Steelmaking has always held an outsize position as a symbol of economic power and prestige. It constitutes the fabric of modern life, used not only for buildings, roads, cars, refrigerators, electronics, forks and screws but also for weaponry, tanks and fighter jets.Over the past decade, a flood of cheap steel from China has transformed the global market. The country's mammoth collection of mills-built in part with government support and often lacking the environmental controls mandated in Europe-make more steel, as well as aluminium, than the rest of the world combined. As China's economy has slowed, more of these metals have been exported at cutthroat prices.The result is sinking prices, shrinking profits and unemployed workers. Measured by the kilogram, steel costs less than bottled water. Smaller revenues also mean less money to invest in new low-carbon technologies, which are essential to meeting the European Union's climate goals, the Organization for Economic Cooperation and Development warned in May.The European Union imposes trade penalties intended to stop China from dumping its cheap steel on its markets. But Chinese steel keeps coming, prompting countries that were not traditionally steel exporters, like South Korea and Japan, to join the hunt for buyers elsewhere.And now, aside from high energy and labour costs, aging technology and fierce competition from China, European steelmakers must also contend with punishing American tariffs. President Donald Trump imposed 50% tariffs on nearly all steel and aluminium imports last month.Britain is in a better position than most. Trump exempted British steel from the additional 25% tariff on steel and aluminium and has agreed to remove the remaining 25% tariff in the future.Still, Britain's aging plants are having trouble surviving.This spring, the government took over the British Steel complex in Scunthorpe, an industrial town in northern England. Last year, the government also helped bail out Tata Steel, which runs a large mill at Port Talbot in Wales, with a 500 million pound grant to transition to a greener electric arc furnace that melts recycled steel.
In the Netherlands, Tata Steel's plant in IJmuiden is in better shape. The site, which is the size of 1,100 soccer fields and sits next to a public beach, is one of the country's largest industrial employers. The plant is the second largest in Europe.
At the moment, steel made with green hydrogen in electric arc furnaces and other greener production methods spew far less emissions but cost 30% to 60% more than conventional production, according to various estimates.And then there are the tariffs. Tata said in a statement that 12% of its sales were "US related" and that it passed on most of the 25% tariff that went into effect in March to its American customers, which include Ford Motor, Chrysler, Caterpillar and Duracell.But, the company added, it worries that with 50% tariffs "our steel may become too expensive."
