Unfair Competition and Policy Challenges Lead to Deindustrialization Crisis in Europe

Europe’s stainless steel industry is facing a severe crisis due to high raw material costs and intense competition from Asian producers. Timoteo di Maulo, CEO of Aperam, warned that Europe could face collapse without a level playing field, as European producers rely on costlier, environmentally friendly processes while Asian competitors use cheaper nickel pig iron (NPI).

Demand for stainless steel in Europe is projected to decline by 6% in 2024, compounding earlier decreases in 2022 and 2023. The disparity in production methods is widening, with Indian and Chinese firms benefiting from lower costs due to less stringent scrap requirements. Di Maulo highlighted that EU decarbonization policies place additional financial burdens on European steelmakers, making them less competitive.

The upcoming European Carbon Border Adjustment Mechanism (CBAM), set to begin in 2026, is seen as a potential catalyst for further deindustrialization. Industry leaders argue that CBAM, intended as a tax but functioning more like a green policy tool, could hinder raw material imports while encouraging the import of finished products. Executives, including Acerinox’s CEO, called for practical solutions to address the flawed implementation of CBAM across Europe’s diverse tax systems.