The European Union steel market will remain subdued even after a likely return to growth in the region’s economy during the third quarter, steel industry body Eurofer said.

Eurofer said in a report that the recovery forecast for the coming quarters would be slow and surrounded by uncertainty as prospects for the EU’s steel-using sectors – such as automotive and construction – remained dim.

Eurofer&rsrsquo;s report said weak activity in Europe’s steel sector had brought a slump in demand as consumption fell 45% year-on-year in the first half of 2009 and by almost 32% in the third quarter.

It said a downward trend in orders at mills was bottoming out as some customers returned to fill gaps in their stocks while an inventory build-up after heavy destocking in 2009 would lead to a ‘technical’ recovery in steel demand.

But it warned against premature optimism. “Global crude steel production increasing in anticipation of a recovery in steel demand which yet has to materialise remains a major risk for the EU supply-demand balance,” Eurofer director general Gordon Moffat said.