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EU Steel Market down By 2% through 2020 - Moody’s

Steel News - Published on Mon, 07 Oct 2019

Image Source: The Print
Credit ratings agency Moody’s has warned that weak automotive sales will hit ArcelorMittal and other European steelmakers this year and next. Moody’s Investors Service forecast that “Western European light vehicle sales will decline 2% in 2019 and 3% in 2020, which will weaken demand for higher value-added steel. The report issued on 1 October, stated that “Persistent demand weakness and narrow steel spreads keep outlook negative. Our outlook for the European steel sector for the next 12-18 months is negative. We forecast EU apparent steel consumption, measured as production plus imports minus exports, will contract by around 2% in the next 12-18 months.”

Goetz Grossmann and Christian Hendker, the Moody’s analysts said that “The automotive industry is a particularly important customer for Europe’s higher value-added flat steel producers.”

According to the Moody’s report “ArcelorMittal, Thyssenkrupp and Tata Steel’s European operations will face sustained headwinds in the next 12-18 months, with lackluster auto sector demand constraining steel shipments, orders and top line growth. If US authorities decided to impose tariffs on automotive imports from the EU this would further harm the European automotive supply chain and steel demand as a result.”

It added that “Although demand in the European construction industry remains healthy, we expect this to soften in 2020 as confidence deteriorates.”
The outlook for the European steel sector for the coming 12 to 18 months is negative, Moody's Investors Service said today in its annual outlook report on the sector.

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Posted By : Sanju Moirangthem on Mon, 07 Oct 2019
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