The European Union Competition Council held a special meeting in Brussels on the 9th to discuss how to push the European steel industry through the current cold winter. There are many reasons for the grim situation of European steel industry, such as the economic crisis in Europe, the rising cost of raw materials and energy, but some steelmakers are only targeting China, demanding that the European Union stop importing steel from China, thus protecting the European steel industry.
In this regard, the European Union Competition Commission failed to reach an agreement on the same day. A British steel worker told reporters that China could easily become a scapegoat for the British steel industry's slump because of its relatively low steel prices, but there are many other reasons for the lack of competitiveness of the British steel industry.
According to the official documents issued by the EU, steel belongs to the strategic industry in the EU economy, supporting many other industries such as automobile manufacturing, construction, electronics, machinery and electrical engineering. The EU is the world's second largest producer of steel after China, with annual output of more than 177 million tons, accounting for about 11% of the world's total production. There are about 500 steelmakers in the EU, distributed in 23 member countries.
At present, the situation in the European steel industry can only be described as "grim". Several steel mills have cut production or shut down, thousands of workers are unemployed, and the backlog of steel is increasing.
The European Union believes that there are many reasons for the cold winter in the European steel industry, including the falling price of steel and the dramatic reduction of demand caused by the ongoing economic crisis; the increasing cost of raw materials such as iron ore; the rising price of energy, which affects energy-intensive industries such as steel; and stricter environmental protection laws, which lead to investment. The cost of capital is high. In addition, the European steel industry is also facing "fierce competition" from non-EU member states such as China and Russia.
Although there are many reasons for the downturn in European steel industry, some European steelmakers and some people intentionally exaggerate the impact of imported Chinese steel on the European market, and then demand to prevent China from "dumping" steel into Europe. The European Competition Council meeting on September 9th became a venue for European steelmakers to complain and put pressure on the European Union.
So what is the real situation? Britain has been hit hard so far in the cold winter of the steel industry in Europe. The 9th meeting was proposed by Said Javid, the British Minister of Commerce. But a Reuters report tells another story.
Reuters pointed out that global steel prices have declined due to the slowdown in economic growth, and that China's steel industry is also facing difficulties when British workers accuse China of squeezing its own steel industry.
According to the International Bureau of Iron and Steel Statistics, Britain imported 752,000 tons of Chinese steel last year, accounting for only 6.1% of the total British imports in that year. But the low cost of Chinese steel makes it easy for China to become the scapegoat for the depression of British steel industry, although there are other factors that lead to the lack of competitiveness of British steel industry.
"It's easy to blame China," says John Lawrence, a steel worker who has worked for 35 years in Skansop, a small town in the northeastern UK. But it's not China's fault that the British steel industry lacks a level playing field. In Britain, heavy industries such as steel have to pay higher energy costs. From January to June this year, the price of electricity used by British steelmakers was 80% higher than the EU average, which is twice as high as that of the United States.
Therefore, in the resolution adopted on the 9th, the European Union Competition Council not only hopes to have bilateral dialogue with China, Russia and other third-party steel trade, but also considers how to take concrete measures to improve the competitiveness of European steel industry.
In recent years, the economic and trade relations between China and the EU have become increasingly close, and inevitably there will be some differences or frictions. However, when the economic situation is severe, Europe is more likely to have a voice against China, which is essentially still a protectionist thinking. How to properly resolve these differences and frictions requires friendly consultation between China and the EU in the spirit of equality and mutual benefit, and promote mutually beneficial and win-win economic and trade cooperation.