Europe’s steel industry faces a “tsunami of problems” if a relaxation of import restrictions goes ahead as planned next week, according to steelmakers including top producer ArcelorMittal.
From July 1, steelmakers from outside the European Union will see tariff-free quotas increase by 5%, raising the risk of more supplies into the bloc. While the industry remains optimistic, there are no signs that the European Commission will backtrack, Geert van Poelvoorde, ArcelorMittal’s chief of flat products in Europe, told reporters in Brussels on Wednesday.
EU producers have opposed the move as demand contracted, especially from the key auto sector, and costs surged at a time when cheap imports into the region remain high. The comments from van Poelvoorde, who is also president of industry lobby group Eurofer, come weeks after he said Europe’s troubled steel market is showing signs of bottoming out.
European steel chiefs wrote an open letter to the commission and the bloc’s leaders earlier this month, saying that an influx of material caused by US tariffs had left the region’s industry in crisis. Almost two-thirds of steel previously sent to America ended up in Europe, van Poelvoorde said at Eurofer’s annual meeting in Brussels.
The commission has said it will speed up its review of imports initially scheduled to be completed by the end of September, but hasn’t yet disclosed the timing.
Sluggish demand growth is another worry. Producers from ArcelorMittal to US Steel Corp.’s unit in Slovakia have reduced output this year because of weaker sales, while British Steel was forced into liquidation. Almost all companies in one way or another are being forced to cut production in Europe, Salzgitter chief Heinz Joerg Fuhrmann said in Brussels.