In the press seminar of the European Steel Association (EUROFER) on the state of the EU steel market and the wider economic conditions for the European steel industry, Alessandro Sciamarelli, EUROFER’s director of economic research and market analysis, gave his predictions for the European steel industry in 2020 and 2021.
Mr. Sciamarelli stated that the shutdowns in the EU steel-using industries between mid-March and the end of May and the impact of the pandemic led to a steel production decrease of over 17 percent year on year. He said that apparent steel consumption in the EU is expected to decrease by 14.6 percent in the current year and rebound by 13.1 percent in 2021. Real consumption is expected to fall by 11.5 percent this year and to rebound by 9.3 percent in 2021. In the second quarter of the current year, apparent steel consumption decreased by 25.5 percent and imports fell by 16.7 percent, both year on year.
The EU import volumes decreased in the first nine months of the current year reflecting depressed demand, the EUROFER official indicated, adding that the EU‘s imports of finished steel decreased by 19 percent in the January-August period this year. In the second quarter this year, flat steel imports accounted for a 22.3 percent share of the EU domestic flat steel market, while long steel imports claimed an 8.7 percent share of the EU domestic longs market.
As for the end-market industries, Mr. Sciamarelli said that the EU steel-using sectors were hugely impacted by the coronavirus-related lockdowns and experienced their worst drop in output on record. He stated that the automotive market is set to remain depressed throughout the current year, while output in the sector is expected to decrease by 20.6 percent in 2020 and though it is expected to rebound by 18.1 percent in 2021.
Regarding the construction sector, he noted that, under the current economic circumstances, many EU governments have announced that they will provide stimuli for the completion of public construction and infrastructure projects. EU construction output will drop by 3.6 percent in 2020 and will rebound by five percent in 2021.
The EU Steel Safeguards, reviewed by the European Commission in June this year, have not been adjusted to properly address these changed circumstances in the EU steel market that were caused by Covid-19, leaving the industry in a precarious situation.
According to Mr. Sciamarelli, the record-low steel demand this year was due to the complete stop in industrial activity in the second quarter and is set to recover only in 2021.