Steel industry: Scholz wants to help the ailing steel industry – but how?

Global overcapacity, dumping prices especially from the Far East, high energy costs, difficult “green” transformation: the steel industry is in difficult times. “The year 2025 will decide the fate of the German steel industry,” said the general works council of Germany’s largest steel manufacturer Thyssenkrupp Steel.

Chancellor Olaf Scholz (SPD) pledged support for the industry after a steel summit in Berlin. But he is in a weak position; after the failure of the traffic light coalition, the red-green federal government no longer has a majority in the Bundestag.

Steel industry in crisis

After a meeting with industry representatives, works councils and unions in the Chancellery, Scholz emphasized the importance of the steel industry. “The steel produced here is of the highest geostrategic importance for industrial production in Germany and therefore for our economic growth.”

Germany is the largest steel producer in the EU. According to the industry, the most important customers are the construction industry, the automotive industry and mechanical engineering. According to the Federal Statistical Office, around 71,000 people were employed in the industry at the end of September.

But companies are in a difficult situation. Thyssenkrupp Steel announced in November that the number of jobs in the steel sector would shrink by 11,000 to 16,000 within six years. Employee representatives and IG Metall are threatening long-term resistance.

The union is also defending itself against a possible takeover of the Salzgitter steel group by the companies GP Günter Papenburg and TSR Recycling. IG Metall fears significant impacts on employment if Salzgitter loses its independence.

Scholz is looking for solutions

As expected, there were no concrete results at the steel summit. Scholz confirmed plans by the red-green federal government to reduce network fees and thus relieve energy-intensive companies of their electricity costs. But for this he needs support from the opposition.

The Union has already rejected plans. Scholz also did not rule out a state stake in Thyssenkrupp Steel. He told the Funke media group: “I’m not taking any option off the table now.”

At the EU level, Scholz is committed to a timely European steel summit, as government spokesman Steffen Hebestreit announced. Important relief instruments for the steel industry must remain in place or be improved. The Commission must act decisively when it comes to distortions of competition caused by dumping and subsidies. The EU authority must examine further trade policy protection measures. However, quick results cannot be expected at EU level.

Steel industry expects relief

“The steel industry in Germany is acutely threatened by unfair competition on the world markets,” said Gunnar Groebler, President of the Steel Association. “Therefore, effective foreign trade protection is urgently needed in order to put a European stop to state-subsidized exports from third countries.” It is high time for a European steel summit at which appropriate measures are clearly and bindingly initiated.

Jürgen Kerner, second chairman of IG Metall, said that the federal government’s planned cap on electricity network fees at three cents should not be implemented until the next government. “We now need an internationally competitive electricity price.”

Tekin Nasikkol, chairman of the general works council of Thyssenkrupp Steel Europe AG, called for targeted industrial policy measures to be put on the agenda immediately and implemented. “Otherwise we will lose more and more competition in our key industries and thus our future.”

The steel industry is one of the largest CO2 emitters. The federal government is funding the “green” restructuring with billions. The steel industry relies on large amounts of hydrogen for this. However, there is a risk of delays when setting up a supply network. Thyssenkrupp boss Miguel López had called for a faster development of a hydrogen pipeline network in Europe.

Union speaks of a “show summit”

The economic policy spokeswoman for the CDU/CSU parliamentary group, Julia Klöckner, spoke of a “show summit” in the Chancellery. “The Restampel no longer has a majority and can no longer implement anything on its own.”

The left-wing economic politician Jörg Cezanne said that the traffic light had failed in two key points. No industrial electricity price has been implemented and no provision has been made to increase network fees through loans: “Many electric steel stoves are now in acute danger of going bankrupt due to this cost explosion.”