EUROFER Says EU in Calmer Waters But 2013 Prospects Remain Bleak
02/05/2013 - Despite several economic indicators edging up since November 2012, EUROFER’s 1Q13 Economic & Steel Market Outlook signals that for the time being the EU steel market looks set to remain stuck in reverse gear.
Despite several economic indicators edging up since November 2012, EUROFER’s 1Q13 Economic & Steel Market Outlook signals that for the time being the EU steel market looks set to remain stuck in reverse gear.
Since late 2012, several economic indicators, such as the EU economic sentiment indicator and PMI output indices, have been improving. Also, the first cautious signs could be observed that reforms in the most troubled countries are beginning to work.
The ECB announcing the Outright Monetary Transaction program and further progress on the restructuring of the Spanish banking sector helped ease financial market tensions. This was supportive to private funds from abroad flowing back into the peripheral Eurozone countries and a strengthening of the Euro.
EUROFER director-general Gordon Moffat said, “We do expect a more supportive economic environment towards the end of the year. But it will take most of 2013 before our customers in industry and the steel distribution chain will notice any improvement in business conditions. Confidence may be rising, but only from a depressed level. Financing and credit are still tight. Companies remain highly risk aversive. Steel market conditions will remain difficult for the time being.”
Activity in the steel using sectors is expected to register a further decline in 2013 due to the continuation of difficult operating conditions in the EU, particularly in construction and automotive. A mild rebound is on the cards for 2014, in line with the expected economic recovery in the EU.
As far as the EU steel market is concerned, the late 2012 rise in bookings confirms the likelihood of a “technical restocking” scenario in 1Q13. However, the market will continue to lack any positive demand impulses from end users until the final quarter of the year. Imports are seen remaining at a reduced level, but will not drop any further. Apparent steel consumption will fall again slightly in 2013, before improving in 2014.
“The EU steel market in 2013 looks set to remain fragile. There is continued risk of supply and demand distortions. The stronger Euro could attract more imports, even though real steel consumption is to remain subdued,” Moffat stated.
For the full report, visit EUROFER’s website at www.eurofer.eu.
Represented by EUROFER, the European steel industry is a world leader in its sector with a turnover of €170 billion and direct employment of 360,000 highly skilled people, producing on average 190 million tonnes of steel per year.
