EUROFER: a literal call for some 'closure' in European steel companies
The focus may be "European big steel," but the trickle-down effect of recent comments by EUROFER President Wolfgang Eder is cause for concern, as he sees the current supply-demand balance as so far off that the industry faces destruction if mills do not cut overcapacity.
Cited in multiple wire stories, Eder, who is CEO of Voestalpine AG, said that conditions are such that companies must take action to control falling prices. "There is enormous danger for the whole industry. The plants need to be closed. The larger groups are destroying their businesses by keeping all the plants going."
In the reports, Eder observed that steel prices have fallen from the combination of Europe's economic crisis and slower Chinese growth in demand. Europe, which has annual capacity of 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, he said. He noted that stock prices for the European steel industry have fallen nearly 20% this year, and that ArcelorMittal, the world's biggest steel producer, reports that European demand is expected to 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, adding that, "Interfering makes things worse."
EUROFER, founded in 1976, and located in Brussels, notes that it represents 100% of steel production in the E.U.