EUROFER Sees 8% Rebound in EU Steel Tube Industry in 2021
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EUROFER Sees 8% Rebound in EU Steel Tube Industry in 2021

The European Steel Association EUROFER’s newly released Economic & Steel Market Outlook 2021-2022 said that “Production activity in the EUsteel tube

The European Steel Association EUROFER’s newly released Economic & Steel Market Outlook 2021-2022 said that “Production activity in the EUsteel tube industry has become more closely aligned with downstream sectors such as construction, automotive, the metal goods and mechanical engineering sectors. This declining trend was exacerbated dramatically by the outbreak of the Covid-19 pandemic in March 2020, resulted in an even steeper fall in steel tube output in the first and second quarter of 2020. During 2020, output in the EU steel tube industry was heavily impacted by the industrial lockdown that had hit the EU further to the COVID-19 outbreak. EUROFER assumes that provided that the pandemic fades around the third quarter 2021, the full year should see a moderate rebound. In fact, the outlook for demand for large welded tubes from the oil and gas sector is expected to remain very weak. Most important regional projects from which EU-based large welded tube producers could benefit have been put on hold and little progress was made over the past few months in solving the political and commercial issues hampering the completion of some specific pipeline projects. The recent collapse of global oil demand and oil prices, which struggle to recover around profitable levels, reinforces this difficulty.”

EUROFER said “In fact, the demand outlook from the other downstream steel tube market segments is expected to remain fairly sluggish even after the return to normal business conditions. This will produce some positive effects on output from the second quarter of 2021, provided that the economic scenario will not deteriorate due to another external shock. Demand from the construction sector looks set to recover, whereas tube demand from the automotive and engineering sectors is forecast to remain rather weak, even if these sectors restore their production activity to high historical levels and supply chain disruptions are ultimately sorted out. Import pressure on steel tube markets in the EU will remain high, particularly for the commodity segment. Steel tube output is set to fall for the third consecutive year in 2020, at a much faster rate than in 2019 of minus 15.2% vs minus 0.3%. A rebound of 8.4% is foreseen for 2021, followed by growth of 5.1% in 2022.”

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