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EUROFER:
EU steel market bottoming out
Jul 2, 2009
"We finally see some light at the end of the tunnel", said Eurofer director general Gordon Moffat with regard to Eurofer’s June report on the Economic and Steel Market Outlook 2009-2010.
While hard data have so far continued to provide evidence of the EU sinking deeper into recession, recent surveys and leading indicators suggest that the economic downturn could bottom out over the coming months. However, any recovery is expected to be fragile and still surrounded by uncertainties and downward risks.
The report shows that output of the EU’s steel using sectors - such as automotive and the construction sector - fell by almost 25% year-on-year in the 1st quarter of 2009; a similar drop in output is estimated for the 2nd quarter. The steep drop in order intakes since early 2009 implies strongly reduced capacity utilisation rates for the remainder of the year. On balance, this leads to a very bleak outlook for the steel using sectors for 2009 with output more than 18% down on 2008 and a low-level stabilisation in 2010.
Due to this dramatic fall in output and continued destocking in the steel supply chain, steel demand (apparent steel consumption) declined by 43% year-on-year in the 1st half of this year.
According to the report destocking and weak activity in the steel using sectors will continue to depress apparent steel consumption in the 3rd quarter of 2009. However, from the 4th quarter onwards the market is expected to see a low-level equilibrium as the negative effect of the stock cycle starts to ease.
On average, apparent steel consumption will fall by almost 33% in 2009 compared to 2008. However, in 2010, the stock cycle reversing to slightly positive will result in apparent steel consumption growing by almost 14%.
For the full report, click on the link: -> Economic & Steel Market Outlook 2009-2010
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