Germany’s biggest steel consumers have banded together to send a warning to producers that high prices are driving a dangerous wedge between them.
“In the past, the partner-like relationship between our members and the steel industry was an element of our mutual success,” a group of seven German industry associations said in a joint statement.
“This partnership is now being put to the test — with incalculable risks for the health of the entire German industry.”
The associations — including the influential lobbies for the German automotive, engineering, electronics and construction industries — attacked steelmakers for campaigning to erect trade barriers in Europe against Asian rivals.
“Anti-dumping tariffs for flat steel products cannot be justified by the facts,” they said in an appeal directed both at the European Commission and the German government.
Brussels is currently investigating wire rod from China, Turkey and Moldova, hot-dipped steel from China, cold-rolled stainless steel products from China, South Korea and Taiwan and certain seamless pipes and tubes of iron or steel from China.
The German steel industry said in a statement it only sought tariffs to restore fair trade and not to wall off competition.
The seven industry associations acknowledged that part of the upward pressure on steel prices stemmed from rising costs for key raw materials like iron ore and coking coal that result from an oligopoly in the mining industry.
They called on the European Commission to block BHP Billiton’s $170 billion unsolicited bid for rival miner Rio Tinto.
The associations added: “Nevertheless, the current steel price hikes can no longer be explained by the increase in raw material costs and the enormous demand from emerging markets.”
The German steel industry welcomed support from the seven associations regarding a possible BHP Billiton-Rio Tinto deal.
“The raw materials used to produce steel have risen in price with such an unimaginable force that it has dwarfed anything ever seen before,” said Hans Juergen Kerkhoff, president of the German steel industry, in a response.
His association added that prices for iron ore jumped 87 per cent over the last year and more than tripled for coking coal, so the industry’s own costs had outpaced the price hikes it has passed on to customers.
According to data compiled by steel consultancy CRU, steel prices in Europe have risen 13 per cent year-on-year for the week ending April 11.