The European Confederation of Iron and Steel Industries' (EUROFER) Economic Committee released its January, 2009 report on economic and steel market outlook 2009-2010.
Due to the report, the EU steel market is severely impacted by the recession and will be facing an unprecedented downturn this year, while the recession will start bottoming out by late 2009. The latest forecasts of EUROFER's Economic Committee show EU GDP growth falling this year by 1.9 percent; a slight improvement in economic conditions is pencilled in for 2010.
EUROFER said, "The significant deterioration in economic fundamentals since autumn 2008 is fully reflected in the outlook for the EU steel using industries; the first half of this year will see output falling by 10 percent year on year. The second half is expected to see a gradual easing of the downward trend, but on balance production in the steel using sectors will still fall 7-8 percent in 2009. Particularly the automotive sector is badly affected by the recession, but also construction, steel tubes and the engineering sectors cannot escape a sharply downward trend. Most sectors will see a mild improvement in 2010. "
"As a result, apparent consumption will drop by 29 percent year on year in the first quarter and by a further 23 percent year on year in the second quarter. Apparent consumption will continue to decline in the remainder of 2009, albeit at a less dramatic rate; fourth quarter of 2009 is expected to see some growth again compared with the very low fourth quarter of 2008 level. Despite the projected 11 percent decline in imports in 2009, import pressure will remain high because of the much stronger sacrifice the domestic producers are making in order to enable the market to reach a new equilibrium," stated EUROFER.
"Following the 15 percent drop in 2009, some growth in apparent consumption is foreseen for 2010, owing to the absence of a huge stock reduction as seen in 2009," added EUROFER.