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General overview of sector

Steel is an industry that largely follows the cyclical economic trend in downstream sectors such as the automotive industry, shipbuilding, railways, etc. It has undergone large-scale restructuring over the past three or four decades, accompanied by widespread job losses.

The “iron and steel industry” designates the industry and technologies for obtaining steel, iron and cast iron from ore. The demand for iron and steel in industrialised societies derives from a number of downstream industries, such as the automotive sector, construction, shipbuilding, railways, consumer goods, etc. Demand largely follows the cyclical economic trend in those sectors. Furthermore, the production of base metals is dependent on imports of raw materials, reserves of which are scarce in Europe: this leads to dependence on international trade. (The two main exporters of iron ore are Australia and Brazil, followed by countries such as India, Canada, South Africa, Ukraine and Russia.) Europe’s main importers are Germany, France and the United Kingdom.

According to Eurofer, the European steel industry operates at some 500 production sites located in 22 Member States. Just before the economic crisis erupted in 2008, it generated annual revenues of approximately €200 billion, produced around 200 million tons of steel per year and employed 420,000 people (Eurofer figures). Employment in the sector has been contracting steadily since the 1970s. The EU accounts for 16% of global output and is the second biggest producer after China.

In the 1960s and 1970s, iron and steel companies in the Member States of the European Coal and Steel Community (ECSC) experienced a crisis of over-production. The Davignon Plan, aimed at cutting capacity, was implemented in 1976. The recession of the 1980s saw a collapse in prices and a sharp increase in national financial aid. At the end of the 1980s there were still 1,250,000 jobs in metallurgy in the EU-15 alone (in European Commission, “Panorama of European Business”, OPOCE, 2000). Thus employment has plummeted between then and now.

The industry, which consists principally of large enterprises and multinational concerns, has undergone substantial restructuring since the 1980s - 1990s. This has led to a series of company mergers: Thyssen and Krupp (1997), Unisor and Cockerill Sambre (1998), British Steel and Hoogovens (1999), Aceralia-Arbed-Usinor, which in May 2002 resulted in Arcelor, and then Mittal’s takeover bid for Arcelor in 2006.

The main live issues in the sector during the 1990s revolved around products: competition from substitute materials (plastics, high-tech ceramics, etc.) was becoming ever more intense, with metals sometimes struggling to compete in terms of weight, wear and tear resistance, and price. The emphasis has gradually shifted to three other topics since the turn of the millennium: mounting international competition (from eastern Europe and Asia); the constraints connected with combating global warming; and, more recently, the economic crisis that erupted in 2008.

Nowadays the European steel industry is part of the ETS system on the trading of greenhouse gas emissions. Steelworks must therefore pay for their CO2 emissions, which is not the case in India or China, so that a form of environmental dumping is operating. What is more, steel consumption in the EU slumped by almost 29% in 2009 as a result of the economic crisis, according to estimates by the World Steel Association (Daily Bulletin, Agence Europe 9899, 12 May 2009). Therefore the sector is now faced with the sharpest slowdown in business since the oil crisis of the 1970s.

ETUI and Observatoire Social Européen (2010) European Sectoral Social Dialogue Factsheets. Project coordinated by Christophe Degryse, online publication available at www.worker-participation.eu/EU-Social-Dialogue/Sectoral-ESD