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Steel overcapacity a global issue: Salzgitter exec

Keywords: Tags  Salzgitter, Jörg Fuhrmann, Steel Success Strategies, overcapacity, protectionism, Cem Turken

ISTANBUL — Overcapacity in the steel industry is a problem both in Europe and globally, Salzgitter AG chief executive officer Heinz Jörg Fuhrmann said Feb. 6 at AMM sister publication Metal Bulletin’s Steel Success Strategies conference in Istanbul.

"The unused capacity is 350 million tonnes per year worldwide. This is not only in the E.U. but is located elsewhere, such as China, the rest of Asia, Nafta (the North American Free Trade Agreement region), Japan, India and the CIS (Commonwealth of Independent States)," he said, adding that protectionism is another global issue for the steel industry.

"The E.U. is a free-trade area and there is no import duty on steel products. We maintain a strict state-aid regime, while the USA is much more protectionist," Fuhrmann said.

Steel production in Germany has returned to levels seen before the 2008 economic crisis and is now at 40 million to 43 million tonnes per year, while the industry in the rest of the European Union is weakening, he said.

Crude steel production in the European Union is falling, raising the unused steelmaking capacity to 40 million tonnes per year. Some capacities should now be taken out of the market where possible, as in France and Belgium, Fuhrmann said, adding that it is important to differentiate between structural oversupply and oversupply resulting from weakness in particular end-user sectors.

Salzgitter is the second-largest steel producer in Germany, selling almost 70 percent of its production locally and 95 percent within Europe. The company’s steel output reached 7.3 million tonnes in 2011.

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