Bloomberg the Company & Products

Bloomberg Anywhere Login

Bloomberg

Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world.

Company

Financial Products

Enterprise Products

Media

Customer Support

  • Americas

    +1 212 318 2000

  • Europe, Middle East, & Africa

    +44 20 7330 7500

  • Asia Pacific

    +65 6212 1000

Communications

Industry Products

Media Services

Follow Us

Europe Steel Companies Destroying Industry by Keeping Mills Open

Don't Miss Out —
Follow us on:

June 6 (Bloomberg) -- 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.

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.

“Interfering makes things worse,” he said. ArcelorMittal faced political pressure and clashed with unions in France and Belgium following plans to shutter sites in Florange and Liege.

To contact the reporter on this story: Thomas Biesheuvel in London at tbiesheuvel@bloomberg.net

To contact the editor responsible for this story: John Viljoen at jviljoen@bloomberg.net

Please upgrade your Browser

Your browser is out-of-date. Please download one of these excellent browsers:

Chrome, Firefox, Safari, Opera or Internet Explorer.