9 November 2022 – Has the EU stainless steel alloy surcharge had its day and finally lost its legitimacy? A deeper look into the reports of the stainless steel producer Aperam raises justified doubts about the legitimacy of the alloy surcharge. Prices for stainless steel scrap are rising in Europe, in some cases significantly. And hydrogen producers are already calling for the first market protection measures.
Europe: Is the stainless steel alloy surcharge levied illegally?
The alloy surcharge for stainless steel has already come under the scrutiny of the competition authorities several times. And various competition and antitrust proceedings have already been conducted in the European Union.
Stainless steel is mainly produced from scrap
For some time now, the Aperam Group has been stating in its financial reports and ESG reports that the group would produce its stainless steel mainly from scrap or stainless steel scrap. According to the group, the share of scrap will have reached 90% by 2021.
“Our nickel requirement is mostly covered by stainless steel scrap…”
Source: Aperam, Interim Financial Report, June 30, 2022
“That’s because stainless steel is longlasting and infinitely recyclable. For instance, we stand out in the fact that our European production processes use about 90% scrap metal.”
Source: Tim Di Maulo, Aperam Group CEO, ESG, July 2021
“Aperam has a state-of-the art CO2 footprint in the stainless steel industry thanks to its European production route based on fully recyclable stainless steel scrap…”
Source: Aperam, Interim Financial Report, June 30, 2022
Alloy surcharge still legitimate?
The question has to be asked: With what legitimacy is Aperam still levying an alloy surcharge on stainless steel if hardly any raw materials, if any at all, but almost exclusively scrap is used in the European production route?
Europe: Stainless steel scrap prices and demand are rising
The demand for stainless steel scrap has currently increased significantly, especially in France and Italy. France is even reporting a significant shortage of stainless steel scrap and, at around $200 per tonne, a sharp rise in prices for the primary raw material used by European stainless steel producers.
Hydrogen: European producers call for market protection
As soon as a new product comes into the focus of manufacturers, there are calls for new market protection measures, especially in Europe. A “level playing field” is needed to protect the European production of green hydrogen from imports from other EU countries.
Level playing field for whom?
This seems like a mockery when one looks at the efforts of Europeans to set up supposedly green hydrogen production in third countries.
Resistance to the US Inflation Reduction Act
Secretly, the European hydrogen producers are probably hoping for similar support as their US colleagues will receive through the US Inflation Reduction Act. While the Europeans will only be protected from non-green hydrogen imports by the Carbon Border Tax CBAM.
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