The steel industry has long held a strategic place in the EU economy, fostering innovation, growth and employment. Now it is time for the steel sector to undergo a revival. The European Commission is working to boost the industry to a new level in order to face current obstacles and ensure a promising future.
An action plan to help the European steel industry confront today’s challenges was presented by European Commission Vice-President Antonio Tajani in June 2013. The Commission is acting because steel demand in Europe is currently 27 % below the pre-crisis level, and employment in the sector fell by 10 % from 2007 to 2011.
Because steel is closely linked to numerous industrial sectors – automotive, construction, electronics, renewable energies and many more – it is a vital element of the EU’s goal to increase industry’s share of GDP to 20 % by 2020. Tajani made it clear that the steel industry has a promising future in Europe. ‘With our blueprint for the revival of the steel sector, we send a clear signal to the industry that it is strategically important for Europe,’ Tajani said. ‘We not only want to keep the steel sector in Europe, but want to make it stronger.’
International competition is not always fair
In India, China, the Russian Federation and Egypt, there is an increasing trend to protect domestic steelmakers through the imposition of export restrictions and export duties on raw materials. This unduly raises steel production costs in the EU.
China is the largest steel exporter worldwide, now accounting for almost 50 % of global steel production. In the United States, the shale gas revolution has led to lower energy costs, which improved the competitive position of the steel industry and attracted new investments.
Faced with these challenges, the Commission proposes a series of measures to support Europe’s steel industry:
Increasing demand for steel
According to the Organisation for Economic Co-operation and Development (OECD), global steel demand is expected to increase to 2.3 billion tonnes by 2025 – the 2013 total is 1.4 billion tonnes – mainly from a few key steel-using industries: construction, transport and mechanical engineering, particularly in emerging economies.
The construction and automotive sectors alone account for 40 % of steel demand. The Commission will continue to promote these sectors by, among other things, stimulating the demand for environmentally friendly construction projects and alternative fuel vehicles.
Improving access to foreign markets
To enable the EU steel industry to profit from fast-growing economies, the Commission will ensure a level playing field by supporting EU steel exports, fighting unfair practices and ensuring access to vital raw materials. In addition, scrap markets will be closely monitored to help EU steelmakers using scrap as a raw material.
Addressing skills needs and easing restructuring
A series of measures will be launched to promote the employment of young people in the sector through the reinforcement of apprenticeship schemes and youth-oriented recruitment processes. The Commission will also explore the possibility of using relevant EU funds to help workers find alternative employment in cases of production site closures or significant downsizing.
Despite a fall in overall output and employment, the European steel industry remains internationally competitive. The EU registered a 4 % increase in steel exports in 2012, plus the EU is still the second-largest producer of steel in the world, with an output of more than 177 million tonnes per year – 11 % of global output. Within the EU, 500 production sites are spread throughout 23 Member States, employing more than 360 000 people.
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