International credit rating agency Moody's has announced that European stainless steel demand will continue its upward trend in 2015, supported by improvement in major end markets and restocking.
According to Moody's, in order to sustain profit growth, European stainless steel manufacturers will need to maintain high demand. With Moody's forecast for the continued recovery of demand from all end-user segments, the rating agency expects that European producers' profitability will improve through 2015.
Moody's report indicated that the main stainless steel end markets are expected to maintain their modest growth, owing to continued economic growth, even if slow, in most of the euro area and rising consumer confidence. In addition, the price of nickel has increased by almost 35 percent since the beginning of 2014, supporting restocking and higher demand in the first quarter of 2015.
Capacity utilization is also on the rise. Based on the current level of activity and European stainless steel slab demand, capacity utilization is roughly 75 percent. As demand continues to grow, Moody's expects that capacity utilization will improve towards 80 percent on average in the next 12-18 months.