EUROFER has released the contents of “Economic and Steel Market Outlook 2009-2010 - The January ’09 Report” from EUROFER’s Economic Committee
The report said that “Due to the intensifying impact of the global credit crisis, spreading from the financial sectors into other parts of the economy, the EU economy has been pushed into a severe recession at the start of 2009.”
The report added that ‘Due to its specific background and geographical scope, the current downturn is extremely difficult to put into an historic perspective. Nevertheless, provided that the policy measures are timely adopted and effective, the largest probability is still given to a base scenario in which the recession will start bottoming out by late 2009. The latest forecasts of EUROFER’s Economic Committee show EU GDP growth falling this year by 1.9%; a slight improvement in economic conditions is pencilled in for 2010.”
As per report “The significant deterioration in economic fundamentals since autumn 2008 is fully reflected in the outlook for the EU steel using industries; the first half of this year will see output falling by 10% y-o-y. The second half is expected to see a gradual easing of the downward trend, but on balance production in the steel using sectors will still fall 7-8% in 2009. Particularly the automotive sector is badly affected by the recession, but also construction, steel tubes and the engineering sectors cannot escape a sharply downward trend. Most sectors will see a mild improvement in 2010.”
The report also said that “The EU steel market is severely impacted by the recession and will be facing an unprecedented downturn this year. The outlook for the first half of 2009 is for a continuation of the double-digit y-o-y decline in real consumption registered in Q4’08 and a further stock correction in the distribution chain and at the end-user level. As a result, apparent consumption will drop by 29%% y-o-y in the 1st quarter and by a further 23% y-o-y in the 2nd quarter. Apparent consumption will continue to decline in the remainder of 2009, albeit at a less dramatic rate; Q4’09 is expected to see some growth again compared with the very low Q4’08 level. Despite the projected 11% decline in imports in 2009, import pressure will remain high because of the much stronger sacrifice the domestic producers are making in order to enable the market to reach a new equilibrium.”
However it concluded that “Following the 15% drop in 2009, some growth in apparent consumption is foreseen for 2010, owing to the absence of a huge stock reduction as seen in 2009.’