EUROFER: COVID-19 pandemic has slashed steel usage forecasts

EUROFER: COVID-19 pandemic has slashed steel usage forecasts

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Apparent steel consumption in the EU fell by 12 percent year on year, declining for the fifth consecutive quarter, to 37.6 million mt in the first quarter this year, following a drop of 10.8 percent in the fourth quarter of 2019, according to the European Steel Association’s (EUROFER) latest Economic and Market Outlook. The figure for the first quarter of the year reflects the early statistical impact of the crisis, compounding the deterioration in steel demand due to the negative factors that had already materialized in the preceding quarters. This has led to a sharp reduction in steel consumption.

“The coronavirus pandemic has cut the legs out from under the European steel industry, causing severe damage to the whole sector and its value chain. The data now available confirm that the downturn that had begun in 2019 has been compounded by the crisis – with the sector now in a state of emergency”, said Axel Eggert, director general of the European Steel Association (EUROFER).

The EUROFER report said that the Covid-19 outbreak has caused steel consumption forecasts to be slashed as well as the overall economic outlook across the EU and the world. Shutdown measures implemented by governments have severely impacted particularly the manufacturing and automotive sectors from the second half of March until late April/early May, including steel mills. This resulted in a pronounced slowdown in output growth in steel-using sectors. Total output in steel-using sectors fell by 7.2 percent in the first quarter this year after falling by 1.3 percent in the fourth quarter of 2019.

The outlook for the global economy has been hugely impacted by the Covid-19 pandemic. Even after the return to normal business conditions, the EU economy will still be particularly vulnerable as it is exposed to fluctuations in international trade, EUROFER noted. As the largest contribution to growth during the previous cycle came from exports, a slowdown in export markets will further exacerbate the difficulties that EU economies are likely to face.

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