EUROFER's October report on the Economic and Steel Market Outlook 2009-2011 shows that EU real steel consumption fell by almost 30% YoY in the second quarter of 2009 reflecting the persisting weakness of activity in the steel using sectors. The decline was slightly deeper than in the first quarter and resulted in an overall drop in real consumption of 28.5% YoY in the first 6 months of 2009.

The latest estimates and forecasts for the evolution of real steel consumption in the EU in the remainder of this year and in 2010 signal that demand side fundamentals in the EU steel market will remain extremely depressed. The estimate for the third and fourth quarter of 2009 sees real steel consumption falling quite sharply although the anticipated rate of year on year decline will ease to some extent towards the end of the year. All in all, real steel consumption is expected to decrease by approximately 24% this year.

According to the latest forecasts from EUROFER’s Economic Committee, a return to positive growth is not to be expected before the final quarter of 2010. Next year will see a further easing in the negative growth trend of real consumption. A low level stabilization is to be reached during the final quarter of the year. On balance this translates into a further 2% drop in real consumption in 2010.

With a forward view to 2011, some improvement in market conditions seems plausible in line with the expected recovery in end user activity.
Real consumption could rise by 4%.