EU apparent steel consumption grew by 3.1 percent year on year in the first quarter of the current year, driven by robust gains in end-user consumption and apparent steel consumption is forecast to continue to improve over the remainder of this year, although seasonal destocking will have a negative effect on consumption growth in the final quarter of the year, according to the Economic and Steel Market Outlook 2017-2018/Q3 2017 Report from the Economic Committee of the European Steel Association (EUROFER).
EUROFER said that in 2018 steel demand growth is expected to moderate, on a par with the mild slowdown in real consumption growth.
EUROFER director general Axel Eggert stated that, in spite of this mildly positive demand scenario, import distortions will remain the main risk for the stability of the EU steel market, and added that, with no structural solutions for the underlying problem of global overcapacity in sight, the number of protectionist and even isolationist measures look set to increase. According to Mr. Eggert, measures potentially stemming from the US Section 232 investigation may lead to a proliferation of disastrous global trade flow distortions.
In the first quarter of this year, the production activity of steel-using sectors in the EU increased by a healthy 5.8 percent year on year, visibly exceeding earlier expectations of a more moderate rise in activity, the EUROFER report said. While all sectors performed remarkably strongly compared with the same period of 2016, it was the steel pipe sector that showed the strongest rise owing to strong pipeline project activity. However, production activity in the automotive and construction industries also rose at a significantly faster pace than anticipated. Prospects for the remainder of this year and 2018 are positive, although year-on-year output growth rates are forecast to slow down as base-year effects and temporary stimulation factors are expected to fade in the future.