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Greek steel producers downplay risk of eurozone exit - 3 November 2011

If Greece leaves the euro-zone, its local steel industry would regain competitiveness in export markets, Steel Business Briefing hears from local sources. However, local sources remain convinced this is unlikely.

If Greece reintroduced the drachma, steel producers and distributors could gain a 30-35% currency advantage over euro-zone players; this would make imports almost impossible, while producers and distributors could almost double their exports, Wilhelm Alff, from Stemcor, told the most recent Irepas conference in Saint Petersburg.

Greek sources agree that the steel industry could benefit from lower labour costs, compared with other producing countries, while the strategic positions of its ports is an advantage. “Longs producers could lift once again their capacity utilisation and could even look into re-starting flat production,” a market source comments.

Nevertheless, imports of scrap and other raw material would become highly difficult, especially for the three EAF based long producers and the number of tube makers in the country.

“At this stage the scenario of Greece leaving the euro-zone remains only a speculation. The latest announcement of a referendum on the proposed bail-out is probably only a move to put pressure on the European governments to have a better treatment in terms of the Greek debts. Our government knows that the referendum is too much of a risk at the moment,” a source at a major longs and flats distributor in the country explains to SBB.

 

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