By Paul Ploumis
July 12, 2017 03:30:07 AM
SEATTLE (Scrap Monster): The Economic Committee under the European Steel Association (EUROFER) has published the Q3 ’17 Report. The report predicts improvement to EU steel market conditions during 2017-’18. However, increased protectionist measures may likely impact global trade flow of commodities including steel.
The report notes that the region has witnessed a robust start to the year. The notable gains in demand from end-user segment resulted in 3.1% growth in EU apparent steel consumption during the first quarter of 2017. The estimates and initial data for the second quarter suggest that the apparent steel consumption continued to register mildly positive growth. The apparent steel consumption is predicted to improve during the rest of the quarters in 2017. However, the growth during Q4 will be limited, on account of seasonal destocking activity, said EUROFER Director General Axel Eggert.
The production activity of steel using sectors surged higher by 5.8% during Q1 this year. The countries which recorded considerable growth of production activity in the steel using sectors were Germany, Sweden, the Netherlands and Poland. Sector wise, steel tube sector registered strongest growth, mainly on account of robust pipeline project activity. The steel tube sector recorded 10% jump in production activity. Going forward, the output growth rates are forecast to slow down on year-on-year basis. For the entire year 2017, the EUROFER predicts 3.5% growth in output by EU’s steel using sectors. Further, the growth will slow down to 2.1% in 2018, the report noted.
The production activity in the automotive and construction sectors too contributed significantly to the growth. The EU construction activity rebounded during the first quarter, rising sharply by 4.6% over the previous year. This was mainly aided by strong output growth recorded in several countries including Germany, France, the Netherlands, Sweden, Poland and Hungary. The strong housing demand will drive further growth during the rest of 2017 and in 2018. Non-residential activity is also expected to gain momentum, EUROFER noted. Meantime, EU passenger car registrations witnessed 5.3% jump during Jan-May ’17. The commercial vehicle sales too recorded 4.6% growth during this period. Almost all markets excluding the UK registered growth over this period. The EU automotive output is forecast to increase by 3.8% in 2017 and by 2% in 2018.
The EUROFER report warns that protectionist trade actions by various countries may impact global trade flow. For instance, the Section 232 investigation initiated by the US administration is of great concern. The likely restrictions on US imports will damage the region’s export prospects. Further, it will hamper international trade and global economic growth.