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Economic and steel market outlook 2020-2021, first quarter
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Apparent steel consumption fell by 3.1% year-on-year in the third quarter of 2019, a slight moderation compared to the drop recorded in the second quarter (-6.7%). The ongoing negative trend in steel demand is the result of the continued slump in EU’s manufacturing sector due to weakened exports and investment that has become more pronounced during the second and third quarter of 2019. Leading indicators suggest that the downturn continued in the remainder of 2019, albeit with some signs of stabilisation. No significant rebound is forecast before the second half of 2020.
The current downturn of the manufacturing sector in the EU is not likely to bottom out in the very short-term. Major risk factors are escalating trade wars between the US and several of its main trading partners (mostly China, despite the trade agreement signed on 15 January 2020 that has eased frictions) and persistent uncertainty regarding the final Brexit deal to be agreed by the end of 2020. These factors are set to weigh on trade conditions during 2020, and may even lead to a further deterioration in business sentiment and seriously
hamper investment growth. In this scenario, the EU steel sector would continue to be severely impacted, also having to cope with growing import distortions as well as persistently high import volatility as a result of the increase in the safeguard quotas and transfer mechanism of unused quarterly quota.
Brussels, 10 September 2024 – The Draghi Report thoroughly identifies the bottlenecks to both the EU industry's decarbonisation and competitiveness. The proposed recommendations for energy-intensive industries, including on energy, trade, carbon leakage, financing and lead markets, should be integrated into the upcoming Clean Industrial Deal and implemented with concrete measures as a matter of urgency. Alignment across different policies is crucial, and should be accompanied by sector-specific initiatives to enable the transition of each industry including steel, asks the European Steel Association.
Brussels, 05 September 2024 – The latest developments in the steel sector and across critical value chains are worrying signs of a steady deterioration, endangering the survival and the transition of steelmakers and their key manufacturing customers in Europe, such as automotive. A Clean Industrial Deal including swift and radical measures in EU industrial, energy and trade policies, is the last chance to ensure Europe’s prosperity and shield European industry from cheap imports driven by third countries’ unfair trade practices, overcapacity and lower climate ambition, urges the European Steel Association.
Brussels, 25 July 2024 – Major indicators in the European steel market show a steeper-than-expected downward trend, further impacting the outlook for this year and the next. Poor demand conditions, driven by ongoing factors such as high energy prices, persistent inflation, economic uncertainty and geopolitical tensions, are exacerbated by a manufacturing crisis affecting the largest steel-using sectors, including construction and automotive. According to EUROFER’s latest Economic and Steel Market Outlook, apparent steel consumption is further deteriorating. After a slump (-3.1%) in the first quarter of 2024, its rebound for the full year has been revised downwards (to +1.4% from +3.2%), as well as for 2025 (+4.1% from +5.6%). Similarly, output in steel-using sectors, after a decline in the first quarter (-1.9%), is projected to experience a deeper-than-expected recession (-1.6% from -1%). A recovery is anticipated only in 2025 (+2.3%). Steel imports continue to show historically high shares (27%).