Malta’s Steel Industry Braces for EU Tariff Hike

In the bustling heart of Birkirkara, at the intersection of Triq San Ġorġ and Triq il-Kbira, you’ll find Malta’s largest steel fabrication yard, Cimici. Here, the hum of machinery is a constant symphony, a testament to the island’s thriving steel industry. But today, the air is thick with more than just the scent of metal and oil. It’s heavy with anticipation, as news of the European Parliament’s decision to hike tariffs on foreign steel sinks in.

The European Parliament, in a bid to protect local industries from cheap imports, has voted to increase tariffs on foreign steel. The new regime, set to come into effect next month, will see duties on certain steel products more than double. But what does this mean for Malta, an island nation that imports 95% of its steel?

For starters, it’s going to get more expensive to do business. “We’re looking at a significant increase in our production costs,” says Mario Camilleri, CEO of Cimici. “And that’s before we even consider the potential impact on our supply chain.”

Malta’s steel industry is a critical cog in the island’s construction sector, employing thousands and contributing millions to the GDP. But it’s also a sector that’s heavily reliant on imports, making it particularly vulnerable to fluctuations in global steel prices and tariffs.

Take Cimici, for instance. The company imports steel from all over Europe, from Italy and Spain to Germany and the UK. With the new tariffs, the cost of their imports from these countries is set to skyrocket. “We’re talking about a potential 25% increase in our raw material costs,” says Camilleri.

But it’s not all doom and gloom. The new tariffs could also present opportunities for local steel producers. With imports becoming more expensive, there’s a chance that demand for locally produced steel could increase.

the Maltese government is exploring ways to support the industry during this transition period. “We’re in discussions with the Ministry of Economy and Industry,” says Camilleri. “They’re aware of the challenges we’re facing and they’re looking at ways to help us navigate this new scene.”

However, the road ahead is uncertain. The new tariffs are just one piece of a complex puzzle, with Brexit, the COVID-19 pandemic, and global economic uncertainty adding to the mix. “It’s a challenging time for our industry,” says Camilleri. “But we’re resilient. We’ve weathered storms before, and we’ll weather this one too.”