EU steel market situation and outlook

Transcription

1 75nd Session of the OECD Steel Committee Paris, 5th December 2013 EU steel market situation and outlook

2 EU economy: on the road to recovery 2013: economy turned the corner in Q2 Indicators strengthening Recession ended in Q2 Exports key driver Despite Euro appreciation Positive effect EU reforms Less austerity more stimulus Domestic demand still weak but not acting as a major drag anymore Credit remains an issue for SMEs Unemployment stabilising Near-stagnation GDP in 2013 Source: European Commission, EUROFER Source: Eurostat, EUROFER Economic Committee 2014: cautious recovery Internal demand seen improving Domestic demand driven by investment in machinery & equipment Credit supply seen easing as confidence is gradually restored More relaxed fiscal policies Exports: will Euro act as a drag? GDP growth 1.3% in

3 EU steel-using sectors: business conditions improve from weak Q1 Negative carry-over effect Q1 Downward trend easing Access to finance needs to improve further Exports key driver in 2013 Investments recover from 2014 Low stocks in supply chains Total drop activity 2013: -3% 2014: 2% growth Source: EUROFER, European Commission Source: Haver Analytics 3

4 Construction: markets seen bottoming out in 2014 Q1 13 output: -7.5% y/y Only modest seasonal pick-up in Q2 Large country divergence Fundamentals to remain weak Key factor: lack of large projects Funding, confidence, reduced capacity utilisation industry & commerce, large unsold property stock Heavy competition on smaller projects Residential sector and R&M best positioned But no major steel users 2013: EU output to fall 3.5% 2014: low-level stabilisation/slight rise Country divergence narrowing Positive: confidence up, attractiveness property investment, low interest rates, better activity industry/services Negative: financial sector deleveraging, unsold property stocks Source: European Commission Source: Haver Analytics 4

5 Automotive: improving sales provide some hope for 2014 Source: ACEA, VDA Source: Haver Analytics Q3: +3% 9M 13 passenger car sales -3.9% y/y Q3: +3% y/y 9M 13 commercial vehicles -4% y/y Q3: +2% y/y Car exports supportive to some OEMs After 9% drop in output in Q1, stable in Q2-Q3 Sales sticking around 2012 level would support output levels Q4 13 The same for exports Total output 2013: -2% 2014 output: +2% Positive: expectation of slight rebound EU car sales following 5-yr downturn, buyers market, improving business climate supportive to CV demand, exports demand overall robust Negative: mature market limits upward potential, EU margin pressure, heavy competition 5

6 Steel Market: mid-year stabilisation underpins recovery scenario 2014 H1-2013: demand under pressure Weak activity steel using sectors Cautious buying stocks kept low High import pressure July-August: signs of stabilisation Orders holding steady/improving More so for flats than longs Import pressure easing low stocks H2-2013: demand seen trending upwards Slightly better activity steel-users No need for stock reductions as in 2012 Easing import pressure Q4: positive growth demand y/y Apparent consumption: 2-2.5% in 2013 Source: EUROFER 2014 Cautious recovery from low level Rebound activity steel-using sectors Steel intensity less negative Slight rise RSU: 1.5% Slightly positive inventory cycle Apparent steel consumption +3% 6

7 EU Steel Trade Flat Products Yearly export volumes stable Import volatility shifting EU trade balance Long Products Strong decrease imports following EU construction market depression Increase export volumes (Million tonnes) Source: Comext, EUROFER 7

8 EU China Steel Trade High degree of variability in volume of Chinese imports into the EU (flat) FLAT products (thousand tonnes) LONG products EU imports from China (thousand tonnes) EU exports to China FLAT LONG FLAT LONG Source: COMEXT 8

9 Steel Trade Flows EU perspective Major decrease in FLAT steel imports from Far East Asia Major decrease in LONG steel imports from West Europe (Turkey) and Far East Asia LONG steel exports driven by North Africa Imports FLAT ,2 million tonnes ,9 million tonnes Exports FLAT ,6 million tonnes ,0 million tonnes (Thousand tonnes) Imports LONG ,5 million tonnes ,7 million tonnes Exports LONG ,5 million tonnes ,2 million tonnes Source: Comext, EUROFER 9