By Paul Ploumis
May 17, 2017 03:00:56 AM
SEATTLE (Scrap Monster): The European Steel Association (EUROFER) in its latest released Annual Report 2017 states that the overall EU steel market registered marginal expansion during the previous year. The steel demand in the region improved modestly during the year, aided by marginal recovery in EU economy. Meantime, rising imports absorbed the modest growth in steel demand.
According to EUROFER report, the overall EU steel market expanded by 3.2% in 2016, mainly on the back of 1.9% growth to EU economy. For the fourth straight year, imports registered stronger growth than actual EU steel market. The imports surged higher by 9% during the year, accounting for almost one-fourth of the EU market. It must be noted that the import market share jumped higher significantly from historic levels of 17%. The dumping of steel products by third country competitors has resulted in serious injuries to EU domestic steel producers and has caused pressure to European steel industry in general.
The total finished product imports soared by 10% in 2016. Similar growth was witnessed in flat products and long products. China, the Russian Federation and South Korea were the key exporters of flat products to the EU region. These three countries accounted for 51% of the total flat imports by the region. The main exporters of long products to the region were Turkey, the Russian Federation, Ukraine and Belarus. The combined imports from these countries constituted 56% share of EU long products import in 2016. Among products, imports of hot-dipped metal coated sheets surged higher by 48%. Also, imports of heavy sections witnessed 44% jump.
The EU crude steel production totaled 162 million tonnes in 2016, falling marginally by 2.4% over the previous year. Meantime, apparent steel consumption grew by 3.2%.
The EU steel exports to third countries witnessed decline of 11% in 2016. The largest year-on-year decline of 62% was recorded in exports of semis. The exports of finished steel products dropped by 6% over the year with flat product exports falling by 5% and long products export dropping by 7%. The key destinations of EU flat products export were Turkey and the US. The major importers of EU long products were Algeria, Turkey and the US. The region remained a net importer of steel during the year. The total trade deficit in 2016 amounted to 10.8 million tonnes.
The activity in steel-using sectors weakened in the second half of the year, after posting relatively strong growth in H1 2016. The overall activity in steel-using sectors increased marginally by 1.7% in 2016. The activity in automotive industry continued to expand at a robust pace. On the other hand, the construction sector activity recorded double-digit decline in 2016. Mechanical engineering activity too remained moderately sluggish during the year, EUROFER Annual Report noted. Further, the report forecasts that production activity by steel-using sectors is likely to expand by 2% in 2017.
The report also provides detailed analysis of steel scrap market movements in 2016. Scrap buying activity remained quiet during the starting month. Prices began moving up in early-February and continued to remain range-bound until end-April. After a surge in May, it remained flat over the summer. The prices resumed upward trend by end-October. However, the uptrend failed to sustain towards the end of the year.
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.