Steel Using Sectors in Europe to Grow by 1% in 2022

Brussels based the European Steel Association EUROFER in latest Economic and steel market outlook 2022-2023 has said that despite the persisting supply chain issues and Russia's invasion of Ukraine, steel-using sectors marked the fifth consecutive year-on-year growth over the first quarter of 2022 of 6.9%, gaining speed compared to the fourth quarter of 2021 of 2.6%. This trend had peaked in the second quarter of 2021 when steel-using sectors achieved a spectacular, one-off growth rate 27.9%. This was due to the industrial recovery gaining momentum, but it was also a result of the comparison to record lows of the second quarter of 2020. By contrast over the second half of 2021 total production activity in steel-using sectors had been increasingly impacted by the ongoing supply chain issues (lack of components and materials, bottlenecks and rising transportation costs, etc) and rising energy prices that took their toll in terms of production costs, component shortages and lower output. However, total output in steel-using sectors in 2021 rebounded by 8.6% after the sharp drop recorded in 2020 due to the impact of COVID-19 of minus 10.6%) mainly thanks to very positive developments over the first two quarters.EUROFER said “The war in Ukraine has certainly impacted the outlook for the rest of 2022, with supply chain issues still persisting and even being exacerbated but figures for the first quarter of 2022 do not yet reflect the impact on the steel using sectors' output as whole. However, different developments for individual sectors lie behind this figure. The positive evolution of total steel-using sectors' output was a combination of very positive developments in the construction, mechanical engineering and transport sectors on one hand, and severe drops in output for automotive and domestic appliances on the other, which had already been impacted by ongoing supply chain issues in the previous quarters. Steel-using sectors' output is expected to continue to expand in 2022, but growth will be halved further compared to EUROFER's previous outlook of 1.1% vs 2%. This is a result of the rapid deterioration of the global industrial and economic outlook following Russia's war in Ukraine, coupled with ongoing and worsening supply chain issues. This combination of factors is expected to yield either very modest growth or even drops in output over the three remaining quarters of this year. Growth in output will accelerate only moderately in 2023 to 2.2%, due to overall high uncertainty which is likely to continue and ease only from the second quarter of 2023 onwards.”2022 ForecastTotal- 1.1% YoYConstruction, weightage 35% - 5.3% YoYAutomotive, weightage 18% - Minus 0.5% YoYMechanical Engineering, weightage 14% - 3.2% YoYMetal Goods, weightage 14% - 3.5% YoYTubes, weightage 13% - 3% YoYDomestic Appliances, weightage 3% - Minus 2.7% YoYOther Transport, weightage 2% - 60% YoYMiscellaneous, weightage 2% - 2.7% YoY

Steel Using Sectors in Europe to Grow by 1% in 2022

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