Industry overcapacity

For European Steel, Less Can Be More

Thyssenkrupp – Stahlproduktion
European steelmakers suffer from chronic problems that threaten their future, Mr. Eder says.
  • Why it matters

    Why it matters

    European tariffs on cheap Chinese steel imports have lifted prices and brought some relief to Europe’s steel makers, but firms remain under pressure from overcapacity and weak demand.

  • Facts

    Facts

    • Analysts say Europe’s steel sector needs to consolidate — but that German mills are better placed than rivals in France, Britain and Italy.
    • In an interview with Handelsblatt, World Steel Association President Wolfgang Eder said Europe’s steel industry had overcapacity of 30 to 40 million tons and needed to restructure.
    • Mr. Eder warned that steel companies were at risk of an “agonizing slow death” if they don’t take action.
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    Audio

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Further cutbacks are needed in Europe’s steel industry to save more steelmakers from hardship if not crisis, the president of the World Steel Association, Wolfgang Eder, told Handelsblatt.

“We must muster the courage to close sites and reduce capacities,” he said, explaining that the industry has been producing 30 to 40 million tons of excess steel each year for the last 15 years. “It makes no sense to wait to go bust.”

Mr. Eder, who runs Austrian steel and technology group Voestalpine, said the European Union’s steel sector had production capacity of more than 200 million tons but demand was really only 150 to 170 million tons.

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