After suffering for some seven years through to 2015, the world’s steelmakers have had cause for cheer over the past couple of years. Following some heavy losses and write-downs, they finally appear to have emerged from the wreckage of the global financial crisis. An economic upswing has taken root in most regions of the world, Chinese steel output and export growth has slowed noticeably, and steel prices have enjoyed an upward swing in consequence.
Following the sharp upturn in galvanized steel prices seen during the early months of this year, German steelmaker ThyssenKrupp announced back in April its intention to re-open its Galmed plant in Valencia, Spain by the end of this year (outbound link in Spanish). The facility, which can produce up to around 400,000 tonnes per year of hot-dipped galvanized steel (HDG) had previously been shuttered in late 2013.
And with Spanish car production up by around 11% during the first half of this year as well, the time seemed right to re-open a facility that previously shipped large quantities of HDG to Spain’s automotive factories.
But there are now thought to be doubts creeping in at ThyssenKrupp, which may opt to delay the re-opening of its Galmed plant until March 2017.
After having gone after imports of both hot-rolled coil (HRC) and cold-rolled coil (CRC) this year, will the European Commission soon be turning its attention to imports of galvanized steel? (primarily hot-dipped galvanized material (HDG))
In all likelihood yes but just how effective would any import restrictions be?
Let’s take a look at the case for implementing trade protection measures on these products and what effect they may have.
With prices of many commodities at multi-year lows, recent financial releases from some of Europe’s major steelmakers delivered a reminder that not everything is bad in the steel industry.
Why, when most stories surrounding the steel and commodity markets are overwhelmingly negative these days, might this be the case?
The phrase ‘sick man of Europe’ has been used time and again over the past century, and used against almost every individual European state at one point or another to describe a country afflicted by economic adversity or impoverishment.
During much of the 1970s the UK enjoyed the dubious honour, while in the 1990s it was Germany’s turn. With their inability to balance a government budget for more than 30 years, both France and Italy have regularly contended for the title.
Nowadays it is a hotly-disputed mantle and, depending upon which statistics are looked at, a case could be made for any number of countries. In the European steel industry, however, there is one market that stands out as suffering particular adversity. That market is Italy.