Apparent steel consumption in the EU fell by 10.8 percent year on year in the fourth quarter of 2019 after a drop of 1.6 percent in the third quarter. This resulted in an annual decline of 5.3 percent for the full year of 2019, according to the European Steel Association’s (EUROFER) latest Economic and Market Outlook.
“This was the worst performance in EU steel demand since 2012. The negative development seen in the fourth quarter of 2019 is the result of the continued slump in the EU’s manufacturing sector due to weakened exports and investment. This trend became more pronounced during the second half of last year, coupled with escalating trade tensions between the US and its major trading partners. The outbreak of the Covid-19 pandemic has compounded an already challenging steel market situation, with unprecedented consequences for the European steel industry. Capacity idling, reductions in the workforce and cuts in production are already taking place at an unprecedented scale. This difficulty will likely continue when manufacturing restarts as lockdown measures ease across Europe,” said Axel Eggert, director general of EUROFER.
The EUROFER report said that the Covid-19 outbreak has caused steel consumption forecasts to be slashed and the overall economic outlook downgraded. Shutdown measures implemented by governments starting from March 2020 have severely impacted manufacturing activity and steel-using industrial sectors.
Although it is unknown when or whether the normal economic activity will be fully restored. EUROFER assumes that production should be able to restart again in almost all industrial sectors from the beginning of the third quarter, given the pace of deconfinement and the measures to ease the lockdown that have been set out by most EU governments. The coming months will nevertheless be determined by global restrictions on economic activity.