Is the EU stainless steel alloy surcharge still legally legitimate?

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Is the EU stainless steel alloy surcharge still legally legitimate?

November 9, 2022 – Has the European stainless steel alloy surcharge run its course and finally lost its legitimacy? A closer examination of reports from stainless steel producer Aperam raises justified doubts as to the legitimacy of the alloy surcharge. Prices for scrap stainless steel are rising in Europe, sometimes significantly. And hydrogen producers are already calling for the first market protection measures.

Europe: Is the surcharge on stainless steel alloys illegal?

The alloy surcharge for stainless steel has already been reviewed several times by competition authorities. And various competition and antitrust procedures have already been carried out in the European Union.

Stainless steel is mainly produced from scrap metal

For some time, the Aperam group has indicated in its financial reports and its ESG reports that the group would produce its stainless steel mainly from scrap or stainless steel scrap. According to the group, the share of scrap will have reached 90% by 2021.

“Our nickel needs are mainly covered by stainless steel scrap…”

Source: Aperam, interim financial report, June 30, 2022

“That’s because stainless steel is durable and infinitely recyclable. For example, we distinguish ourselves by the fact that our European production processes use around 90% scrap metal.

Source: Tim Di Maulo, CEO of Aperam Group, ESG, July 2021

“Aperam has a leading CO2 footprint in the stainless steel industry thanks to its European production chain based on fully recyclable stainless steel scrap…”

Source: Aperam, interim financial report, June 30, 2022

Alloy supplement still legit?

The question must be asked: with what legitimacy does Aperam still levy an alloy surcharge on stainless steel if hardly any raw materials, if any, but almost exclusively scrap metal is used in the European production route?

Europe: Prices and Demand for Stainless Steel Scrap Rise

The demand for stainless steel scrap has currently increased considerably, especially in France and Italy. France even reports a major shortage of stainless steel scrap and, around 200 dollars per ton, a sharp rise in the price of the primary raw material used by European stainless steel producers.

Hydrogen: European producers call for market protection

As soon as a new product catches the attention of manufacturers, new market protection measures are called for, especially in Europe. A “level playing field” is needed to protect European green hydrogen production from imports from other EU countries.

Level playing field for whom?

It looks like a travesty when you look at European efforts to set up so-called green hydrogen production in third countries.

Resistance to the US Inflation Reduction Act

Secretly, European hydrogen producers are probably hoping for support similar to what their American colleagues will receive via the American Inflation Reduction Act. While Europeans will only be protected from imports of non-green hydrogen by the Carbon Border Tax CBAM.

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