UNESID (Association of Spanish Steel Producers) held their annual general assembly in Madrid last Thursday, during which participants looked back at the record year for production in 2006 and also expressed concerns over the effects which rising electricity costs - up 30 percent in two years - would have on the competitiveness of the Spanish industry.
In the concluding speech at UNESID's 39th General Assembly, the association's president Gonzalo Urquijo said that 2006 was a good year for the Spanish steel industry and remarked that producers in the sector were making considerable efforts to meet the levels of demand which were continuing to increase at a very fast rate. Nevertheless, Mr. Urquijo stressed the sector's concerns regarding the rise experienced in electricity charges which, he said, were directly harming the steel industry's competitiveness at a time when the world markets were completely open and when the international flow of commercial steel was continuing to increase.
After commenting on the record production figures for 2006 (historical record of over 18 million metric tons of crude steel), UNESID president Gonzalo Urquijo remarked that Spanish steel industry exports grew by 2.7 percent in 2006 to reach a total value of €6.500 billion, while imports grew by 25.9 percent with a resulting increase in the trade deficit. Nevertheless, he went on to point out that the average value of the tonnage being exported was 63 percent higher than that of the imported tonnage - proof of the higher value added exports produced by the Spanish mills in line with their higher levels of technology and quality. As a result, apparent consumption of steel rose by 13.1 percent compared to the previous year. Remarking on the favorable economic context and steel's essential role in economic development, the UNESID president stated, "The Spanish steel industry has a clear horizon for expansion before it."
Mr. Urquijo next moved on the issue of energy costs, recalling that electricity costs had risen by 30 percent over the past two years, while the price of natural gas had gone up by 85 percent. He added that, while the increases had been absorbed without great trauma over the last two financial years due to the high levels of demand, when consumption would fall the sector would be left facing the accumulated increases in energy costs with the negative knock-on effects this would entail as regards competitiveness. In this context, the UNESID president appealed to the Spanish minister for industry, who was among those present, to ensure competitive energy rates for the domestic steel industry. At the same time, he referred to the steps which the domestic steel industry had taken to tackle CO2 emissions, stating that these had fallen considerably since 1990 even though production had practically doubled since then. Mr. Urquijo also promised continued progress on environmental issues.
Turning to the international steel markets, UNESID president Gonzalo Urquijo expressed the sector's concerns regarding the threat of destabilization posed by China, also referring to Turkey, which he said was a source of worry for Spanish producers of long products. Mr Urquijo also referred to the new challenge of multinational structures which Spanish steel enterprises were facing, declaring that Spanish producers were confronting this challenge "with decision and with a clear focus on the future," and adding that most Spanish steel enterprises were integrated in multinational groups while various enterprises based in Spain were leaders in the international markets for certain products. Finally, Mr. Urquijo affirmed the Spanish industry's commitment to research and innovation, citing the work being carried out by the Spanish Technological Steel Platform (PLATEA).