European steel companies are at risk of destroying their own industry unless they close mills to cut overcapacity and halt falling prices, the Eurofer lobby said.
“There is enormous danger for the whole industry,” Wolfgang Eder, the steel group’s president, told journalists yesterday. “The plants need to be closed. The larger groups are destroying their businesses by keeping all the plants going.”
Steel-industry earnings have slumped as Europe’s economic crisis saps demand and slower Chinese growth weighs on prices. Steelmakers are grappling with spare capacity, while costs rise. Europe, with the capacity to make about 200 million metric tons of steel a year, needs to close plants capable of producing about 40 million to 50 million tons in the next three years, said Eder, also chief executive officer of Voestalpine AG. (VOE)
European steel industry shares have tumbled 19 percent in 2013, the worst among 37 industry groups tracked by Bloomberg. ArcelorMittal, the biggest steel producer, said last month that European demand would drop to a low this year before rebounding.
Politicians and labor unions need to respect the decisions of company owners when it comes to closing plants, Eder said.
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