Eurofer’s Q4-2012 Economic & Steel Market Outlook shows that the outlook for the EU steel market has darkened further in recent months.
Low levels of confidence reflect that uncertainty has taken hold across all sectors of the EU economy, from the financial and retail sector to services, industry, construction and consumers, fuelling risk aversion and stifling growth.
However, while the EU is clearly the weakest link, also support for exports is fading due to slowing global economic growth.
Eurofer director-general Gordon Moffat said: “Our downstream customers in manufacturing and construction face a steady erosion of orders books. They buy only steel products for immediate needs, waiting for the business climate to improve”.
A key question is what could change sentiment to the extent that risk aversion starts to fade and investment and private consumption will strengthen again. Mr Moffat says that the European Central Bank (ECB) has done its part; it is now up to the governments to reach more consensus about the way forward and make a decisive turn in fighting the crisis.
The current outlook is based on the assumption of the prevention of a further major escalation of the Eurozone debt crisis. Another assumption is the global economy will improve. This should translate in a moderate improvement in international trade in 2013. Nevertheless, risks and uncertainties are mounting, now the rest of the world is no longer decoupled from what is happening in the EU.
Production in the steel using sectors will fall by 3% this year; and 2013 will see a small further decline. As steel intensity is also declining, real steel consumption will fall by 4% in 2012, followed by a further slight drop in 2013.
Apparent steel consumption is seen to be falling 9% in 2012. The seasonal post-summer recovery in sales did not materialise; instead customers are destocking. Early next year may see some technical recovery as a seasonal uptick in demand may fuel some selective inventory replenishment, but overall steel demand in 2013 will remain dull.
For the full report, click on the link: Economic & Steel market Outlook 2012-2013