We put a few questions to Christophe Lagrange, executive board member of the European association EURANIMI. Our aim was to address the key issues currently affecting (stainless) steel importers and their customers in the downstream metal processing industry in Europe. Specifically on European market protection measures, such as Safeguard, Anti-dumping and the EU Carbon Border Tax (CBAM).
Are EU’s market protection measures a job killer?
Steelnews.biz (SNB): How many manufacturing jobs do you think the EU’s market protection measures in the metals industry have probably already destroyed in the EU?
Christophe Lagrange, EURANIMI (CLE): We believe that this figure is hardly measurable in the EU. Because there have been considerable shifts within Europe. In Germany, for example, many jobs have been lost, which have then been re- created in countries such as Poland and the Czech Republic. We are currently feeling the next shift to countries such as Ukraine, Hungary or Bulgaria.
The fact is that “protection” against “dumping” leads to higher material prices and subsequently seeks compensation in the salary structure of people in order to keep the EU as a whole competitive. We are concerned about this development.
Stainless steel: Who are the real price drivers?
SNB: In the stainless steel sector, who do you think are the real price drivers, whether it’s price reductions or price increases?
CLE: While for decades the nickel price and nickel stocks have been assessed as a leading factor, today they have completely decoupled from the market. The reason is, on the one hand, the high degree of speculative susceptibility on the stock exchanges, which have nothing to do with the market and, on the other hand, the influence of the real price drivers, such as:
- Lack of production capacity in the EU
- Restriction of import volumes by Safeguards
- Capacity bottlenecks in global logistics
- General shortage of raw materials and semi-finished products, such as scrap and stainless steel coil and sheet shortage
Why does the voice of the downstream industry carry so little weight in the EU?
SNB: Why do you think the downstream processors do not have the same or even more weight in Brussels? At the end of the day, there are many times more jobs than there are in the steel manufacturing industry.
CLE: This is certainly due to the supply chain of our products. Large quantities and large numbers of employees are organized in very few mill-related associations. After that, the supply chain splits into many different branches:
- Direct sales
- Distribution via all sorts of wholesalers (generalists, specialty, mill-tied, independent, etc…)
- Sales via traders
- Sales via defined projects, etc.
And here the interests are often so very different that it is difficult to build up a community of interests accordingly.
In the end, who benefits from all the tariffs and duties?
SNB: In your opinion, who really benefits from all these tariffs and safeguard discussions in the end?
CLE: In theory, we Europeans benefit if it is systematically, properly and fairly regulated.
The truth, unfortunately, is that the lobbying of some interested parties leads to distortions. That measures, such as for example anti-dumping measures, that are primarily meant to bring unequal situations back into balance, are in practice “cutting off” all economically viable imports from the concerned origin.
End to EU Safeguard Measures: What is your solution?
SNB: The EU Safeguard measures will be reviewed this year. In your opinion, what is the optimal solution for Europe?
CLE: It was not a bad idea to introduce these Safeguards Measures at the time, so that the USA closure would not lead to a massive material flow into the EU.
But today, we must recognize that our economy is very robust despite the pandemic and it requires more material in many fields than can be produced in the EU itself.
In order not to provoke damage due to shortages, the EU would be well advised to reconsider if a quota is still necessary in each and every product group; to adjust the quotas of some groups of materials, or to split some quotas in more detailed sub-groups, so that mass-produced articles do not force special products out of the import market as was the case in the common assessment.
A lack of availability of supposedly small groups can be particularly damaging to our food, chemical and medical industries.
Steel shortage in the EU: And EU mills are still exporting to the United States?
SNB: The media are currently reporting again and again that there is little or no stainless steel to be had. But European steelmakers are still selling material to the United States despite Section 232 duties. How does that come about, and doesn’t that hurt the European economy?
CLE: How does it come about? That’s easy to tell… After Sec 232 closure on USA market, very high prices on average are being paid. Because own capacities are not sufficiently available in the USA.
Of course, it would be detrimental to the European economy if the shortage of materials is exacerbated by exports. But the market economy allows free sales at higher prices. As the world export champion, the EU must react by increasing import quotas in order not to suffer any damage.
The EU market is to be closed more and more: How can this be prevented?
SNB: The Eurofer and steelmakers never tire of constant new demands for anti-dumping duties, anti- subsidy proceedings and an extension of Safeguard measures. What measures should now be taken next by the metalworking industry and your associations in order to be heard by the European Commission?
CLE: There are not many possibilities.
A clean analysis, and serious reporting within the EU – regulations are the only way.
It is important that the downstream associations, such as ours, become strong and loud through a large number of members. Then the EC would also be forced to listen to the very large downstream sector.
EU CBAM: What is your position on Green Steel?
SNB: What is Euranimi’s opinion on the EU’s proposed Carbon Border Tariffs (CBAM)?
CLE: This discussion is, after all, a sub-item of the GREEN DEAL in the EC.
It is a fact, in the interests of the next generations, that we all have to do something.
Economic thinking people have problems listening to all the themes of the “Fridays for Future” movement, but the fact remains that we all consume far too much resources of our planet in a too short time. Some things must be changed quickly and sustainably.
All of us, worldwide, must be clear in this context that environmental protection and sustainability cost money!
And here EURANIMI’s criticism is directed at the model of CO2 – border tariffs.
The system is still trying to combine environmental protection, financial revenues, and fiscal equalization for weak countries. In addition, there are various compensatory interests in the issue certificate trade and export compensation, as in the case of VAT compensation.
And all of this is intended to prevent economic changes in countries out of Europe.
We believe that the EU with its possibilities, should lead the way. But we should not build a questionable, complicated, and complex system.
The control and actual evaluation in third countries is difficult/impossible to organize.
In fact, producer by producer would have to be evaluated in a fair system. There are many producers, including in third countries, who have already bought and installed the most modern technology, including from Europe, in the interests of sustainability.
In our view, the EU should lead the way in a system of direct investment in local industrial investment and energy production. Then it must become clear to concrete amounts of investment that the EU is moving forward. After we could ask other worldwide areas to follow us.
You don’t know what the EU Carbon Border Adjustment Measure is?
You can find more information about CBAM here!
Who or what is EURANIMI and what does the association stand for?
SNB: Who or what is EURANIMI and what does the association stand for?
CLE: EURANIMI is the European association of independent (!) importers of steel, stainless steel and metals: stockholders, processors or traders.
The aim of our association and its members is to counterbalance the very strong lobby of the steel and metal producers. Today, at all levels of political decisions, and most of all at EC-level, the sole voice that is being expressed by “our” sector is the one of the producers. Its downstream sector is much larger and much more important – but is totally silent. In our world of steel, stainless steel and metal, there is much more than production only!
What we want is fair global trade that respects WTO directives. There is a need for more balanced and more fair procedures. Not in the future. We mean NOW. And fair to ALL. Not just fair to the producers.
When and why should a company become a member of EURANIMI?
SNB: When and why should a company become a member?
CLE: Our members are typically medium-sized private companies, independent from any producer and therefore free to buy their required quantities of semi-finished products from any source of their choice, either for distribution purpose or for further processing.
Such companies become a member of Euranimi because they understand that within the structure of the EU / EC some things can only be achieved TOGETHER. Such companies understand that a democratic system requires that each party has the duty to express its opinion to decision takers and that such opinions are best channeled through a large association rather than individually.
Our members want to be recognized and heard by the EC as the representatives of the vital “middle-link” in the supply chain. They want the EC to be well informed of ALL the aspects and requirements of the COMPLETE supply-chain, before taking fair, informed and well-balanced decisions.
In the vast majority of European countries, it is not individual large companies that form the economic backbone of the country, but the many independent medium-sized enterprises.
SNB: Many thanks to EURANIMI and Christophe Lagrange for the detailed interview.
EURANIMI – European Association of Non-Integrated Metal Importers & Distributors
Disclaimer: All answers/opinions shared by the interviewees are their own. SteelNews.biz or the interviewer is not responsible and is not liable for any discrepancies.
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