EU steel demand to take a step back in 2012 before market rebounds in
2013
EUROFER’s
Q2-2012 economic and steel market sees recessionary pressures in the EU
gradually easing from the 2nd quarter onwards. However, the strength
and timing of a economic turnaround remains surrounded by uncertainties and
risks. Most of them stem from internal problems and structural imbalances in the
EU.
EUROFER
director-general Gordon Moffat: “The recent trend in the indicators is
consistent with a stabilisation in economic fundamentals after months of
weakening; this could pave the way for a cautious recovery later in the year.
Owing to solid order backlogs and support from the weaker euro on export
markets, activity across EU’s manufacturing sector has been holding up
relatively well”.
On
balance, activity in the steel using sectors is seen falling by less than 1% in
2012.
The EU
market started 2012 on a positive note. End-users but particularly steel service
centres and distributors came back to the market to replenish selectively their
depleted inventories. Orders in January and February strengthened compared with
the depressed volumes booked in Q4-2011. EU mills in late 2011 adjusting their
output to lower demand levels and a reduction in third country imports of most
steel products was supportive to a relatively healthy supply-demand situation at
the start of the year.
Q1-2012
apparent steel consumption is expected to have reached a better level than in
the final quarter of last year, but is still forecast to be almost 11% down on
the same period of 2011. This pattern is expected to repeat itself in the 2nd
quarter, albeit with a smaller y-o-y drop in demand. In the 2nd half
of the year, the downward trend in demand should reverse into a gradual
strengthening. In total, apparent steel consumption is projected to fall 2.7% in
2012.
Gordon
Moffat adds: “We are confident that in 2013 a further improvement in the
business cycle will result in a modest rebound in real consumption and trigger
some restocking. Apparent steel consumption is forecast to rise by
2.5%”.
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