EUROFER: Strengthening Trend in EU Steel Market Set to Continue in 2015
12/17/2014 - The latest economic surveys show that following a weakening trend in Q3, most indicators have been stabilizing, according to EUROFER.
Geopolitical concerns appear to have ebbed away to some extent in recent months. EUROFER foresees for 2015 continued but slow growth, although the outlook remains vulnerable to downside risks such as an escalation of the conflict in the Ukraine, slow growth in the emerging world and persisting weakness in France and Italy.
Some positive news emerged more recently, such as the €315 billion “Junckers plan” to stimulate investment activity in the EU over the coming 3 years. A significant part appears to be earmarked for infrastructure investment. This could potentially boost civil engineering projects and as a consequence also constructional steel demand. Meanwhile, the weaker Euro is good news for Eurozone exporters and their suppliers. On balance, prospects for the steel using sectors are moderately positive, which underpins the expectation of a modest rise in real steel consumption in 2015.
Following the usual year-end destocking steel buyers will have to return to the market in early 2015, with actual weather conditions being the wild card for market conditions. Uncertainty about raw material price trends could also lead to steel buyers holding their breath and order only for immediate needs.
Another key uncertainty stems from imports. October surveillance 2 data that show that finished flat steel imports remained at an elevated level and for quarto plate even rose to fresh heights. Both in raw material markets and in steel trade China represents the key determining factor.
EUROFER’s General Director Axel Eggert commented: “More stability in the steel market would be beneficial to both producers and consumers. China reducing its steel output in line with weaker domestic demand would be a major step forward to improve global steel market fundamentals”.
Some positive news emerged more recently, such as the €315 billion “Junckers plan” to stimulate investment activity in the EU over the coming 3 years. A significant part appears to be earmarked for infrastructure investment. This could potentially boost civil engineering projects and as a consequence also constructional steel demand. Meanwhile, the weaker Euro is good news for Eurozone exporters and their suppliers. On balance, prospects for the steel using sectors are moderately positive, which underpins the expectation of a modest rise in real steel consumption in 2015.
Following the usual year-end destocking steel buyers will have to return to the market in early 2015, with actual weather conditions being the wild card for market conditions. Uncertainty about raw material price trends could also lead to steel buyers holding their breath and order only for immediate needs.
Another key uncertainty stems from imports. October surveillance 2 data that show that finished flat steel imports remained at an elevated level and for quarto plate even rose to fresh heights. Both in raw material markets and in steel trade China represents the key determining factor.
EUROFER’s General Director Axel Eggert commented: “More stability in the steel market would be beneficial to both producers and consumers. China reducing its steel output in line with weaker domestic demand would be a major step forward to improve global steel market fundamentals”.
