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Steel: report on the state of the steel industry. Request for the Council's Assent to the introduction of a system of production quotas for coils and derivative products. Communication from the Commission to the Council. COM (81) 277 final, 25 May 1981

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  • Economics


COMMISSION OF THE EUROPEAN COMMUNITIES COM(81) 277 final Brussels, 25th May 1981 S T E E L Report on the state of the steel industry Request for the Council ' s assent to the introduct ion of a system of produc tion quotas for coils and derivat i ve pro- ducts (Com•unication from the Commission to the Council ) COM(81> 277 final Since it had been established by the Commission that there was a manifest crisis in the European steel industry, the Council gave its assent on 30th. October last year, in accordance with Article 58 of the ESCS Treaty, to the introduction of a system of production quotas for the Community steel industry. Th~s decision was prompted by : a> the severe and widesp~ead slump in demand on the Community and world markefs; b) the serious decline in the rate of utilization of production capacities to close to 70 X in the first quarter of last year and to 58 X by the end of last summer; c) a drop of nearly 13 X in prices between January and September of last year; d) the producers' inability to enter into a voluntary commitment vis~a-vis the Commission to reduce their production of rolled finished and crude steeL products. Since the machinery which had been set up in 1977 under Article 57 of the ECSC Treaty was no longer effective, there was no other choice but to make use of the measures provided for by Article 58 of the Treaty. By taking this action, the Council and Commission sought to achieve the following objectives : a) to maintain the unity of the· European steel industry and thus, Community solidarity; b) to create the right economic climate for the restructuring of this industry, which is essential; c) to re-establish a more balanced relationship between supply and demand so that market prices can return to the level of American 'and Japanese prices; d) to give producers time to return to voluntary arrangements in keeping with the Treaty. .1. 2.- a) Steel market analysis and outlook There ha

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