EU steel market conditions are improving, both on the demand and the supply sides; however, with only two months of trade data available, caution about import pressures appears to be justified, according to the Economic and Steel Market Outlook 2017-2018/Q2 2017 Report from the Economic Committee of the European Steel Association (EUROFER).
EUROFER said that EU apparent steel consumption ended 2016 on a stronger note than anticipated. Steel demand in the fourth quarter of 2016 grew by 7.1 percent year on year due to the combined effect of a higher-than-expected gain in real steel consumption and significantly lower inventory reduction than was anticipated on the basis of the normal seasonal inventory pattern over the year. Both imports and EU domestic deliveries gained from this rise in demand. For domestic deliveries it was the first significant improvement in year-on-year growth in almost three years and should be seen as the result of the positive impact of antidumping (AD) duties on supply conditions in the EU steel market.
According to EUROFER, in 2017 and 2018 EU steel demand is forecast to continue to grow at a moderate rate, reflecting the steady rebound of real steel consumption and a slight increase in inventories, in line with activity in the steel-using sectors edging higher.
“The key uncertainty for EU steel producers remains to what extent third country imports will exert a negative impact on the demand-supply balance in the EU. Antidumping duties may temporarily provide solace, but the risk of circumvention and other suppliers stepping up deliveries looms large, particularly as protectionism spreads in response to global oversupply pressures. The EU needs to tackle vigorously unfair trade and to stand to its promise to address global overcapacities,” stated EUROFER director general Axel Eggert.