A couple of headlines caught our interest this morning. The German Wirtschaftsvereinigung Stahl had reported that crude steel production in Germany in February 2021 would have fallen by 10% compared to the same period last year.
At the same time, the press department of WV Stahl wrote very dramatically that the cautious upward trend of recent months had not continued. And that the recovery of the steel economy in Germany remains susceptible to disruption (Source).
Reports from WV Stahl and the trade press do not match up
At first, this makes us suspicious. Because with reports that steel prices are exploding in Europe, steel shortage and no material is available, Safeguard is possible to be extended AND after multiple reports that steel inventories in Germany have repeatedly fallen to 33-year lows, something doesn’t add up here.
Trade press says weather in February is to blame
If you look instead at the trade press (in our example, S&P Global Platts), you quickly find the whole explanation as to why there has been a 10% reduction in crude steel production in February 2021 in Germany. The weather is to blame. Because in February, Germany was engulfed in snow chaos. Which led to considerable restrictions in logistics for some German steel producers (Source).
Besides, this circumstance would only further fuel the steel shortage in Europe.
Why does WV Stahl leave out important information?
We naturally wonder whether there is a reason here for the omission of crucial information from WV Stahl. Is it the desire of the German steel industry to look worse in the eyes of politicians? After all, they currently want to push through CBAM – the EU Carbon Border Tax – and it would be fitting if they were not in such a good position as an industry. Or is it the fear that the EU Safeguard measures might not be extended if you don’t present yourself as badly as possible to the outside world? Or is WV Stahl being used as a mouthpiece for EUROFER? We do not know.
However, the Wirtschaftsvereinigung Stahl would be happy to answer this question for us. We look forward to it!
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