29 March 2023 – Market sources from Taiwan report that starting materials for certain stainless steel grades and sizes are in short supply or not available at all. The EU is agreeing on new instruments for coercive measures. And the EU Carbon Price has dropped – are EU steelmakers now stopping the Green Transformation?
New EU instrument against coercive measures
It sounds a bit like from the ivory tower when the EU member states agree with the EU Parliament on new market protection instruments or anti-coercive measures.
After the last years were used eagerly with the EU Safeguard measure on steel and the Carbon Border Tax CBAM against CO2 intensive imports coercive measures in the form of tariffs and levies, one wants to act now against measures of other states.
Coercive measures in the form of tariffs and other restrictions
The EU instrument against coercive measures is intended to provide means against states that impose taxes or duties on EU companies that Europeans consider unjustified. And these states with just such measures, e.g. in the form of increased tariffs or import or export licenses – or restrictions on services or the award of public contracts.
Indonesia first target of the new instrument?
The Europeans’ most obvious target here is once again Indonesia, which has been in dispute with the EU for years over its export ban on nickel ores. The dispute has even been taken all the way to the World Trade Organization (WTO) and is likely to remain in abeyance for years as a result of a clever maneuver by the Indonesians.
EU and Indonesia in dispute for years
If one looks at the new instrument against EU coercive measures, the last resort of which is to be the introduction of market protection measures – after all other talks have previously failed – the legitimate question already arises as to how much the EU wants to expose itself to ridicule here? What does it want to do? Impose an import tax on marginal palm oil exports from Indonesia to the EU in order to finally get access to the much more valuable raw material nickel? Or at the end the EV battery production of the Indonesians, so that one finally gets nickel ores from there?
Sometimes it makes sense to be a bit more reflective. It seems more and more like narcissistic behavior straight out of the textbook on the part of the EU. Because narcissists don’t reflect.
Taiwan: Stainless steel starting material running short?
According to market sources in Taiwan, the availability of certain stainless steel pre-materials, such as 304 and 316L, is currently tight. This has already torn holes in the availability of some re-rollers, especially for certain formats a delivery is currently no longer possible.
EU ETS certificates down to 85 euros per piece
The price of European emission allowances has fallen by twelve euros since the beginning of the month to around 85 euros. A significant increase is not expected by the analysts of Deutsche Bank for the time being. This is because the European Commission also wants to raise 20 billion euros for the energy turnaround by selling additional certificates. This could further depress ETS prices.
Missing CO2 reduction argued with low carbon price
For the European steel manufacturers, who had recently been vigorously advertising how much they are doing (or not doing) for the green transformation, the news is likely to come at an inopportune time. After all, it is only the rising carbon price that has provided any incentive at all for investment on the part of EU steelmakers, who had previously repeatedly pointed out that they would not make any investments until prices climbed above a certain level. Or the EU would pay them the gap between the actual price and the desired price.
Are steel producers now stopping green projects?
There are likely to be the first calls from steel producers for further subsidies if the EU carbon price falls further and settles at a lower level, and this could well lead to subliminal threats to postpone investments in green technologies.
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