EUROFER: Challenging Times Ahead for EU Steelmakers
05/12/2020 - Europe’s industrial sector might fully restart by July, but output likely will remain down through the end of the year, according to a new demand forecast from the European Steel Association.
The association said in its second-quarter outlook that it doesn’t expect market conditions to improve anytime before the fourth quarter of this year or early 2021.
“Much will depend on the length of the industrial lockdown in steel-using sectors that has almost put a stop to new steel orders (on the supply side),” it said.
But even before the pandemic, Europe’s steelmakers were facing a difficult market, the association said. In the final three months of 2019, apparent consumption fell nearly 11% year over year, dragging down full-year demand by 5.3%.
“This was the worst performance in EU steel demand since 2012,” said Axel Eggert, the association’s director general. “The negative development seen in the fourth quarter of 2019 is the result of the continued slump in the EU’s manufacturing sector due to weakened exports and investment. This trend became more pronounced during the second half of last year, coupled with escalating trade tensions between the U.S. and its major trading partners.”
Given that, difficult times are ahead for steelmakers, the association said, even as economies emerge from pandemic closures.
“If and when the economy returns to normal conditions, all the downside risks that had considerably weakened steel-using sectors and steel demand during 2019 will still be there, namely import distortions and continued global overcapacity and weakness in the global manufacturing cycle,” the association said.
“Much will depend on the length of the industrial lockdown in steel-using sectors that has almost put a stop to new steel orders (on the supply side),” it said.
But even before the pandemic, Europe’s steelmakers were facing a difficult market, the association said. In the final three months of 2019, apparent consumption fell nearly 11% year over year, dragging down full-year demand by 5.3%.
“This was the worst performance in EU steel demand since 2012,” said Axel Eggert, the association’s director general. “The negative development seen in the fourth quarter of 2019 is the result of the continued slump in the EU’s manufacturing sector due to weakened exports and investment. This trend became more pronounced during the second half of last year, coupled with escalating trade tensions between the U.S. and its major trading partners.”
Given that, difficult times are ahead for steelmakers, the association said, even as economies emerge from pandemic closures.
“If and when the economy returns to normal conditions, all the downside risks that had considerably weakened steel-using sectors and steel demand during 2019 will still be there, namely import distortions and continued global overcapacity and weakness in the global manufacturing cycle,” the association said.
