Low oil prices and weaker euro support improved market sentiment in EU

Speaking at the SteelOrbis 2015 Spring Conference & 72nd IREPAS Meeting in Paris on March 23, Jeroen Vermeij, director of market analysis and economic studies at the European Steel Association (EUROFER), said that market sentiment in the EU has started to improve again, underlining two major reasons for this: low oil prices and the weaker euro, which is at an 11-year low against the US dollar. He stated that low oil prices allow for lower energy costs and lower transport costs, while adding that the weak euro gives EU-based companies an advantage in the export markets. On the other hand, the EUROFER official pointed out that, despite the positive outlook, uncertainties remain, including in relation to internal stability, for example regarding Greece, and slowing growth in the EU's key trade partners.
 
Regarding steel-using sectors, Mr. Vermeij said that a further gradual rise is expected in industry activity for 2015-16, adding that more investment will be driven by better access to finance and credit. In 2014, total steel imports into the EU increased by 12 percent, causing EU mills to lose market share, though stable conditions have been observed in early 2015.
 
For 2015-16, Vermeij predicted improving activity in steel-using sectors, with long product demand catching up as construction recovery gains momentum. He went on to say that steel demand is anticipated to rise approximately by two percent in 2015 and by 2.5 percent in 2016. However, imports still remain a threat for the EU, he warned.