Speaking at the International Steel Trade Day organized by STSG-Eurometal in Milan on April 4th, Mr Juergen Nusser MD of Eurometal, presented a negative outlook for the European steel market in 2013.
Mr Nusser said that demand fell by 9.5% in 2012, and the first signs of a recovery will be seen only in late 2013, while we will have to wait until 2014 to see a mild improvement in demand fundamentals.
According to Mr Nusser, in 2012 apparent steel consumption in the EU amounted to 142 million metric tonne, compared to 157 million metric tonne in 2011 and 201 million tonne in 2007, and in 2013 it will fall by 3% YoY to 138 million tonne. This shows the existence of excess capacity, which inevitably puts pressure on prices and leads to narrower profit margins.
He said that apparent consumption decreased by 60 million metric tonne from 2007 to 2012, with 20 million tonne lost in the bubble of 2007, 20 million tonne due to the recession in 2008-2009 and 20 million tonne lost because of a structural change which transferred purchasing power from finished steel to raw materials and from producers to end users.
He added that, this means that we can only expect a maximum recovery of 20 million metric tonne compared to 2012, which would lead to an apparent steel demand in the EU not exceeding 160 million tonne. 40 million metric tonne are gone forever since the respective production capacity is obsolete.
(Source: www.steelguru.com )