Steel Market 01 / 2020

Italy and Southern Europe
Special
crucial for incentivising R/D and softening
the pain of the transition. For
the Ex-Ilva plant, Taranto qualifies for
aid from the upcoming European Just
Transition Fund. Beyond that, it remains
to be seen if governments and
the EU will live up to the ambitious
goals of the European Green Deal.
Finally, companies facing these kinds
of challenges cannot afford to ignore
socio-political sustainability. Every time
massive layoffs take place; this adds
fuel to the fire of populism. The counterpart
is the slow but steady erosion
of Europe’s technocratic centre; politicians
that are more likely to favour
level-headed long-term policies. To go
back to the Taranto example, investor
protection would not have suffered so
brutally if the 5SM was not in office,
and this is the direct result of stagnant
living conditions for workers. Of course,
firms must make adjustments in difficult
times. However, failing to factor in
the welfare of workers will eventually
result in a political backlash, and this
backlash has a very tangible impact on
the bottom line. This part of the conversation
is not exclusive to the steel
industry; it concerns the business community
as a whole.
I do not mean to underestimate
the hardships of these sustainability
challenges. I think they are surmountable,
but it will involve compromises,
risk-taking and goodwill from all parties
concerned.
Copyright: ArcelorMittal
What do you think are the biggest
challenges for the industry?
Carias: In the long run, the biggest
challenge is to adapt to these structural
trends in a demanding environment
that will remain less than ideal.
Even in the best scenario, the growth
in demand will be slower than the
reduction of overcapacity, which makes
it difficult for companies to make the
risky investments needed to adapt to
the sustainability imperatives I highlighted
before. In the commercial
sphere, it will also be important to
diversify the clientele by getting a foot-
hold in emerging markets with good
The Spanish situation is less worrying. The picture shows the Spanish plant
of ArcelorMittal.
medium-term growth prospects. On dition, but construction is starting to
the short term, we will have to deal slow down noticeably. The extent of
with the nasty surprise of the coronavirus
outbreak. Some weeks ago, it couple of months, but Fiat-Chrysler
the damage won’t be knowable for a
looked like a rebound in Germany, has already signalled that it’s looking
and the easing of trade tensions to close one of its European plants in
would give the manufacturing industry
a chance to catch its breath. But in Wuhan. We should note that this
response to supply-chain disruptions
Italy just had its worst monthly industrial
production numbers in two years but will be of a magnitude and it comes
will be a one-off, temporary setback,
December (-3.8 year on year), and this in a very bad moment.
is before the virus started making waves. Things have changed a lot since 2003,
Spain is in a much better cyclical con-
but it can be useful to (prudently) use
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