System to protect against unfair competition no longer fit for purpose

The EU stainless steel industry currently finds itself in a devastating position: a generally weak economic environment has coincided with the US administration’s unpredictable duty/tariffs policy, thus creating more and more uncertainty across Europe. This is making any private and industrial investment decision ever more difficult, or even worse leading to that investment being made not within Europe but elsewhere.

The safeguard system originally designed to protect the European stainless market against unfair competition needs urgent modernisation as the continent’s market size has changed dramatically over recent years. EU stainless steel production is loss-making even though it is the most sustainable in the world, realising significant savings in greenhouse gas emissions through adopting the scrap-based production route. As a consequence, demand for stainless steel scrap is very low during the weak, holiday-affected summer months and thus prices remain under extreme pressure.

Despite its more negative environmental impact, nickel pig iron has emerged as an alternative to stainless scrap. And now we are even witnessing imports of slab into Europe, which makes melting obsolete. This is indeed a very sad development.

Combining all of the above factors, the obvious conclusion to be drawn is that the pressure on stainless steel scrap prices will remain intense.