Steel imports still a concern despite ‘mild’ growth in EU consumption

Europe – Having grown 3.1% year on year in the first quarter of 2017, initial data and estimates for the second quarter indicate EU apparent steel consumption ‘€˜remained on a mildly positive growth trend’€™. However, a relatively sharp rise in imports during April and May suggests the region’€™s mills ‘€˜most likely again lost ground to third-country suppliers’€™, laments Axel Eggert, director general of European steel association Eurofer.

The EU’s apparent steel consumption is forecast to continue its improvement during the remainder of 2017, with Eurofer forecasting an increase of 1.9% for the year as a whole. In 2018, steel demand growth ‘is expected to moderate, on a par with the mild slowdown in real consumption growth’.

‘Import distortions will remain the main risk for the stability of the EU steel market,’ Eggert asserts. ‘With no structural solutions for the underlying problem of global overcapacity in sight, the number of protectionist and even isolationist measures looks set to increase.’

He expresses particular concern that measures potentially stemming from the US Section 232 investigation ‘may lead to a proliferation of disastrous global trade flow distortions’.

Healthy export opportunities and strengthening domestic demand fundamentals owing to a minor acceleration in investment growth are likely to boost activity in the EU’s steel-using sectors, with Eurofer projecting that their total output will grow by 3.5% this year and by 2.1% in 2018.