Eurofer’s Q2-2011 steel market outlook confirms that evidence for a sustained recovery in EU manufacturing remains strong, supported by firm export demand and an expected improvement in EU investment.
Internally, the EU continues to show strongly diverging trends at the country level, with respect to economic, industrial and export performance. The EU’s stronger member countries, with Germany clearly in leading position, have so far been able to offset the much weaker performance of the countries affected most by fiscal and financial stability problems. The full report is available at www.eurofer.eu
Due to rising inflation – driven by rising prices for oil and other commodities – and geopolitical unrest, the risks for the economy are currently more skewed towards the downside than at the start of the year.
Eurofer director-general Gordon Moffat says “Rising capacity utilisation rates across most sectors and high confidence levels amongst industrialists suggest that investment will strengthen this year and next. Total investment is forecast to increase almost 3% in 2011 and around 4% in 2012. The outlook for investment in machinery and equipment is particularly robust with 5 to 6% growth, but also investment in construction is seen growing slightly this year and a bit stronger in 2012, ending a 3-year period of decline”.
The EU steel market looks relatively well balanced at the start of 2011. Stock levels at end-users and in the distribution chain are still assessed as being well adjusted to the current level of downstream activity and bookings in early 2011 remained firm. Real consumption growth will provide the main stimulus to apparent consumption growth in 2011 and 2012, supported by the continued rebound in activity of all steel-using sectors.
Also the stock cycle will continue to have a slightly positive impact on steel demand.
Imports are seen rising further, by 12% in 2011 and another 6% in 2012.
According to the World Steel Association, EU27 countries produced 45.6Mt of crude steel in the first quarter of 2011, up by 6.9% compared to the same quarter of 2010.