„India and China are not the Problems“

„India and China are not the Problems“ / Picture: © Voestalpine AG

According to Eder, the European steel industry suffers from overcapacities. The production capacity would reach about 210 million tons per year. This was the demand volume in 2007. However, the current demand would only amount to € 160m. Within the next ten years, the peak level will not be reached again, he thinks. „There is an overcapacity of 20% at least. This causes relatively low prices.“ Eder says.

In the long term, the major rivals oft he European steel industry will not be Chinese or Indian competitors. The main problems will be Russian, Turkish and Ukrainian steel producers. At the moment, China exports 8 million tons of steel to Europe per year. However, transport costs come at € 50 per ton.

In 15 to 20 years, there are no commodity steel suppliers in Europe anymore, Eder considers. The competitiveness is shrinking, the executive says. However, voestalpine could develop new products in the last years. About two thirds of voestalpine´s revenues are made up of processed, high-quality goods, Eder states. „Our steel production only generates 33% of our sales. Here, we supply premium customers like the German automotive industry.“ Eder explains. Five years ago, voestalpine´s plan was to build a new major steelworks at the Black Sea coast in Romania. The project´s volume was about € 7.0bn. Right before the financial crisis started, voestalpine knocked this plan on the head.