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ThyssenKrupp Steel
Prof. Dr.-Ing. Dieter AmelingSenior Counselor ThyssenKrupp Steel
former President German Steel Federationformer Chairman Steel Institute VDEh
European Steel in a Globalized MarketEuropean Steel in a Globalized Market
ABM’s 63rd Annual Congress
July 28 – August 1, 2008Santos – SP - Brazil
ThyssenKrupp Steel
European Steel in a Globalized MarketEuropean Steel in a Globalized Market
Steel in a globalized environment
Raw materials – short and expensive
European steel industry – sustainable, innovative and competitive
Steel and the energy and climate policy of the EU
EUROFER‘s proposal to reduce the steel industries CO2-emissions worldwide
ThyssenKrupp Steel
Stahl-Zentrum
Explosion of World Crude Steel Production and Continuous CastingExplosion of World Crude Steel Production and Continuous Casting
11.07.2008
ThyssenKrupp Steel
Stahl-Zentrum 11.07.2008
The European Union – 27 Member StatesThe European Union – 27 Member States
ThyssenKrupp Steel
Stahl-Zentrum 11.07.2008
The Ranking of Gross Domestic Product (GDP) by Actual Prices 2006The Ranking of Gross Domestic Product (GDP) by Actual Prices 2006
ThyssenKrupp Steel
11.07.2008
EU 27: No. 2 in World Crude Steel ProductionEU 27: No. 2 in World Crude Steel Production
ThyssenKrupp Steel
The Top 10 Steel Producers in the EU 27, 2007The Top 10 Steel Producers in the EU 27, 2007
11.07.2008
ThyssenKrupp Steel
Stahl-Zentrum, 11.07.2008
World Trade in SteelWorld Trade in Steel
Excludes internal trade within the EU 25 Source: ISSB
ThyssenKrupp Steel
Stahl-Zentrum, 11.07.2008Source: ISSB
Main Regional Steel Trade Flows (2007)Main Regional Steel Trade Flows (2007)
China No. 1 Steel ExporterEU 27 No. 1 Steel Importer
ThyssenKrupp Steel
Stahl-Zentrum 11.07.2008
China: Imports and Exports
China: Imports and Exports
Steel Mill Products
up to May 2008and forecast 2008
ThyssenKrupp Steel
Stahl-Zentrum, 11.07.2008
Total export volume : 68,3 Mill. t
Asia total: 52,7 %
EU 27: Chinas Export Target No. 1 outside Asia in 2007EU 27: Chinas Export Target No. 1 outside Asia in 2007
Source: Trade Statistic German Steel Federation
ThyssenKrupp Steel
Stahl-Zentrum, 11.07.2008
178
1.753
750
0
500
1.000
1.500
2.000
2005 2006 2007
Actual Antidumping Complaints of EUROFERNo. 1 against EU 27 hot dipped coated sheet imports from China
and No. 2 EU 27 stainless cold rolled sheet imports from China, Korea, TaiwanNo. 3 EU 27 wire rod imports from China and Turkey
Source: official EU trade statistic (Eurostat) with own calculations
Str 28Mrch08
ThyssenKrupp Steel
Stahl-Zentrum 11.07.2008
Fiscal development aid
Preferential Loans
and Direct Credit
Governmental regulation
of production andexternal trade
Support of
individual companies
Free or cheapened
electric power supply
Land grantsGovernmental support of
developments
of raw material sources
Disregarding of environmental
and occupational safety standards
Subsidized
freight rates
The Influence of the Chinese Government on the IndustryThe Influence of the Chinese Government on the Industry
ThyssenKrupp Steel
Stahl-Zentrum 11.07.2008
Blast Furnace in ChinaBlast Furnace in China
Source: GEO 11/2007
ThyssenKrupp Steel
Stahl-Zentrum 11.07.2008Source: GEO 11/2007
Coking Plant in ChinaCoking Plant in China
ThyssenKrupp Steel
European Steel in a Globalized MarketEuropean Steel in a Globalized Market
Steel in a globalized environment
Raw materials – short and expensive
European steel industry – sustainable, innovative and competitive
Steel and the energy and climate policy of the EU
EUROFER‘s proposal to reduce the steel industries CO2-emissions worldwide
ThyssenKrupp Steel
11.07.2008
Price Development of Iron Ore and CoalPrice Development of Iron Ore and Coal
ThyssenKrupp Steel
11.07.2008
Overseas Iron Ore Exportsof the 10 Largest Exporting Companies in 2006
Overseas Iron Ore Exportsof the 10 Largest Exporting Companies in 2006
ThyssenKrupp Steel
Stahl-Zentrum 11.07.2008
a. Worldwide turnover of all joining companies with more than 5 Billion EUR and
Rio Tinto: 22 Billion $ (2006), BHP: 39 Billion $ (2007)
b. turnover in the EU of at least two joining companies withmore than 250 Million EUR each and
Rio Tinto: 3,9 Billion $ (2006), BHP: 11 Billion $ (2007)
c. the joining companies shouldn‘t have a share of more than 2/3 of their turnover within the same member state. ()
We require an intervention of Brussels to stop the mergerof BHP and Rio Tinto!
Conditions for the Application of the EC Merger RegulationConditions for the Application of the EC Merger Regulation
ThyssenKrupp Steel
11.07.2008
Prices for Hot Metal, DRI and Scrap again on a Record HighPrices for Hot Metal, DRI and Scrap again on a Record High
ThyssenKrupp Steel
European Steel in a Globalized MarketEuropean Steel in a Globalized Market
Steel in a globalized environment
Raw materials – short and expensive
European steel industry – sustainable, innovative and competitive
Steel and the energy and climate policy of the EU
EUROFER‘s proposal to reduce the steel industries CO2-emissions worldwide
ThyssenKrupp Steel
Stahl-Zentrum 11.07.2008
ThyssenKrupp Steel
Stahl-Zentrum 11.07.2008
Indicators ofSustainable
Steel
Indicators ofSustainable
Steel
ThyssenKrupp Steel
Stahl-Zentrum 11.07.2008
Reducing Agents Consumption of Blast Furnacesin the World, 2006
Reducing Agents Consumption of Blast Furnacesin the World, 2006
ThyssenKrupp Steel
Stahl-Zentrum 11.07.2008
Energy Efficiencyand
CO2-Emissionsof the
German Steel Industry
Energy Efficiencyand
CO2-Emissionsof the
German Steel Industry
ThyssenKrupp Steel
Stahl-Zentrum 11.07.2008
Innovations for the FutureInnovations for the Future
ThyssenKrupp Steel
Stahl-Zentrum 11.07.2008
Climate Change – Steel is the best ChoiceSteel – driver of innovations to increase efficiency of resources
Climate Change – Steel is the best ChoiceSteel – driver of innovations to increase efficiency of resources
ThyssenKrupp Steel
Stahl-Zentrum 11.07.2008
Climate Change – Steel is the best ChoiceSteel – driver of innovations to increase efficiency of resources
Climate Change – Steel is the best ChoiceSteel – driver of innovations to increase efficiency of resources
ThyssenKrupp Steel
European Steel in a Globalized MarketEuropean Steel in a Globalized Market
Steel in a globalized environment
Raw materials – short and expensive
European steel industry – sustainable, innovative and competitive
Steel and the energy and climate policy of the EU
EUROFER‘s proposal to reduce the steel industries CO2-emissions worldwide
ThyssenKrupp Steel
Stahl-Zentrum 30.01.2008
The plan calls for a:
„These targets are very ambitious: today 8.5% of energy is renewable. To achieve a 20% share by 2020 will require major efforts across all sectors of the economy and by all Member States.“
2005 is the new basis for all calculations within the framework of this package.
20% increase in energy efficiency20% reduction in greenhouse gas (GHG) emissions20% share of renewables in overall EU energy consumption by 202010% biofuel component in vehicle fuel by 2020
Renewable Energy and Climate Change Packageof the European Commission of 23.01.08:
Renewable Energy and Climate Change Packageof the European Commission of 23.01.08:
ThyssenKrupp Steel
11.07.2008
GHG Target:
-20% compared to 1990
-14% compared to 2005
EU ETS-21% compared
to 2005
Non ETS sectors -10% compared to 2005
27 Member State targets, stretching from -20% to +20%
Source: European Commission, DG Environment
ThyssenKrupp Steel
Stahl-Zentrum 11.07.2008
The Energy and Climate Package drastically Reducesthe Crude Steel Production within the EU
1. -21 % CO2 reduction from 2005 to 2020
2. Specific CO2-emissions could decrease from 1.7 to 1.56 t CO2/t steel
3. Compared to expected steel production in 2020 of 236 Mt this would only allow a reduced steel production of 168.3 Mt
= -67.7 Mt = -28.7 % Steel
ThyssenKrupp Steel
Stahl-Zentrum 11.07.2008
For the energy-intensive industries sufficient allowances are indispensable to prevent relocation to outside Europe:
1. The needed certificates have to be allocated free of charge. The foreseen auctioning would lead to a massive loss in international competitiveness.
2. A general sectoral CO2 reduction target of 21 % cannot be fulfilled by the steel industry. The energy-intensive industries are characterised by process related emissions. Today, they are working at the
minimum level.
3. Further electricity price increases through auctioning obligation for power producers cannot be borne in the international competition.
4. Industry needs investment certainty. Clear decisions must be made. Otherwise investments would be stopped, which would result in a lack of competitiveness as well.
The Energy and Climate Package of the European Commissionof 23.01.08 Drives the Industry Away
The Energy and Climate Package of the European Commissionof 23.01.08 Drives the Industry Away
ThyssenKrupp Steel
Stahl-Zentrum 11.07.2008
The Global Energy Related CO2 Emissions are further IncreasingThe Measures of EU 27 without any realistic Effect
The Global Energy Related CO2 Emissions are further IncreasingThe Measures of EU 27 without any realistic Effect
ThyssenKrupp Steel
Stahl-Zentrum 11.07.2008
CO2 Emissions Trading in the European Union –Does it make Sense?
CO2 Emissions Trading in the European Union –Does it make Sense?
ThyssenKrupp Steel
European Steel in a Globalized MarketEuropean Steel in a Globalized Market
Steel in a globalized environment
Raw materials – short and expensive
European steel industry – sustainable, innovative and competitive
Steel and the energy and climate policy of the EU
EUROFER‘s proposal to reduce the steel industries CO2-emissions worldwide
ThyssenKrupp Steel
Stahl-Zentrum 11.07.2008
Disadvantages of the Existing Emissions Trading SystemDisadvantages of the Existing Emissions Trading System
Absolute caps are equivalent to caps on production and lead to relocations to outside the EU.
The reduction targets are set „top down“ and are not consistent with technological reduction potentials.
Because the emissions trading directive does only refer to direct emissions the reduction potentials of the steel industry are not addressed adequately.
The pricing-in of allowances which were allocated free of charge as well as auctioning lead to inadequate increases of electricity prices.
ThyssenKrupp Steel
Stahl-Zentrum 11.07.2008
Main Characteristics of the Baseline and Credit SystemMain Characteristics of the Baseline and Credit System
An ETS tailor-made for the steel industry.
• Emissions are determined in an integrated way taking into consideration all stages of production. Inputs like coke or electricity or credits resulting from using by-products do also count.
• The average amount of European emissions serves as a basis for the allocation of allowances.
The scheme brings about continuous improvement in terms of efficiency: The average amount of European emissions serving as a reference for allocation, incentives for emission cuts are created what directly impacts on the average emissions amount ("moving target").
Ex-post-allocation taking account of the production quantity instead of absolute emissions ceilings.
ThyssenKrupp Steel
Stahl-Zentrum 11.07.2008
Facts about the Emissions Trading System for SteelFacts about the Emissions Trading System for Steel
ThyssenKrupp Steel
Stahl-Zentrum 11.07.2008
Advantages of the Baseline and Credit SystemAdvantages of the Baseline and Credit System
Existing technological reduction potentials, but also the limits concerning process emissions are regarded.
The system results in continuing efficiency improvements because the orientation to the emission average gives incentives to reduce emissions. This influences the emission baseline („moving target“).
Production growth is not constrained. The baseline and credit emissions trading system targets only at efficiency.
No incentives for relocations of production to outside the EU.
The system is more attractive for states outside the EU and their steel industry.
ThyssenKrupp Steel
Stahl-Zentrum 11.07.2008
European Steel in a Globalized MarketSummary
European Steel in a Globalized MarketSummary
The world steel production continuous to grow.
EU 27: No. 2 in world crude steel production
China became the No. 1 steel exporter in 2007.
Raw materials remain short and expensive.
European steel industry – sustainable, innovative and competitive
The Energy and climate package of the European Commission of 23.01.08 drives the industry out of Europe.
The only solution is a sectoral approach.
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