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EUROFER Update on Total Steel-Using Sectors Output in Q1 and Forecast

Steel News - Published on Tue, 23 Jul 2019

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Total production activity in EU steel-using sectors grew by 1.1% year-on-year in the first quarter of 2019; this basically reflects a decline of activity in the euro area and an increase in the Central European region. Total production growth in EU steel using sectors lost further momentum in the first quarter of 2019. From the peak in the final quarter of 2017, deteriorating business conditions in the manufacturing industry in general and in the automotive industry in particular led to an on-going moderation in output growth in the steel-using sectors. The only sector bucking this trend is the construction industry. As the largest steel-using sector, the continued robust expansion of production in this sector mitigated the adverse impact of negative or much slower growth of production activity in the other steel-using sectors.

Overall output growth in the steel-using sectors in the first quarter of 2019 was negative in Germany, France, Italy, the UK and Belgium. Production growth was positive in the other reporting countries.

EU Steel Weighted Industrial Production (SWIP) index
Segment% Share in total ConsumptionYear 2018Q1'19Q2'19Q3'19Q4'192019Q1'20Q2'20Q3'20Q4'202020
Construction 354.84.92.92.41.62.91.11.61.41.41.3
Mechanical Engineering 143.81.4-0.20.00.90.51.81.82.12.22.0
Automotive180.1-5.1-4.12.32.4-1.42.81.52.12.32.2
Domestic appliances3-1.9-1.60.00.72.40.40.72.02.61.21.6
Other Transport28.410.99.24.82.76.92.32.22.32.32.3
Tubes 13-1.50.10.00.00.5-0.2-1.11.51.31.31.0
Metal Goods143.10.40.50.10.30.30.30.71.11.30.8
Miscellaneous 21.80.40.50.10.32.20.30.71.11.31.4
Total1002.71.10.51.51.41.11.11.31.61.71.4
 


Total steel-using sectors forecast 2019-2020

The outlook for the EU steel-using sectors in the EU is sluggish. But not just the EU is affected: the downturn in industrial activity is a global phenomenon, reflecting weakening global trade and investment. A fast rebound is unlikely because of the negative impact of US protectionist measures on trade.

For the EU, risks related to the external environment will remain the key challenge over the forecast period 2019-2020. Over the past two years, the fundamentals of global trade have clearly changed for the worse, due to the US government putting tariffs on billions of dollars' worth of goods imported from its main trading partners the EU, Canada, Mexico and China. The affected countries have responded in kind, retaliating with similar tariffs on US products.

EU’s manufacturing base is suffering, particularly in those countries and sectors more exposed than average to international trade. Weakened business sentiment puts investment at risk of falling behind expectations; this would be exacerbated in case of a no-deal Brexit and a further escalation in protectionist trade measures. Automotive tariffs imposed by the US authorities on automotive imports from the EU would seriously harm the entire automotive supply chain. On the positive side, an orderly Brexit and the settlement of trade disputes between the US and its main trading partners would be a potential upside. Support is also provided by continued strength in construction.

Output in the EU’s steel-using sectors is forecast to grow by 1.1% in 2019 and by 1.4% in 2020.

Source :

Posted By : Ratan Singh on Tue, 23 Jul 2019
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