By Paul Ploumis
SEATTLE (Scrap Monster): The latest press release by the European Steel Association (EUROFER) states that the EU steel market has shown greater stability during the starting months of 2017. The regional steel market conditions have reported considerable improvement, both on the demand and supply sides. The data for January and February this year indicates better performance by region’s steel mills. However, the trade body cautions import pressures in the forthcoming months.
According to Director General Axel Eggert, the trade data clearly suggests that EU steel companies have gained from improving domestic steel demand. There has been an improved balance between import and domestic supply of steel products during the first quarter of 2017, Eggert noted. However, he cautioned EU regional administration to ensure that the volume of imports from third countries does not have a negative impact on the region’s demand-supply balance. The imposed anti-dumping duties may provide temporary relief, but unfair trade and stepped up deliveries tend to pose big threat to the EU steel market balance.
The EU apparent steel consumption has reported growth of 2.1% over the previous year during the first quarter of 2017, in accordance with preliminary trade data. The customs data for the initial two-month period of the year suggests that steel imports by the EU region rose marginally by 1.2%. The improving steel demand has benefited domestic deliveries as well. In fact, domestic deliveries had posted first significant growth during three years in 2016. The apparent steel demand had registered significant increase during the previous year. The steel demand had surged higher by over 7% year-on-year during Q4 ’16 alone.
Meantime, steel trade deficit in the EU region increased considerably during the early months of 2017. The imports of flat products increased, especially those of coated coils. The average monthly deficit for flat products touched 741,000 tonnes. The imports from India gained significantly. On the other hand, exports of long products declined. The average monthly trade surplus for long products sector touched 77,000 tonnes, as compared with 335,000 tonnes during the same period in 2016.
As per estimates for Q1 2017, steel production activity accelerated by almost 2.5% year-on-year, very much in line with the positive trends reported from industrial sector. The production growth was mainly on account of increased demand from automotive industry. The production in the metal goods and steel tube sector also expanded during the quarter. The construction and mechanical engineering sector activity too reported moderate improvement when matched with the corresponding quarter last year.
EUROFER forecasts moderate growth to EU steel demand in 2017 and 2018. The Association forecasts solid domestic demand and enhanced exports during the current year and the year to follow. The total activity in steel-using sectors is likely to grow by over 2% per annum in both 2017 and 2018.
Founded in 1976, EUROFER represents 100 per cent of steel production in the European Union and comprises of steel companies and national steel federations throughout the EU. Also, major steel companies and national steel federations in Switzerland and Turkey are associate members of the association.