29 October 2025 – An expert report from Germany shows: It’s not China ruining Europe’s steel, but electricity prices. Asian base metals showed a stable sideways movement or slight gains on Wednesday.
Base metals and iron ores are showing positive signs
Asian base metals showed a stable sideways movement or slight gains on Wednesday. Lead (-0.4%), zinc (+0.3%), nickel (+0.3%), aluminium (+0.4%), and tin (+0.7%) moved sideways, while copper improved by about 1.1%. Iron ore prices on the SGX briefly hit a yearly high today, rising by around 1.18% to over USD 107 per ton.
At the European LME, base metals started the trading day on a positive note and posted slight gains. Aluminium prices are currently above USD 2,900 per metric ton, while U.S. aluminium premiums rose again on Tuesday to almost USD 1,794 per metric ton, or USD 0.81/lb.
Germany’s Industrial Policy: Focus on Old Giants Instead of New Ideas
For years, Germany’s industrial policy has been primarily aligned with the interests of large, long established corporations. Innovation plays only a secondary role. Instead of letting the market drive technological development, policymakers try to steer it deliberately-through measures such as the combustion engine ban, high energy prices, and constant new regulations.
The state seeks to direct progress rather than allow it. Its goal seems to be keeping existing economic structures-from the automotive to the steel industry-as unchanged as possible.
This criticism comes from an expert report by the Scientific Advisory Board at the Federal Ministry for Economic Affairs and Energy.
A Model Without a Future
The experts reach a clear conclusion: this model has no future. Many of the key cost advantages that other economies can exploit are unattainable for Germany.
Energy-intensive industries in particular, such as steel production, are suffering under European energy and climate policies. High energy prices make Germany an unattractive location. While the U.S. and China benefit from cheaper energy, Germany is held back by its high energy import costs.
It’s Not China Ruining Europe’s Steel, but Electricity Prices
The real problem of the European steel industry is not allegedly cheap or dumped steel from China. It’s the excessively high energy prices in Germany and the EU.
Calls for new tariffs, lower import quotas, or protective measures are mostly political symbolism. They aim to keep inflexible companies artificially competitive – financed by taxpayers.
In this way, an industry is being propped up that should have long since adapted to new realities.
The Merit Order Principle Has Outlived Its Purpose
The foundation of European energy pricing-the so-called Merit Order Principle-has lost its function. It ensures that the most expensive energy source determines the price for everyone-even for the cheapest suppliers.
The result: No free market, but artificially high prices.
This system does not need cosmetic reform – it needs abolition. Energy prices must be economically viable and capped for industry beyond a certain level. Only when genuine competition between EU member states emerges can fair prices develop.
The Myth of the “Cheap Steel Flood”
The claim that Europe’s steel industry suffers from cheap Chinese imports has long been disproven. The problem lies within Europe’s own energy system – not in Asia.
International observers have recognized this. Only in Europe does one still cling to a fairy tale that nobody else believes anymore.
Latest news
- EU: Tariffs Don’t Bring About Necessary Reforms
- Base Metals Start the Week Stable and Friendly
- Is the EU Trade Committee Heading for a Showdown with the U.S.?
We at the Gerber Group have been trading in stainless steel worldwide for over 20 years. We are your experts when it comes to purchasing, import, logistics and services. Information is a vital part of this. Because only then can you and we make the right decisions. Do you have any questions? Contact us now.
Disclaimer: Many things here represent our opinion. Others are information from the Internet. We can therefore never claim to be correct or complete. And never base a business decision solely on the news you receive from us.
