* EU Commission to produce action plan by June
* Energy, labour cost, climate change challenges
* European steel demand seen dropping further in 2013
* ArcelorMittal says cannot delay restructuring
By Philip Blenkinsop
BRUSSELS, Feb 12 EU ministers and the European
Commission urged ArcelorMittal on Tuesday to postpone
planned capacity cuts until they firm up proposals to
reinvigorate Europe's steel sector.
Industry Commissioner Antonio Tajani said the world's
largest steelmaker should delay restructuring in Europe until
the Commission produced an action plan by June.
His appeal, after a roundtable with 13 EU ministers, union
members and industry chiefs, was echoed by French Industry
Minister Arnaud Montebourg and counterparts from Belgium and
ArcelorMittal plans to close all but a few specialised lines
at its plant in Liege, Belgium, and has idled two blast furnaces
at Florange in France. It has also extended indefinitely the
closure of its electric arc furnace in Schifflange, Luxembourg.
The company, with 98,000 workers in Europe said it could not
delay its plans, given substantially reduced European demand.
"Failing to take action in response to this will only serve
to weaken the company in Europe, thereby threatening the
viability of other plants," it said.
The roundtable panel agreed on a range of recommendations
covering trade, raw materials, climate change and energy policy
to revive European steel, which employs 360,000 people in the
Steel consumption in austerity-hit Europe fell by 9.7
percent last year, according to Eurofer, the European steel
The demand, including inventory adjustments, is seen down
0.7 percent this year before a 3.0 percent rise in 2014.
Even then, the 146 million tonnes of steel consumed would be
27 percent below the pre-crisis peak level of 2007.
ENERGY, EMISSIONS CHALLENGE
Demand beyond Europe in emerging economies is stronger, but
the European industry has argued it is being driven out of the
European Union by excessive regulation and rising costs.
It faces higher energy costs than the United States where
shale gas has provided abundant cheap energy and says the
European Union's environmental ambitions risk simply driving
The EU aims to reduce carbon emissions by 20 percent
relative to 1990 levels by 2020 and push for far deeper cuts by
mid-century, a more ambitious agenda than other countries or
"If companies move beyond the EU's borders there is a
problem for workers and also for the fight against climate
change," Tajani told a news conference.
However, Commission colleague Connie Hedegaard, responsible
for climate action, said complying with EU carbon emission
policy was a minimal cost for industry, with some actually
earning millions of euros from trading allowances.
Wolfgang Eder, who heads Austria's Voestalpine and
Eurofer, said European producers were struggling with gas prices
four times higher than in the United States and electricity some
40 percent more, along with higher labour costs and stricter
"If the cost structure is not radically corrected down in
the next five years, then I see there being 50 percent less
production here by 2030," he said.
Producers in Russia, Ukraine and Turkey were putting
pressure on EU counterparts, particularly for more mass-produced
Eder said the EU discussions would not lessen the outside
threat, but showed there was agreement on an agenda and the
desire to find solutions before the summer.
(Editing by William Hardy)