On April 20, the European Confederation of Iron and Steel Industries (EUROFER) said that its Q2 2011 steel market outlook confirms that evidence for a sustained recovery in
European Union (EU)
manufacturing remains strong, supported by firm export demand and an expected improvement in EU investment
EUROFER director general Gordon Moffat commented, "Rising capacity utilization rates across most sectors and high confidence levels amongst industrialists suggest that investment will strengthen this year and next. Total investment is forecast to increase almost three percent in 2011 and around four percent in 2012. The outlook for investment in machinery and equipment is particularly robust with five to six percent growth, but also investment in
construction is seen growing slightly this year and a bit stronger in 2012, ending a three-year period of decline."
The EU steel market looks relatively well balanced at the start of 2011, according to EUROFER. Stock levels at end-users and in the distribution chain are still assessed as being well adjusted to the current level of downstream activity and bookings in early 2011 remained firm. Real
consumption growth will provide the main stimulus to apparent
consumption growth in 2011 and 2012, supported by the continued rebound in activity of all steel-using sectors. Also, the stock cycle will continue to have a slightly positive impact on steel demand.
EU steel imports are seen rising further, by 12 percent in 2011 and another six percent in 2012, EUROFER said.
Mr. Moffat concluded, "The main uncertainty for the steel sector is the ability of steel mills to pass on the ever-increasing
production cost of hot metal to downstream customers."