The economy of the European Union is 'well on track' for recovery both this year and in 2015, according to the organisation's Q2-2014 outlook, which is now available.

The report's findings prompted EUROFER director-general Gordon Moffat to say that 'the mood of negativism is clearly fading'. He said that economic conditions were stabilising and that the short-term visibility of domestic markets had also improved.

"The private sector looks more willing to invest again, particularly if credit conditions would ease further," Moffat added. He said that international investors returning to the EU was good news for downstream steel users.

While the EUROFER Economic Committee's report talked of recovery, it stressed that risks remain in the shape of delays in the implementation of reforms, not forgetting the current strength of the Euro and longer-term low inflation, which could slow growth.

The report also highlighted financial market turmoil in several emerging economies, namely Brazil, India, Indonesia, Turkey and South Africa, which have led to capital outflows and overnight currency crunches. EUROFER believes that monetary action to stablise the situation will slow these economies.

The situation in the Ukraine, said EUROFER, will also damage the EU economy because of Europe's trade ties with Russia.

Taken as a whole, therefore, the global economic context looks more uncertain and it could jeopardise 'the expected synchronised recovery of the industrialised economies', according to EUROFER.

EUROFER expects the European steel market to have a slow and fragile recovery in terms of demand over the next two years.

Moffat said that EUROFER was concerned about imports from third world countries into Europe. "Steel trade data show imports remaining at a high level in Q1-2014, attracted by the strong Euro and uptrend in demand," he explained, adding that 'this threatens to distort market conditions in the EU which are already extremely difficult for EU steel producers'.