It faced difficulties due to Nazi Germany's desire to re-arm and increased British and American exports after the Wall Street crash of 1929.
In this spirit, the German chancellor Gustav Stresemann declared his wish that "other branches, without stopping at national borders, would follow the example of the steel industry".
[3] The creation of the cartel, after months-long negotiations, was driven by Fritz Thyssen, president of the Stahlwerksverband, Émile Mayrisch, Luxembourg's foremost industrialist and the main founder of ARBED (Aciéries réunies de Burbach-Eich-Dudelange) in 1911, and the Belgian Gaston Barbanson.
Its foundational text used the term "european economic union", in the euphoria that accompanied Germany's accession to the League of Nations.
The cartel operated under the direction of a Council composed of industry representatives from Germany, France, Belgium and Luxembourg.
One of the first decisions of the cartel was in October 1926 the signature of an agreement on the supply of raw iron to Germany, covering 10,5% of German needs, and reserving 7,46% for the Lorraine and 3,09% for Luxembourg.
According to the Financial Times, this cartel was a good means of absorbing the substantial surplus of Lorraine iron ore.
[3] It aimed to provide medium-term visibility to a rapidly growing steel industry driven by domestic demands but marked by inequalities in the size of companies and access to resources and waterways, intending to make these differences complementary.
[1] The country had become a major borrower on the international financial markets in the years 1925–1929, mostly with American, British and Dutch funds, to the tune of more than 25 billion francs.
[3] Controlling only a third of the world production, it was able to regulate a growing market where domestic demands in each country created an export deficit.
Furthermore, starting from 1933, Nazi Germany increasingly turned to its steel industry for armament and chose to import more iron ore from Sweden to meet this new demand.
However, during the summer of 1931, the collapse of prices, dropping from 6 to 2 pounds sterling per ton, forced a return to negotiations at the end of 1931.
[3] During World War II, Alexis Aron, the former head of Forges et Aciéries du Nord et de l'Est,[4] who had taken refuge in the Alps, drafted plans in 1943 for the future European steel industry: documents describing a peace based on reconciliation, drawing primarily from the experience of the International Steel Agreement.