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Economic and steel market outlook 2020-2021, third quarter
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The COVID-19 pandemic has slashed steel consumption forecasts as well as the overall economic outlook across the EU and the world. Shutdown measures implemented by governments starting from March 2020 have hugely impacted manufacturing activity and steel-using industrial sectors, although these measures have been almost completely removed – or broadly eased - at the time of writing. This has affected the automotive sector in particular, but it and other industries had already been experiencing subdued developments in the second half of 2019 due to the downslide of the manufacturing sector in the EU, escalating trade wars between the US and several of its main trading partners and persistent uncertainty regarding Brexit. All of these factors combined led to continued further deterioration in business sentiment and curbed investment growth throughout 2019, even before the onset of the pandemic.
Actual data for apparent consumption reported here refers to the first quarter of 2020, which only partly reflect the effects of the pandemic on the industry and the economy as severe lockdown measures were only implemented across most EU members states from the second half of March 2020.
However, economic prospects and steel consumption outlook reflect the dramatic deterioration due to the expected consequences of the pandemic. The outlook for this year and for 2021 is particularly affected by the Covid-19 related disruption and is likely to be revised again later in the year in EUROFER’s later quarterly outlooks.
At the time of writing, lockdown measures had been almost completely removed or considerably eased in most EU member states, which had allowed industrial activity to restart. The implementation of the containment measures that had been put in place in EU member states led to an almost complete shutdown of industrial activity in the second half of March and in April. The unprecedented nature of this crisis makes uncertainty and volatility surrounding possible developments in the coming months means still high.
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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%).
Third quarter 2024 report. Data up to, and including, first quarter 2024
Picture Copyright: European Union, 2024 Source: EC - Audiovisual Service
Brussels, 18 July 2024 – The re-election of Ursula von der Leyen as President of the European Commission paves the way for the continuation of the ambitious initiatives started in her first term. For a stronger and prosperous Europe, defining a pragmatic set of measures within the first 100 days of the new Commission mandate is the right step forward to ensure the success of the EU’s industry transition, if properly implemented. The European Steel Association urges that the Clean Industrial Deal be complemented as a priority by a European Steel Pact, as proposed by the German delegation to the European People’s Party (EPP).