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Reuters
11 minutes ago
- Reuters
Trump tariffs fan calls by European metal producers for scrap export curbs
BRUSSELS, June 24 (Reuters) - Metal producers in the European Union are lobbying the bloc to impose export duties or curbs on scrap metal shipments "in the next few weeks" to stem a sharp increase in flows to the United States caused by the Trump administration's trade policies. Europe's metal producers are warning of a shortage of scrap and an upending of carbon-emission strategies after U.S. Donald Trump's 50% levy on imported steel and aluminium heightened demand, and sharply inflated prices, for tariff-free scrap. The aluminium industry is asking the EU to stem outflows using export authorisation measures, hitherto only used during the COVID pandemic, when the European Commission demanded companies request permission to export protective gear and vaccine doses. Export tariffs would be another option. "Scrap is a big issue," said Eurofer director general Axel Eggert. "We are asking for an export duty on scrap," he said highlighting that most non-EU producer countries had restrictions in place. Scrap is integral to the EU's push to reduce carbon emissions in the metal industry. Recycling saves up to 95% of the energy required for aluminium production and 80% for steel, the European Commission has said. Scrap metal exports to the United States nearly tripled to 6,028 metric tonnes in the first three months of 2025 versus the same period a year earlier, albeit from a low base, turning a trickle into a flood, said industry lobby group Europe Aluminium, which includes Alcoa (AA.N), opens new tab, Befesa ( opens new tab and AMAG Austria ( opens new tab. Total EU aluminium scrap exports were 345,000 metric tonnes in the first quarter this year, according to Europe Aluminium. With the United States now keeping its scrap, the EU will be left as the main exporting region, it said. Scrap exports were a growing problem for EU metal producers even before Trump imposed duties on imports of primary steel and aluminium in a bid to encourage U.S. domestic production, EU metal producers said. A record 19 million tonnes of ferrous scrap left the bloc in 2023, the majority to Turkey, but also to India, Egypt, Pakistan and the United States, said European steel association Eurofer, which includes Tata Steel ( opens new tab, Thyssenkrupp ( opens new tab and ArcelorMittal ( opens new tab. Metal producers cannot wait for the bloc to strike a trade deal with Trump before taking action, Europe Aluminium's head Paul Voss said. European officials have said the EU may not be able to strike a full deal by Trump's July 9 deadline. Export authorisations had not been used this way before "but extraordinary times call for extraordinary action," Voss added, calling for measures "in the coming weeks". The EU sees itself as a champion of free trade and export curbs are rare. Beyond pandemic restrictions, EU export controls have been limited to shipments of arms, products that have military uses and for countries subject to sanctions. The European Commission said it was engaging regularly with metal producers and recyclers, assessing the market situation. It said it would determine in the third quarter whether a trade measure was necessary for steel, aluminium and copper. The tariffs have given U.S. metal producers incentive to maximise their domestic purchase of scrap metal and scour overseas markets. Industry players said a so-called "arbitrage window" - a short-lived price gap between two markets - had hit around $750 per tonne with the 50% tariff. "If that arbitrage window stays, we will see massive damage to companies that invested the most into the Green Deal," Rob van Gils, CEO of Austria's Hammerer Aluminium Industries, said, referring to the EU's green policy agenda to steer the bloc to carbon emission neutrality by 2050. Van Gils said companies which rely on buying scrap would struggle if local scrap costs neared or even exceeded the market price of final product, or end up buying primary metal from third countries like India with high carbon footprints. "The CO2 footprint of the aluminium industry will be down the toilet," van Gils continued. Europe's scrap sellers oppose export restrictions. Recycling industry group EuRIC said there was no shortage of scrap in Europe and that EU demand only absorbed some 80% of supply for steel. Eurofer's Eggert said export restrictions would help prevent rival producers overseas from buying EU scrap to then sell low-carbon recycled steel back to the bloc. "We are not asking for a ban, but we need to retain more scrap, or incentivise its use scrap in Europe for our decarbonisation," he said.
Telegraph
23 minutes ago
- Telegraph
Starmer's grand plan to save industry is too little too late
Sir Keir Starmer and his Cabinet have rightly identified high energy costs as one of the biggest challenges to British industry, but their proposed solutions fall woefully short. The Government's deluded conviction that 'clean energy' will equate to cheap energy is all over its new Industrial Strategy, published on Monday. It promises to 'tackle high industrial electricity costs' and there's lots of hubristic talk of a 'clean energy superpower mission'. The report notes that Britain's energy-intensive businesses paid twice the European average in electricity costs last year despite having comparable gas prices – an unexpected admission that gas is not to blame for expensive energy. Costs are higher despite the fact that the UK's energy-intensive industries are exempt from the green levies that are added onto bills for the rest of us. However, these factories are not exempt from many of the other costs of the energy transition that are recovered through bills. Not only do renewables need subsidies – the most recent subsidies for offshore wind were 13pc higher than the supposedly expensive cost of generating electricity using gas – they also have a significant impact on the cost of running the network. Renewables have low energy density, meaning many more cables are required to connect an equivalent amount of generating capacity. They are intermittent, meaning the real-time costs of balancing the grid – that is, ensuring supply and demand match at all times in order to maintain system stability – are significantly higher. These additional, hidden costs are added to both industrial and domestic bills. To address all of these challenges and bring energy costs down, the Government does not intend to revolutionise the way costs are recovered, or to require those responsible for creating these costs to pay for them. No, from 2027, some 7,000 British businesses will simply receive a £35-40 per megawatt hour (/MWh) reduction in their bills. Ministers insist that the policy won't be funded through higher bills or taxes, and instead will come from carbon taxes on polluting businesses. But this is yet another stealth tax imposed, with minimal scrutiny, on businesses that generate emissions. This makes no sense: if reducing energy costs worked as intended, it would increase the international competitiveness of British industry, and so the Treasury would reap the benefits in terms of higher corporation and sales taxes. So the more equitable way to fund these discounts would be through taxation, not by increasing the energy cost burden on everyone else. It's also highly unlikely that this paltry reduction, worth around 15-18pc of last year's industrial electricity bills, will be anywhere near enough. For one thing, it will only be granted two years from now. Meanwhile, in Europe some industries receive huge rebates of up to 90pc on their network costs – something the UK Government is now proposing to extend to the largest industrial users in Britain – and are still not competitive as a result of subsidies elsewhere. Steel makers in the US, Japan, South Korea and China benefit from both cheaper energy, fewer carbon taxes and direct subsidies that make their pricing difficult to beat. Europeans are largely prevented from even trying to compete by EU rules barring similar support. On the subject of carbon taxes, what the Government is trying to give with one hand (lower bills in two years' time) it is taking away with another (as we speak). Back in January when Sir Keir announced his intention to harmonise the UK and EU carbon trading schemes, UK carbon prices jumped by £10 per tonne. Full harmonisation is expected to lead to even higher prices, eroding some of the promised benefit. Elsewhere, the Strategy raises the prospect of wider electricity market reforms though a possible move to zonal pricing. This would see wholesale electricity prices varying around the country based on local supply and demand. Unfortunately it's unlikely to result in any changes to the competitiveness of British industry. Some regions of Great Britain would see higher electricity prices in a zonal model and few businesses have the flexibility to move locations. And if they were to move, they are far more likely to move to a cheaper country, rather than a cheaper region of the UK. Senior industry figures have also warned that any changes to the structure of the power market would also see investment stall while the new market rules were hammered out. Even under its unrealistically optimistic projections, the Climate Change Committee does not expect to see savings from net zero before 2037 at the earliest. And despite all of the evidence that net zero is making energy more expensive, the Industrial Strategy clings to the fantasy that 'accelerating to net zero' will magically lower bills. It won't. Industry supply chains are lengthening and finance costs are increasing. Trying to build more renewables and more grid infrastructure when materials and skilled labour are in short supply is not a recipe for lowering costs. Of course no UK Industrial Strategy would be complete without reference to new technologies. There are high hopes for carbon capture and storage – a technology that other countries have thrown huge sums at with little in the way of results. Apparently the UK will succeed where everyone else has failed. Nuclear fusion also gets an honourable mention, despite it still being decades away from being commercialised. The reactions need to produce 10 times more energy than they do now just to offset the amount of energy consumed by the plant, so they probably need to be 100 times better to be commercially viable. One of the biggest problems with the Industrial Strategy is its focus on Europe. All the talk is of levelling the playing field with European peers. This ignores the fact that European industries also lack international competitiveness. Germany industries have been shutting at a fast rate, with some upping sticks to China. Like most things produced by this Government, there are a lot of words but little of substance. Energy intensive industries are likely to be disappointed. And the rest of us are likely to pick up the tab.
Telegraph
23 minutes ago
- Telegraph
Farage's flat tax plan is bold but he risks being outflanked by Labour or the Tories
When Nigel Farage decides to intervene on an issue it's because he's spotted a weakness at the heart of his opponents' policies. The timing of these interventions is one of his greatest strengths and yet, despite his background as a City metals trader, his speeches on economics have not been prolific or his most fertile ground. With his intervention into the non-dom debate, one senses Farage smells the blood of his opponents, not just the Chancellor Rachel Reeves, but the shadow chancellor Mel Stride too. The reason for this is that the flood of extremely wealthy individuals leaving the UK is the result not just of Labour government policy but the work of successive Conservative chancellors before them. The definition of non-dom can be technically nuanced. Put simply, for most cases it means people of foreign birth living in the UK but not considered domiciled here because they will eventually return home. The important part for non-doms was that using a 'remittance' tax payment meant they would pay British taxes on their income within the UK but not on their income outside the UK. All of this came to a shuddering halt in April of this year, and while there are some transitional arrangements in place, many non-doms are not hanging about to face higher tax bills.
