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China's Steel Industry: A Consolidation Wave
Date:2024-09-24 17:46:17View:59Tags:Ronsco,Nickel Alloy Supplier

The steel industry in China is undergoing a period of consolidation, with smaller and less profitable steelmakers being strategically acquired. This trend raises the question of whether Europe might follow suit. Meanwhile, India has notified the WTO of its intention to implement countermeasures against the EU's Safeguard Measure on specific steel products.

 

Accelerating Consolidation in China's Steel Sector
The Chinese steel sector is rapidly entering a phase characterized by consolidation and increased concentration. As some manufacturers face financial challenges and the government refrains from intervention, analysts anticipate a wave of mergers and acquisitions in the near future.

 

Chinese Government's Support for Industry Consolidation
Reports suggest that China's government is intent on consolidating the steel industry under a handful of large conglomerates. This move aims to introduce greater structure, transformation, and competitiveness. Recently, the government has halted all new expansion projects in the sector.

 

Should these plans come to fruition, critics in the EU may find their arguments against Chinese steel less tenable. It begs the question: Is consolidation also a viable strategy for Europe, a region grappling with significant steel overcapacity?

 

Germany: The Era of Energy-Intensive Producers Draws to a Close?
In this context, leading German economist and President of the German Institute for Economic Research, Prof Marcel Fratzscher, predicts that certain energy-intensive industries will vanish from Germany by the time the energy transition is complete. He posits that this could be beneficial, allowing companies to preserve their innovation and skilled workforce in Germany, ensuring their competitiveness.

Energy-intensive sectors such as steel and aluminium manufacturing have long lamented high domestic energy costs. However, German steel producers have overlooked the fact that they achieved a turnover increase of over 45% per tonne of rolled steel in both 2022 and 2023.

 

EU Safeguard Measures: India Considers Retaliatory Actions
Media reports indicate that the Indian government has informed the WTO of its plan to implement countermeasures against the EU's Safeguard Measure on certain steel products. This follows another unsuccessful round of bilateral negotiations with the EU for an exemption for India. India has consistently failed to secure such exemptions in past negotiations with the EU.

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