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(2004/C 84 E/0785)

WRITTEN QUESTION P-0949/04

by Raffaele Costa (PPE-DE) to the Commission

(22 March 2004)

Subject:   Difficulties for the Italian steel industry

A increasing number of Italian operators in the steel industry have complained of an adverse trend in production. This alarming situation has many causes: firstly raw materials (hematite cast iron, nodular cast iron, iron and steel scrap, coke, etc.) are increasingly expensive, in particular following the restrictions on exports introduced by the Chinese Government and the massive consumption of these materials by China and other Asian countries (one third of the world's steel production is absorbed by China). Many employees also complain of problems caused by the fact that Italian legislation classifies scrap metal as waste. These and other factors have led to exponential increases in the cost of raw materials for foundries over the last twelve months, as much as between 45 and 70 % for scrap metal and 60 and 100 % for ferroalloys (molybdenum, nickel and vanadium). The situation seems unsustainable and may result in serious crises in manufacturing and employment even in the short term.

Can the Commission say what urgent measures will be taken to tackle these problems and whether it does not intend to try to persuade the Beijing government to agree to trade arrangements that are less unfavourable for Community firms in the sector?

Answer given by Mr Liikanen on behalf of the Commission

(15 April 2004)

The Commission is closely monitoring developments on the world market for raw materials, particularly the impact of increasing demand from Asia on the market and on the prices of these products in EU countries. The steel industry is one of the industrial sectors most affected at the moment because of the simultaneous increase in the prices of all the raw materials it needs, in particular scrap, coke and ferroalloys.

The Commission shares the Honourable Member's view that some of the difficulties the Italian steel industry is currently facing could be linked to the spectacular industrial development in China and its increasing demand for raw materials, which has led to tensions on the market and a sharp increase in world prices.

For this reason the Commission has contacted the Chinese authorities in order to examine possible solutions to problems directly linked to trade measures adopted by the Chinese Government, in particular export licences for coke. China is the main world exporter of this raw material, but because of increasing demand from the domestic market it has recently tried to limit its exports by adopting restrictive trade measures. The Commission has approached the Chinese authorities concerning the compatibility of such measures with the World Trade Organisation (WTO) rules.

The problem of scrap is different. The EU is a major producer and exporter of scrap and is not experiencing any difficulties with supply. However, in the present situation of rapidly increasing world prices, speculative behaviour may appear at all levels of the collection and distribution chain of this raw material and is likely to magnify any minor market imbalances. Italy has a structural deficit in scrap, so as the market situation changes it suffers more immediatley and directly than most of its EU partners.

The classification of scrap as waste derives from Community legislation aimed at regulating recycling in accordance with environmental principles. It is the responsibility of the national and local authorities to implement this legislation in accordance with the provisions in the framework Directive on waste management (1).

The Commission would assure the Honourable Member of its continuing commitment to closely monitor developments on the raw materials market, using all the means available to it to make sure that world trade in these products develops in accordance with the rules on open and fair competition.

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(1)  Council Directive 75/442/EEC of 15 July 1975 on waste, OJ L 194 of 25.7.1975.

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