EUROFER Expects European Steel Consumption to Fall 4.5% This Year
08/05/2013 - The base case scenario of a stabilization of the EU economy in the second half of 2013 and a gradual but slow recovery in 2014 is confirmed by EUROFER’s Q3-2013 Economic & Steel Market Outlook.
As expected, the EU economy remained in recession in the first quarter of 2013. However, economic indicators moving into a more positive direction in recent months signal that the likelihood of a near-term stabilization of the EU economy has increased.
Even though confidence picked up over the second quarter with even a rather pronounced improvement in sentiment in June, business conditions will remain difficult for the time being, and industrial momentum will probably recover only slowly.
EUROFER director-general Gordon Moffat: “Access to financing and credit will continue to act as a drag on investment as long as bank lending criteria are not loosened further. The continuation of loose ECB policies, reduced cost of funds and improved balance sheets in combination with lower macro-economic uncertainty should be supportive to banks easing credit standards in the remainder of 2013 and in 2014”.
The outlook expects the global economy to pick up some speed from mid-2013 onwards and a related mild rebound in export demand. This should be supportive to confidence gradually gaining further strength, both at the corporate and the private consumer level.
Q1-2013 activity in EU’s steel using industries fell sharply, reflecting a stronger than usual seasonal slowdown due to harsh winter conditions, depressed domestic demand and weakened support from exports. The drop in activity exceeding earlier estimates implies a negative carry-over effect from the poor first quarter on activity in the remainder of the year and as a consequence, on total output in 2013. For 2014 a moderate recovery is to be expected, owing to a positive contribution from investment and private consumption on domestic demand.
Gordon Moffat: “Real steel consumption will fall almost 4.5% this year. Rising imports exacerbate the impact of weak demand on EU mills. However, owing to a less pronounced stock cycle as in 2012, we do expect that the market will be heading towards stabilization at the end of the year. For 2014 we foresee only a marginal rebound in real consumption. Apparent consumption should improve by 2% compared with last year”.
For the full report, click on the link:
Represented by EUROFER, the European steel industry is a world leader in its sector with a turnover of € 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 member states of the European Union provide direct and indirect employment and a living for millions of European citizens.
