EUROFER: EU steel trade surplus reflects downtrend in steel imports

In 2009 the European Union registered for the first time since 2005 a trade surplus in its steel trade. This rather reflects the downward trend in imports in 2009 than a significant rise in EU steel exports, which have been remarkably stable over recent years, according to the Economic and Steel Market Outlook 2010-2011/Q2 2010 Report from EUROFER's Economic Committee, released by the European Confederation of Iron and Steel Industries (EUROFER).
 
The trade surplus is basically in long products. Robust demand for construction related steel products such as rebar in North Africa and the Middle East offered steel mills in Europe the opportunity to offset weakened demand in the domestic market. Particularly Algeria has been a major export destination for EU long product producers, absorbing 35 percent of total exports of longs.
 
According to EUROFER, the outlook for 2010 is for a slight increase in exports. However, following a relatively strong start in the first quarter, export volumes are seen trending downwards in the remainder of the year. Existing projects in the key export markets around the Mediterranean Sea are coming to an end while large new projects were postponed during 2009 because of financing problems.
 
On balance, EU steel exports are expected to increase by almost three percent in 2010.
 
The outlook for 2011 is for exports to stabilize at the 2010 level. Improving demand fundamentals in the EU market will result in EU steel mills being primarily geared for expanding business in their domestic markets instead of the international export markets.