According to the Economic and Steel Market Outlook 2018-2019/Q4 2018 Report from the Economic Committee of the European Steel Association (EUROFER), the EU steel market remained on a relatively fast growth track in the second quarter, supported by healthy economic fundamentals and the good operating performance of steel-using sectors. Nonetheless, imports continued to grow much faster than the domestic deliveries of EU mills. Steel demand growth leveling out in the EU and in other regions over the coming quarters – against the backdrop of persisting excess capacities in the global steel sector and proliferation of distortionary steel trade actions worldwide – is reason for concern.
“Growth is stabilizing in EU steel markets, in line with expectations. However, the various challenges facing the sector will impact us in the coming months. Trade tensions could clearly upset the market’s balance, as could slowing demand in other parts of the economy”, said Axel Eggert, Director General of the European Steel Association (EUROFER).
EUROFER said that the continued, marked increase in import supply in the second quarter appears to confirm previous concerns about third country exporters pushing extra volumes to the EU market in anticipation of safeguard measures, and a willingness of buyers to take certain speculative risks.
EU steel market fundamentals are expected to remain supportive to a continued but moderate increase in apparent steel consumption. However, ongoing trade frictions with the US, and cooling global demand, suggest that external risks could continue to climb, which in turn would increase uncertainty and lead to weakening prospects for EU steel users.
Prospects for the EU steel-using sectors in 2018 and 2019 are rather favorable. Despite a mild moderation in economic momentum, framework conditions for steel using sectors are expected to remain supportive to continued but somewhat slower growth of production activity. Domestic demand rather than exports will be the main engine of growth over this period, the EUROFER report noted.