logo Marcegaglia

EU anti-dumping investigation on steel flats

Davide Lorenzini (Siderweb) interviewed Antonio Marcegaglia - Chairman and CEO of the Italy-based group; global player in the steel manufacturing. Discrepancy between apparent and real production capacity "Before starting to analyze deeply the measure, I would like to contextualize it in the whole scenario  - explains Antonio Marcegaglia. I have already said on other occasions that my view on the European capacity in the steel flat production is a little bit different from the one commonly widespread. In light of the production optimization process started by all manufacturers in recent years, I believe that today the real production capacity of European producers is far below than what officially declared; level that, however, will be difficulty reached again. A clear example is the Ilva issue: in theory, the mill production capacity is about eight/nine million tons of steel, but currently it produces a few more that 5 million. A second example is Tata Steel that, even if it not yet closed, reflects its slowdown on British production statistics. Since the main purpose of the reduction of production capacity (company crisis aside) was to reach a greater production efficiency, I believe that the plants recently closed will be hardly opened again. If we add also some investment in terms of verticalization, as new galvanizing lines for own consumption, the availability of material for players and not-integrated dealers is not excessive. I believe that European authorities have a distorted vision of the market”.   Imports to ensure business continuity “A company as Marcegaglia - the President continues - require about 4.5 million tons of steel in Europe and I assure you that today is not easy to find such an amount. Therefore, companies like us are forced to go abroad. For sure, we are the biggest importer of steel flats in Italy, with a percentage roughly around 60% of total imports, amounting to 30% of the European total. These percentages explains clearly our concern for the EU investigation. We have always looked at European producers: the relationships with Ilva, ArcelorMittal, US Steel, Valsider and Arvedi are well consolidated since years. But today these players are not able to satisfy our requirements and not just for price issues. We must ensure to our companies business continuity. Except for China, since years Russian, Iranians and Ukrainian players are showing positive behaviours. Focusing on flat products, the availability of materials coming form steel mills in Moscow and Tehran, in for export is gradually decreasing due to the strong growth on the domestic consumption side. It is therefore difficult to consider them as a threat. A further problem is represented by duties: if they were launched and confirmed, the hardest hit would be traders and independent transformers, creating instead a clear benefit to the subjects integrated with steel mills. This phenomenon would represent a further distortion of the market". Promoted a collective action "We decided to be one of the promoters of this initiative for the creation of a consortium of companies, led - on the operative level - by the law firm Van Bael & Bellis in Brussels, and has already collected an interesting number of participants, but we expect that they can grow further - says Antonio Marcegaglia. I believe that companies, even if less structured in terms of capacity, have to join the action to “give their opinions” through this tool. Talking of daily operations, the effects, today, are still limited, but in the fourth quarter some consequences coming from retroactive duties may occur. In July, we are experiencing some effects related to emotionality and uncertainty: customers are careful in purchasing. However, the phenomenon could strengthen in September with a potential increase in prices in the last part of the year. Last, the absence of an anti-dumping investigation on galvanized products - in spite of those on cold and hot rolled coils - could generate additional market distortion".

Share on: