Steel imports to Europe to rise 10 percent in 2010

Trade data for the January-February period of this year and the latest import license information signal a further rise in European Union steel imports in the first quarter of 2010. Projections for the remaining quarters of this year imply that the downward trend in steel imports will turn around from the second quarter onwards, according to the Economic and Steel Market Outlook 2010-2011/Q2 2010 Report from EUROFER's Economic Committee, released by the European Confederation of Iron and Steel Industries (EUROFER).
 
On balance, according to the EUROFER report, total steel imports are expected to rise by almost 10 percent in 2010. Community deliveries of EU mills rising more rapidly in the first half of 2010 will be supportive of an improvement in EU capacity utilization. Relatively weak demand conditions in the EU, the recent depreciation of the euro vis-à-vis other currencies and better demand and price fundamentals elsewhere in the world have reduced the attractiveness of the EU as an export destination for third country suppliers. Moreover, as long as uncertainty about business prospects and price developments persists, steel buyers will prefer to order smaller volumes at domestic EU mills rather than closing deals with overseas suppliers, to reduce the risk of deliveries getting out of sync with actual demand.
 
Imports are forecast to rise in line with the growth in apparent steel consumption in the 2010-11 period. This implies that imports will increase by on average nine percent per annum.
 
EUROFER's projection is based on a relatively well balanced supply-demand situation in the world steel market. However, EUROFER underlines that at this point in time little is needed to derail the expected global recovery; particularly China has the potential to create turbulence worldwide. Any event leading to global demand lagging behind the rising trend in steel output could result in temporary oversupply and rising import pressure in the EU.