Eurometal sends letter to EU Commissioner Valdis Dombrovskis

Eurometal has send a letter to the EU commision, anticipating the EU-US Summit planned for 20 October in Washington:

Dear Mr Dombrovskis,

Eurometal has evolved through the years to become a member-oriented service provider, gathering all operators of the steel intermediation chain: National Federations, International Associations, Steel Service Centres, Steel Distributors, Steel Traders, World Steel Supply Chain Operators and Associated Steel Stakeholders.

One common element among the members is that we are all in favour of fair trade, free competition and a level playing field for all players. We also need certainty about the market ruling. Our business is exposed in many areas to changes in legislation, and due to sometimes long supply chain routes it takes a considerable amount of time to incorporate these modifications into our processes.

The main issue currently being discussed is a new EU-US agreement on sustainable steel and aluminium, and the outcome of the EU-US Summit planned for 20 October in Washington will be a key moment in these talks. We hope for an agreement that tackles the issue of global excess capacity while supporting the decarbonisation plans of the industry. Europe can become a top producer of low CO2 steel products globally and our industry is now actively working towards this end goal. The Commission should support and facilitate these initiatives whilst of course ensuring that fair trade and free competition is respected.

The European Commission is currently in the testing phase of CBAM implementation, following legislation coming into force on October 1st.  However, as of today not all national entities are able to provide details necessary for implementation. This introduces even more uncertainty into our sectors.

So far, the ETS scheme is making European steel producers less competitive compared to alternatives. CBAM will be applied to imports of semi-finished and finished steel products as covered by the Safeguard Measures, but it is extremely challenging to apply it to all products containing steel components. We are already witnessing an increase in imports of closer to consumer products in certain market areas. This is detrimental to our customer base, the processors, and we expect the Commission to provide assistance and prioritize the interests of steel users and industries that consume steel. There can be no market for low CO2 steel without a market of steel consuming industries.

Serious improvements are also needed in the design of the CBAM, especially in terms of exports and downstream additions.  In its current design there is a high risk that the instrument could distort existing trade patterns.

All these legislative changes are introducing lots of concerns to run our businesses at the edge of additional movements expected as an outcome of the US negotiations.

By this letter we would like to highlight that any position from the EU Commission should take into account the interest of all parties involved, understanding the needs of all the components of the steel supply chain and ensuring that everyone’s interests are protected and that fair competition principles are protected. Listening to all those involved, sometimes, needs time.

We offer you our contact once more to gain the perspective of a highly representative segment within the steel industry, including distributors and processors. We would like to reiterate our message: it is only with a robust community of steel producers, end-users and consumers that we can consolidate the industry and look towards the future with hope.

Fernando Espada
President