Steel Strip World: German industry joins forces to attack steelmakers

Germany's biggest steel consumers banded together on Wednesday to send a warning to producers that high prices are driving a dangerous wedge between them.

"In the past, the partner-like relationship between our members and the steel industry was an element of our mutual success," a group of seven German industry associations said in a joint statement.

"This partnership is now being put to the test -- with incalculable risks for the health of the entire German industry."

The associations -- including the influential lobbies for the German automotive, engineering, electronics and construction industries -- attacked steelmakers for campaigning to erect trade barriers in Europe against Asian rivals.

"Anti-dumping tariffs for flat steel products cannot be justified by the facts," they said in an appeal directed both at the European Commission and the German government.

Brussels is currently investigating wire rod from China, Turkey and Moldova, hot-dipped steel from China, cold-rolled stainless steel products from China, South Korea and Taiwan and certain seamless pipes and tubes of iron or steel from China.

The German steel industry said in a statement it only sought tariffs to restore fair trade and not to wall off competition.

The seven industry associations acknowledged that part of the upward pressure on steel prices stemmed from rising costs for key raw materials like iron ore and coking coal that result from an oligopoly in the mining industry.

I have been of the opinion for some time that the European steelmakers taking advantage of steel demand in India and China to increase prices generally is putting at risk the health of their domestic market. We have seen an acceleration in the closure of steel manufacturing businesses in the UK, which does not seem to be slowing. With steel prices doubling during this year and banks reluctant to extend lending facilities, many companies are finding it very difficult to fund working stocks.