Output of European steel using industries falls 0.4 percent in Q1

The output of European steel using industries in the first quarter of 2010 fell 0.4 percent compared with the same quarter of 2009, according to the third quarter report of the ‘Economic and Steel Market Outlook 2010-2011', released by the European Confederation of Iron and Steel Industries (EUROFER). This slight year-on-year decline hides a sharp reduction in output in the construction industry and the related structural steelwork sector in Europe due to the harsh winter weather and a much more benign trend in activity in most other steel using sectors. Orders and output have improved across a wide range of manufacturing sectors owing to the improvement in international trade driven by the rapid rebound of the Asian emerging countries. The improvement in activity levels has fuelled replenishment of inventories in the supply chain.
 
First data and estimates for the second quarter of 2010 signal that this trend gained further strength in recent months. Except for the European construction and shipbuilding sectors, output registered year-on-year growth in all steel using sectors.
 
Current forecasts for the second half point to the continuation of the gradual strengthening in industrial activity. On balance, EUROFER said that the Steel Weighted Industrial Production (SWIP) Index may rise 1.7 percent in 2010.
 
From 2011 onwards, the expected mild improvement in internal EU demand will provide further back-up to the stimulus coming from exports. EUROFER did not revise its previous forecast, concerning output in the steel using industries, which is seen to grow by almost four percent in 2011.