Eurofer foresees modest steel demand growth in 2015

Europe – According to the European steel association Eurofer, economic growth in the EU has remained soft so far this year, with a particularly disappointing Eurozone performance in the second quarter.

Activity growth in steel-using sectors slowed sharply in the second quarter. Eurofer’s acting director-general Axel Eggert adds: ‘In most sectors, underlying momentum is still rather slow. Most companies have not seen much of an improvement in new orders, output and capacity utilisation rates whereas confidence came under pressure.’

Eurofer anticipates total output growth to be around 2.3% in 2014. Growth in 2015 is not expected to be much higher, but likely it will be ‘more balanced over the year and more harmonised across the steel-using sectors’. EU steel demand growth decelerated in the second quarter of 2014 to 4.4% year on year.

The rise in demand was taken, however, by imports with total incoming volumes growing 26% year on year and long product imports surging 49%. Meanwhile, EU mills’ shipments to the domestic market stabilised at around year-earlier levels which, according to Eurofer, implies that they are losing out to third country suppliers.

Sluggish final steel demand and destocking will result in a slight drop in apparent consumption in the second half of this year. For 2014 as a whole, this will mean year-on-year growth of 2.6%. While lower than the forecast issued in July, it still confirms the view of a moderate recovery of the EU steel market.

‘Steel market conditions are foreseen to remain muted in 2015, although a moderate strengthening of demand is to be expected in line with the mild further rise in activity of the steel-using sectors in the EU,’ Eggert states. However, imports are expected to remain high, thereby exerting severe margin pressure on EU steel mills.

For the full report, see: www.eurofer.be