According to the Economic and Steel Market Outlook 2018-2019/Q3 2018 Report from the Economic Committee of the European Steel Association (EUROFER), the EU steel market began 2018 on a relatively strong footing, supported by the ongoing economic recovery and because of improved business conditions in steel-using sectors. However, imports continued to increase from already high levels in 2017. Over the forecast period of 2018-19, steel demand is expected to flatten as the growth of final steel use slows down to a more sustainable rate of expansion. The recent rise in protectionist trade measures is deepening uncertainty and could result in the market situation diverging from the base-case scenario.
EUROFER director general Axel Eggert stated that the latest data confirm the severe impact the US Section 232 tariffs are having by deflecting imports into the EU with surges across almost all product lines and added that this surge is occurring at the same time as growth predictions are being revised on to flatter trajectories. Mr. Eggert said that the EU steel sector cannot risk the ongoing recovery being put at stake; accordingly, EUROFER welcomes the recent EU safeguard in its efforts to stabilize the sector.
According to EUROFER, EU steel demand prospects are in principle rather positive. Current expectations for the economic and business climate support the expectation of continued growth in apparent steel consumption in 2018 and 2019. However, international steel trade fundamentals have become highly uncertain and more difficult to foresee. The sharp rise in imports of specific steel product from some third countries confirms that steel trade distortions remain a threat, which could be exacerbated by trade deflection resulting from the Section 232 tariffs applied by the Trump administration.
Meanwhile, the report stated that the outlook for the production trend in the EU steel-using sectors for 2018 and 2019 is favorable overall. Economic conditions look set to remain supportive to growth; domestic demand will be the key driver of growth over this period.