe and a partial recovery in the Italian market. However, the sector’s growth is threatened by several factors, including competition and high energy costs. For instance, the recent termination of the 80 percent discount on electricity fees resulted in steel companies consuming around 10 TWh of energy per year facing an increase in annual costs of over €40 million.. According to Carola Hermoso, director general of UNESID, domestic steel production costs are two to three times higher than those of competitors in countries such as Germany and France. Thus, the industry needs fair fees to maintain activity. Furthermore, the US decision to double steel import tariffs on Europe to 50 percent from 25 percent has directly affected Spain’s exports, causing cancellations of exports and production halts. Ms. Hermoso has also warned that imports will increase this year, a likely result of US trade measures. Consequently, UNESID has urged the implementation of lasting and effective trade measures to avert deindustrialization and passive relocation, saying that the European steel industry is at a critical juncture, and the situation will deteriorate further when the safeguard measures expire in 2026. Even though these measures have proven insufficient, the industry will not be able to withstand the impact without them.
In the meantime, Jordi Hereu, minister of industry, pointed out that the transition to a climate-neutral economy must be fair and that the council of ministers has recently approved a €600 million subsidy for this year to offset the indirect emissions costs of industrial sectors and subsectors. In addition, Ms. Carloso reminded that, despite the Strategic Project for Economic Recovery and Transformation (PERTE) program, the industry requires additional tools to drive transition.