By Alex MacDonald
The European Parliament Thursday called on the European
Commission to urgently implement an action plan to help the ailing
EU steel industry safeguard its competitiveness and jobs as it
undergoes restructuring to remove excess steel production capacity
amid anemic steel demand.
The parliament passed a resolution Thursday that called on the
commission to include the EU steel industry in its current review
of EU state rules.
Over the past several years, the EU steel industry has faced the
twin challenges of protracted weakness in regional steel demand due
to the economic crisis and stiff competition from abroad stemming
in part from stringent EU environmental rules that make it cheaper
to produce basic steel products abroad.
European steelmakers have responded to the protracted
weakness--EU steel demand is still at least 28% below the levels
seen in 2007--by idling blast furnaces and in some cases
permanently shutting them down. ArcelorMittal (MT), Europe's
largest steelmaker, is currently operating only 14 out of its 25
European blast furnaces and plans to permanently shut down four
blast furnaces, two in Liege, Belgium, and two in Florange,
France.
Members of the European Parliament said they "welcome the
commission's promise to deliver an action plan for the steel sector
by June 2013 but stress the need to have it as soon as
possible."
Parliament called on the commission to ensure that the
restructuring or relocation of steel plants is carried out in
compliance with EU competition law and to monitor potential abuses
of dominant market positions.
It also called on the commission to monitor imports of steel
products and steel pipes beyond the end of the year.
EU lawmakers said the steel industry remains a strategic EU
sector and the commission should provide a wide range of tools to
help the industry, including increased funds for research,
development and innovation from the European Investment Bank, a
skills policy, and EU financial instruments, such as the European
Social Fund and the European Globalization Fund.
Wolfgang Eder, the CEO of Austrian specialty steelmaker
Voestalpine AG (VOE.VI) and president of the European Steel
Association, or Eurofer, previously estimated that EU crude steel
production capacity in the EU bloc of 27 member states will drop to
around 50 million tons a year by 2030 from around 210-215 million
tons annually at the moment after falling significantly from three
decades ago. Meanwhile, the number of EU steel industry jobs has
dropped to 369,000 in 2012 from 1 million in 1970, according to the
EU parliament.
Eurofer Director General Gordon Moffat welcomed the resolution,
noting that it "clearly defines most, though not all, political
issues that have to be worked on urgently to keep our industry
competitive on the global markets."
Write to Alex MacDonald at alex.macdonald@dowjones.com
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