Steel mills and distributors in the EU are becoming increasingly interdependent amid weak export competitiveness and tougher import measures. At the same time, energy prices remain the main factor determining investments in steel production in the bloc's countries.
This was stated by industry representatives at the EUROMETAL regional meeting in Central Europe, which was held in Warsaw last week. Kallanish participated in the discussion.
Given the energy costs and carbon emissions faced by EU enterprises but not borne by their foreign competitors, it is increasingly difficult for European manufacturers to talk about external expansion.
"We can forget about competitive exports outside of Europe. We won't last even a month without European clients," said Jiri Mravec, Head of Innovation and Transformation at Trinecke Zelezarny.
According to him, in times of crisis, it is especially important that steel producers and the entire supply chain stay together.
"We are fighting side by side. I mean not only steel producers, but also the entire supply chain. In a crisis, you find your friends," he added.
According to market participants, European customers will increasingly switch to purchases within the region as it becomes more difficult to overcome new trade barriers. Tomas Plaskura, Director of Marketing at ArcelorMittal Europe in Eastern Europe, noted that this shift is taking place gradually, partly due to the significant reserves accumulated in previous quarters.
"As for competitiveness, our main goal, of course, is to remain competitive in Europe across the entire value chain," he said. "We also agree on the need to expand import protection measures to the next stages."
According to the participants of the meeting, the ETS emissions trading system has been a "double-edged sword" for the industry so far. For Trinecke Zelezarny, the issue is particularly sensitive: the company receives quotas mainly for the blast furnace, but at the same time its own blast furnace gas-fired power plant reduces these reserves and increases costs.
"We are already discussing how to include this in the price of our steel — through a surcharge for CO2 emissions or in some other way," said Mravets.
He added that a cost increase of 160 euros per ton would very quickly displace the company from the market.
"This forces us to reduce emissions, but we have to do this at a time when we don't have the necessary profitability. We don't have the EBITDA margin to just pay banks," he said.
Mravets also stressed that at a price of 200 euros per megawatt-hour of electricity, it is not possible to calculate the payback of any electrification project in Excel.
"Nobody