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Activity in EU Steel-Using Sectors fell by 0.2% in 2019

Steel News - Published on Wed, 27 May 2020

Image Source: Steel Demand Europe
European Steel Association EUROFER in latest Economic and Steel Market Outlook 2020-2021 said that “Total production activity in EU steel-using sectors fell by 0.2% in the whole year 2019 - further to an increase of 2.9% in 2018, which was the first drop in output since 2013. The 2019 negative growth was the result of an increase in construction output and a drop in all other steel-using sectors, the most pronounced being recorded by the automotive sector. Production activity in steel-using sectors of the EU has continued to lose momentum over the past few quarters. Since the second quarter of 2019, manufacturing output has been falling on a year-on-year trend, with the only exception being the third quarter (for which data has been revised). In the fourth quarter of 2019, total steel-using output dropped by -1.6%, after a moderate increase of 0.4% in the third quarter. Manufacturing activity has been dragged lower by the downturn in international trade, the automotive slump and weakening business investment as a result of the significant loss in confidence in the corporate sector due to trade disputes and Brexit-related uncertainty. Since mid-2018, automotive production activity has been under severe pressure. Meanwhile, total production activity in the steel-using sectors has held up somewhat better thanks to the resilience in the construction sector, because it is largely protected from the current negative impact of weakening dynamics in foreign trade. Overall output in the steel-using sectors in the fourth quarter of 2019 registered negative growth in Germany, Italy, France, Spain and the UK, with zero variation in the Netherlands.”

Total steel-using sectors forecast 2020-2021
Segment% Share in total ConsumptionYear 2019QT19Q2'19Q3'19Q4'19
Mechanical engineering14-0.51.3-0.4-1.3-1.7
Domestic appliances3-1.7-2.3-2.4-0.3-1.6
Other Transport26.
Metal goods14-1.20.9-1.3-2.2-2.1

The Coronavirus outbreak and the related industrial and economic lockdown are expected to ave a massive impact on steel-using sectors’ output, with plant closures, capacity reduction (permanent and/or temporary) and huge supply chain disruption already in place. These are expected to continue to weigh their negative effects on industrial activity even once lockdown measures are removed, possibly around the end of the second quarter of 2020. Economic growth and global trade are set to remain weak until early 2021, with repercussions for export-oriented sectors (automotive in particular). This will also affect EU investment via sharply weakened business confidence levels. Continued resilience in construction (that is: probably less negative output growth than other sectors in 2020) may cushion negative trends in other steel-using sectors.

Source :

Posted By : Yogender Pancholi on Wed, 27 May 2020
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