EN Official Journal of the European Union CE 84/929

(2004/C 84 E/1027)

WRITTEN QUESTION E-1020/04

by Cristiana Muscardini (UEN) to the Commission

(5 April 2004)

Subject: Emergency on the ferrous metals market

The alarming rise in the prices of ferrous metals in the last year and the price explosion in 2004 are affecting a large proportion of businesses (craft industries and SMEs) in northern Italy. There have been record increases in the prices of steel, copper, aluminium and nickel, ranging from 22 % for nickel to 100 % for steel. Suppliers guarantee price quotations for only a few days, or sometimes even only 24 hours. The situation is aggravated by the shortage of raw materials, and production is minimal compared with demand. The greatest threats come from the Chinese, Indian and Russian markets, whose imports of ferrous metals doubled or — in the case of China — trebled between 1999 and 2003. The prospects are far from reassuring, since demand is set to increase in the coming years. At the same time China is drastically reducing the export of coke needed to fuel foundries. The emergency is in particular adversely affecting machine shops, wire-drawing, small metal products, turning shops, carpenters, electricians and plumbers.

Can the Commission say:

— whether it has assessed the consequences of this emergency and the grave difficulties it is causing and will continue to cause on the market, with incalculable threats to employment and the European economy, specifically in northern Italy;

— whether, in order to avoid these undesirable consequences, it considers that the expediency of quota restrictions should be assessed;

— what other steps it might propose to avoid the worst and prevent the closure of many small businesses?

Reply by Mr Liikanen on behalf of the Commission

(23 April 2004)

The Commission keeps a close eye on developments in the world markets for steel, non-ferrous metals and the raw materials needed for their production, and on the impact that the growing demand for these products in Asia has on the markets and prices for these products in the countries of the European Union. The steel and metals industries are particularly affected at present by the parallel increases in the prices of all the raw materials they need, including in particular scrap, coke and ferro alloys.

The Community is a major producer of steel and metals, and at times like these, with rocketing world demand and prices, all operators need to be careful about the scale of their purchases and stocks so as to minimise the impact of their increasing financial exposure on the activities of their businesses. The metal industry and all its downstream production and distribution operators alike are faced with this necessity, but, of these, it is the small businesses that see their capacity for negotiation weakened compared with the major customers. It would seem, therefore, that the Community market is not so much faced with a problem of raw-materials supply as with considerable price pressure.

If this situation were to continue, small businesses that use metals would indeed be at risk. Over the last few weeks, however, there has been a significant slackening in demand from Asia, which has an immediate impact on world price levels. Even if we cannot draw any conclusions at this stage, this is an encouraging sign.

The Commission can assure the Honourable Member that it will continue to keep a close eye on developments in the metals market and use any means at its disposal to react to any imbalances that are likely to lead to a genuine shortage.