EU steel consumption to recover in 2020 - EUROFER

The European Steel Association EUROFER has published its Economic and Steel Outlook - Q1 2020 report with steel data up to Q3 2019. EUROFER CEO Axel Eggert said that “2019 was another challenging year for the steel sector: levels of steel consumption and imports, which compared to 2018, were still very high compared to historical levels. While some growth is expected to return to steel markets in 2020, even these modest estimates could be reversed if events take an unexpected turn. ”

Apparent steel consumption in the EU-28 in the third quarter of 2019 decreased by 3.1% compared to the same period last year and amounted to 37.2 million tons. The stock cycle continued to be negative, which also contributed to the negative trend in final steel use. In fact, continued uncertainty about short-term business conditions, as well as relatively high inventory levels at the end of the first quarter of 2019, resulted in sharper-than-expected reductions in inventories in the second quarter, as opposed to the seasonal pattern, which continues, albeit to a lesser extent in the third quarter.

The current downturn in steel demand has resulted in a 4% year-on-year drop in EU domestic supplies in the third quarter of 2019, after a 3% decline in the first quarter. After an exceptional 19% year-on-year fall in the second quarter, imports to third countries fell only marginally in the third quarter (down 1%) to 8.8 million tonnes, accounting for 23.8% of EU steel demand. The monthly data continued to show high volatility.

As in previous quarters, the dynamics of total imports hides product-level distortions, which in fact reflect deficiencies in the current safeguards and which have led to the push to maximize quarterly quotas by several key EU exporters such as Turkey and China.

During the third quarter of 2019, the challenges faced by the EU sector have become even more serious with negative consequences for market conditions. After falling figures in the first two quarters of 2019, the negative trend in real steel consumption has accelerated, and early figures in the last quarter of 2019 signal further declines year-on-year, resulting in an overall 1.1% decline in real steel consumption throughout 2019. of the year. Real consumption levels are expected to recover in the second half of 2020, but also stabilize at low levels in historical terms. Expected decrease in apparent steel consumption in 2019 by 3.3% year on year, etc.