Economic and steel market prospects 2020-2021 - EUROFER

The European Steel Association EUROFER said that “the outbreak of COVID-19 has resulted in lower steel consumption forecasts and a lower overall economic forecast. Shutdown measures taken by governments since March 2020 have seriously impacted production activity and the use of steel in industry. However, steel demand was deteriorating even in 2019. EUROFER CEO Axel Eggert said that “the European steel sector was already experiencing weak changes in the second half of 2019 due to the downturn in the EU manufacturing sector, exacerbating trade wars between the US. and several of its major trading partners, ineffective EU steel security guarantees and lingering uncertainty over Brexit. These factors combined have led to a constant deterioration in business sentiment and a containment growth in investment during 2019.

Apparent steel consumption in the EU fell -10.8% year-on-year in the fourth quarter of 2019 after falling 1.6% in the third quarter, resulting in an annual decline of -5.3% for all of 2019. This was the worst indicator in EU steel demand since 2012. The negative development in the fourth quarter of 2019 is the result of an ongoing downturn in the EU manufacturing sector due to weakening exports and investment. This trend became more pronounced in the second half of last year, coupled with growing tensions between the US and its main trading partners. "

Eggert stressed: “The outbreak of the COVID-19 pandemic has exacerbated an already difficult situation in the steel market, with unprecedented consequences for the European steel industry. Idling, shrinking workforce and cutting production are already happening on an unprecedented scale. This difficulty is likely to continue after the resumption of production, as lockdown measures are facilitated across Europe. "

EUROFER added: “As of this writing, it is unknown when and when normal economic activity will be fully restored. EUROFER suggests that, given the pace of deconfinement and lockdown relief measures set by most EU governments, production should be able to resume operations in almost all industrial sectors from the beginning of the third quarter. However, the coming months will be determined by global restrictions on economic activity. "