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News&Events

Hardship for EU steel market to continue in 2013

Uncertainty, weak sentiment and difficult access to financing continue to paralyse the EU economy. Key indicators lost ground again in March and April. Also recent data on industrial production and unemployment signal that the economy continued to weaken in the first months of 2013. At the same time, the performance gap between Germany on the one side and France, Spain and Italy on the other appears to be widening.

Pressure on the industrial sector is rising. Only exports are expected to provide support to activity, on a par with the gradual strengthening in global economic momentum later this year. Total activity in the steel using sectors is expected to decline by around 1.5 per cent this year. For 2014 a moderate recovery is pencilled in, supported by exports and domestic demand as investment and private consumption start to recover cautiously.

EUROFER Director-General Gordon Moffat: “For the time being, our client sectors will remain heavily exposed to weak domestic demand. Particularly the automotive and construction sectors struggle on in 2013. What is needed to kickstart the internal market, is better sentiment. This will only happen if credit supply improves and a credible growth perspective is offered by EU policymakers”.

Steel demand in the EU headed further down (year-on-year) in the first quarter of this year, despite some moderate restocking of inventories. Meanwhile, imports increased sharply, reversing the falling trend registered in 2012. As a consequence, domestic producers lost market share to suppliers from third countries.

The market situation in the remainder of this year looks set to remain depressed. Bearish end-user and distributor sentiment combined with liquidity and credit restrictions result in continued cautious buying behaviour. This implies that the effect of the stock cycle will be less of a drag on demand than in 2012. Apparent steel consumption is foreseen to drop by another two per cent in 2013, before rising again moderately in 2014.

Gordon Moffat: “Imports are again on the rise and no longer soften the downturn as in 2012. As long as steel output in China is not better adjusted to slowing domestic demand, a distortion of global trade flows will be the result and inevitably lead to rising import pressure in the EU steel market”.

For the full report, click on the link: Economic & Steel Market Outlook 2013-2014

Represented by EUROFER, the European steel industry is a world leader in its sector with a turnover of- EUR 170 billion and direct employment of 360 thousand highly skilled people, producing on average 190 million tonnes of steel per year. More than 500 steel production and processing sites in 23 EU member states provide direct and indirect employment and a living for millions of European citizens.

Contact:

Gordon Moffat, Director General +32 2 738 79 26 (g.moffat@eurofer.be)

Jeroen Vermeij, Director Market Analysis & Economic Studies +32 2 738 79 36 (j.vermeij@eurofer.be)

Bernd Overmaat, Communications Manager, +32 2 738 79 32 (b.overmaat@eurofer.be)

 

 

EUROFER - The European Steel Association

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B-1000 Brussels

Tel.: +32 2 738 79 20
Fax.: +32 2 738 79 55