A STRATEGIC RESOURCE The European metals industry has been hit hard by global overcapacity, but it still has a vital role to play in the wider economy. Sean Milmo reports.
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he European metals sector is facing huge challenges at the moment, the outcome of which could dictate its longterm future within the region’s economy. A major problem is the impact of production overcapacity in China, which has led to a flood of low-priced imports, particularly of steel and aluminium, stemming from a growth slowdown in the country This may be resolved over the next few years as Chinese domestic demand picks up to provide a more equal balance between supply and demand. However, in the longer term competition on the global arena from the metals industries of China and other emerging markets could potentially be a severe threat. In addition, European metals producers face difficulties at home from continued high energy costs – which put them at a competitive disadvantage internationally – and the effects of climate change measures from the European Union. 6 Industry Europe
Much of the European metals industry’s troubles – from imports and issues like energy costs – are affecting the bulk end of the sector the most. This has prompted commentators and even politicians to urge the industry to concentrate less on defending its commodities businesses and more on the added value and higher tech sections. Industry representatives are stressing the importance of the sector maintaining a strong commodity segment to provide a crucial support for a series of value chains which in their entirety can be world leaders. While metals are crucial materials in sectors like transport, engineering and construction, they are also vital to technologies in high tech segments, such as electronics and aerospace. The industry also believes that it can make a massive contribution to Europe achieving its ambitious aims on climate change. The European copper industry reckons that its sector alone can make substantial cuts to CO2 emissions through the supplies of its
metal to downstream industrial, residential and service sectors. “It is not a pipe dream,” says the European Copper Institute (ECI) in a recent report on the decarbonisation of Europe. “By 2050, copper can reduce the European Union’s carbon emissions by 25 per cent – more than 1100 million tonnes per year. With proper investment in this oldest of mined metals, copper can help to achieve the decarbonisation goals of the European Commission.” The steel, aluminium and copper industries feel they have a big role to play in enabling the European Union to establish circular economies in which the resource value of products are retained as long as possible. The industry’s message is that this is essential not only to combating global warming but also to making the best use of resources which are often scarce. “A strong and innovative steel sector is key to meeting the EU’s objectives for a prosperous, sustainable, resource-efficient
