EUROFER: Rebound manufacturing sector good news for EU steel market
Jul 14, 2010
EUROFER director general Gordon Moffat told STEEL GRIPS: “Orders and output have been improving across a wide range of sectors but particularly so in the automotive sector and its supply chain. Meanwhile the construction industry and shipbuilding remained in the doldrums. Although real consumption is still relatively weak, the improvement in activity triggered a wave of stock replenishment in the distribution chain and at end-users.”
Despite stocks being replenished again, overall inventory levels have risen only very modestly since the start of the year. Stocks are largely assessed as normal in relation to the prevailing market conditions.
A more solid recovery is on the cards for 2011, in line with activity in the steel using sectors - including the construction sector – gaining further strength as investments in the EU could see some growth again. However, exports will continue to be the main driver for growth in the EU.
Despite this modest but gradual improvement in market fundamentals, managing uncertainty will remain the key challenge for EU steel industry. EU governments face the dilemma of freezing budgets and cutting deficits without stifling economic growth. Austerity programmes do not bode well for a short-term improvement in internal EU dynamics, which means that the recovery will remain lacklustre for the foreseeable future and heavily dependant on the strength of economies abroad.
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