International credit rating agency Moody’s has stated in a report that the risk of price falls and profitability pressures on the back of competition from cheap imports underpin the negative outlook for the European steel sector in 2017. Meanwhile, the 2017 outlook for the Russian steel sector is also negative given weak domestic demand.
According to Moody’s, steel imports to Europe will continue to grow next year, despite antidumping duties, placing pressure on prices and the profits of European steelmakers. In addition, the uncertainty around the sustainability of the rebound in steel prices, the expected weak one percent demand growth in 2017, and the additional threat to profitability from rising raw material costs are the other factors underpinning the negative outlook for the European steel sector.
Regarding Russia, the credit rating agency stated that it expects domestic steel demand in the country to remain weak until the economy, consumer confidence and purchasing power stabilizes. Furthermore, trade protection measures in export markets will also increasingly pose a risk to Russian steelmakers.