Housing permits
increased for three consecutive months in the European Union. In this part, we
will look at the manufacturing PMI and vehicle sales in Europe. The automobile
and industrial sectors are among the major consumers of steel products.
Manufacturing PMI;
The above chart shows the manufacturing PMI in Europe. PMI figures are released
on a monthly basis by Markit. Readings above 50 generally indicate economic
expansion, while readings below 50 indicate a contraction. The February 2015
PMI in Europe was 51. The manufacturing PMI in Europe has held above 50 for
several months. A PMI above 50 presents a solid argument for future economic
growth in Europe. The Vanguard FTSE Europe ETF (VGK) gives you access to the
European equity markets.
Vehicle registrations;
February vehicle registrations in the EU increased 7.3% on YoY basis. In 2014,
ArcelorMittal (MT), a leading supplier to the automobile sector, shipped 13
million tons of steel products to automobile companies. AK Steel (AKS) and
Allegheny Technologies (ATI) are other leading suppliers to the automobile
industry. AK Steel gets more than half of its revenues from automobile
companies.
Rising vehicle sales in Europe are positive for ArcelorMittal and US Steel (X),
which also have operations in Europe. Europe's economic indicators have been
steady so far in 2015, while the economic data from China has been worsening.
However, the European steel industry has been reeling under the impact of
increased steel imports from China and Russia.
Source - Market Realist