Over the next 20 years, several blast furnaces in Europe will need to be taken off-stream, worldsteel chairman, Wolfgang Eder said at last week’s Handelsblatt conference in Germany, which was attended by Kallanish. He warned that some 6-8 steelworks should be considered for closure. This may mean a “farewell to two thirds of capacities supplying commodity grades,” he added.

In the long run, many European producers of commodity grades will be unable to compete with low cost producers in Turkey, Ukraine, Russia, China, and India, explains Eder, in what has become a long-standing campaign of his to engage greater support for Europe’s steel industry from the region’s policymakers (See Kallanish, 1 October).

This means Europe’s steelmakers must specialise more in high-end products with large profit-margins, as the days for the region’s commodity grades are numbered. At the moment, there is insufficient money to make the necessary investments to ensure Europe’s mills can keep up technologically with their competitors in Asia. This means Europe is looking at losing its cutting edge in regards to technology, he warns.

He also noted previous mergers and acquisitions had not solved today’s problem of high-overcapacity, because although the companies were consolidated legally, “nothing whatsoever changed structurally”: “In the mid-‘90s, 26 flat steel producers existed in the EU. Now, it is only six or seven.”

In terms of today’s real EU capacity of roughly 210 million tonnes of crude steel, some 30-40mt can be considered as surplus to requirements, he notes in an interview with German newspaper, Westdeutsche Allgemeine Zeitung. If you reckon on roughly 5mt of production per location, this is how you could envisage over 6-8 shuttered steelworks, he adds.

Eder argues that in its own overseas investments, Austrian-based voestalpine is far from adding to the overcapacities that exist elsewhere. In China, for instance, the group is growing its automotive parts and profile production, and could set up speciality steel production. “But, we will certainly not invest in any blast furnace any more, anywhere,” he stated.

He also compared Europe to the USA, where voestalpine is building its Texan hot briquetted iron plant, and where, he says there is greater long-term reliability for industrial investments: The USA “would never impose conditions that would question the competitiveness of its industries.” By contrast, the current European discussion for renationalisation of Ilva in Italy is a “call from the Stone Age”, he believes.