Brussels - Eurofer’s Quarter 3/2010 market report on the Economic and Steel Market Outlook 2010-2011 confirms that the EU steel market gained traction in recent months. Orders and output have been improving across a wide range of sectors but particularly so in the automotive sector and its supply chain. Meanwhile the construction industry and shipbuilding remained in the doldrums.

Although real consumption is still relatively weak, the improvement in activity triggered a wave of stock replenishment in the distribution chain and at end-users. Despite stocks being replenished again, overall inventory levels have risen only very modestly since the start of the year. Stocks are largely assessed as normal in relation to the prevailing market conditions.

A more solid recovery is on the cards for 2011, in line with activity in the steel using sectors - including the construction sector – gaining further strength as investments in the EU could see some growth again. However, exports will continue to be the main driver for growth in the EU.

Despite this modest but gradual improvement in market fundamentals, managing uncertainty will remain the key challenge for EU steel industry. EU governments face the dilemma of freezing budgets and cutting deficits without stifling economic growth. Austerity programmes do not bode well for a short-term improvement in internal EU dynamics, which means that the recovery will remain lacklustre for the foreseeable future and heavily dependent on the strength of economies abroad. Furthermore, the impact of rising costs of raw materials on steel prices may jeopardise the still hesitant recovery in the steel using sectors.

Imports rising faster than EU demand could put the still volatile market balance in the EU at risk.

The full report on "Economic and Steel Market Outlook 2010-2011" can be downloaded under eurofer.org.

Quelle: EUROFER

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