European steel makers are warning the sector’s economic recovery will continue at only a moderate rate until at least the middle of the year as the industry deals with uncertainty including high energy costs.
In the third quarter of 2021, EU apparent steel consumption increased for the fourth consecutive quarter although it eased to 36 million tonnes in Q3 from 40 million tonnes in Q2.
‘The positive trend in steel-using industries and in steel demand observed since the end of 2020 continues but the outlook is becoming gloomier,’ says Axel Eggert, director general of the European Steel Association (Eurofer). ‘Ongoing supply chain disruptions, skyrocketing energy and carbon prices as well as persisting inflation are putting the recovery of the steel sector at risk. Combined with the current EU climate and energy policies, these are the ingredients of a dangerous cocktail that may drive Europe into a structural crisis and industry out of Europe.’
Steel consumption, after a 13.8% rebound in 2021, is expected to grow by a more moderate 3.2% in 2022 and 1.7% in 2023. Eurofer adds that global supply chain issues and soaring energy prices will also seriously impact demand from steel-using sectors, particularly automotive, until the second quarter of 2022 or beyond.
Eurofer market overview
Domestic deliveries in the EU in Q3 continued positively but at a slower pace (up 6.6%) than the exceptional growth in volumes recorded in the second quarter (+40%). This follows declines of 9.6% in 2020 and 4.2% in 2019. However, EU steel imports continue to surge, up 47.7% in the third quarter after a 45% growth in the second. The 2020 figure at the height of the pandemic was a decline of 17.1%.
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