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Economic & steel market outlook for Q4 has darkened further
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Friday, 16 Nov 2012

EUROFER's Q4 2012 Economic & Steel Market Outlook shows that the outlook for the EU steel market has darkened further in recent months.

Low levels of confidence reflect that uncertainty has taken hold across all sectors of the EU economy, from the financial and retail sector to services, industry, construction and consumers, fuelling risk aversion and stifling growth. However, while the EU is clearly the weakest link, also support of exports is fading due to slowing global economic growth.

Mr Gordon Moffat director general of EUROFER said that "Our downstream customers in manufacturing and construction face a steady erosion of orders books. They buy only steel products for immediate needs, waiting for the business climate to improve."

Key question is what could change sentiment to the extent that risk aversion starts to fade and investment and private consumption will strengthen again.

Mr Gordon Moffat said that "The ECB has done its part; it is now up to the governments to reach more consensus about the way forward and make a decisive turn in fighting the crisis."

The current outlook is based on the assumption of a further major escalation of the Eurozone debt crisis being prevented. Another assumption is the global economy will overcome current headwinds. This should translate in a moderate improvement in international trade in 2013. Nevertheless, risks and uncertainties are mounting, now the rest of the world is no longer decoupled from what is happening in the EU.

Production in the steel using sectors will fall by 3% this year; 2013 will see a minor further decline. As steel intensity is also declining, real steel consumption will fall by 4% in 2012, followed by a slight drop in 2013.

Apparent steel consumption is seen falling 9% in 2012. The seasonal post summer recovery in bookings did not occur; instead customers are destocking. Early next year may see some technical recovery as a seasonal uptick in demand may fuel some selective inventory replenishment, but overall steel demand in 2013 will remain dull.

Source - EUROFER


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