At the SteelOrbis Fall '11 Conference & 65th IREPAS Meeting held in St. Petersburg on September 25-27, market players agreed that the effect of the depression in the European economy on the steel market will be limited.
While Kim Marti from Groupo CELSA reasoned that European long steel producers have been adjusting their production to actual demand since the economic crisis back in 2008, Ugur Dalbeler from Colakoglu Metalurji also recalled that European steel mills have already been operating at reduced capacity usage since 2008 and that Europe had already been in a depression in terms of construction output, adding that Turkey used to export about two million mt of rebar to the European market. However, these exports have halted in the past two years. Ioannis Meimaroglou, in the meantime, remarked for his part that Europe is no longer the center of the world.
Assessing the opportunities that European long steel suppliers are said to be enjoying in export markets due to the weakness of the euro against the US dollar, Mr. Marti said that he does not believe that European suppliers will expand beyond their traditional market, namely, the Mediterranean basin. On the other hand, Mr. Dalbeler said that there are indeed some cheap long steel export offers from Italy, Greece and Spain. However, he added, the quantities of these offers are very limited. Dalbeler also emphasized that it is impossible to see such rapid changes, since European suppliers are not prepared for such a change given their limited inventory and production levels.
Comparing the current economic situation in Europe with the crisis of 2008, F.D. Baysal from Seba International stated that both markets and governmental institutions are no longer unprepared for such conditions. Thus, while governments have rapidly reacted against potential risks, producers have reduced their output level in line with demand.