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EUROFER is located in Brussels and was founded in 1976. It represents 100 per cent of steel production in the European Union. EUROFER members are steel companies and national steel federations throughout the EU. The major steel companies and national steel federations in Switzerland and Turkey are associate members. The European steel industry is a world leader in its sector with a turnover of about 170 billion euros and direct employment of about 330 thousand highly skilled people, producing on average 170 million tonnes of steel per year. More than 500 steel production sites in 24 EU Member States provide direct and indirect employment and a living for millions of European citizens. Closely integrated with the European manufacturing industries, steel producers provide the basic material for innovation, growth and wealth in Europe.
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 2018-2019 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.
EU28 apparent steel consumption rose by 3% year-on-year in the first quarter of 2018. Robust real steel consumption and the seasonal restocking in this period explain this growth.
Domestic deliveries to the EU market rose by 2.1% year-on-year to 37 million tonnes in the first quarter. Third country imports rose by 9.8% to 10 million tonnes compared to the already elevated import level registered in the same period of 2017. As a result imports reached the highest quarterly level since the third quarter of 2007. This confirms that the volume effects of anti-dumping measures imposed by the European Commission over the course of 2017 faded out rapidly due to other third country suppliers filling the gap left by the countries which had duties applied to them.
The EU market witnessed a seasonal inventory build-up in the distribution chain and at the end-user stage, which is common in the first quarter of the year. The extent of the increase in steel stocks was lower than in the same period of 2017, which suggests a rather high stock rotation and robust levels of distribution chain sales.
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.
In the first quarter of 2018 all steel-using sectors in the EU – except steel tube manufacturing – registered an increase in production activity. At the country level, almost all reporting countries reported higher activity levels, with some of them – Sweden, Austria and Poland – registering double-digit growth in total production activity. Main exception was Germany owing to the negative impact of a contraction in tube output.
Production activity in EU steel-using sectors is forecast to grow by 2.8% in 2018 and by 1.9% in 2019.
The outlook for the production trend in the EU steel-using sectors for 2018 and 2019 is favourable overall. Economic conditions look set to remain supportive to growth; domestic demand will be the key driver of growth over this period. However, the recent rise in protectionism is fuelling uncertainty and could result in important growth factors, such as business confidence and investment, deviating from the expected scenarios.
Output in EU steel-using sectors is forecast to grow by 3.1% in 2018 and by 1.9% in 2019.
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