European steel demand will shrink this year, industry group the European Steel Association (Eurofer) said on Tuesday, downgrading its outlook for a fourth time this year due to weak demand and a sluggish economy.
In July, the Eurofer cut its 2024 outlook for steel demand growth in the EU to 1.4%, but on Tuesday it said consumption would fall by 1.8%. It previously lowered its expectation in February and April.
“The severe consequences of the war in Ukraine and other global geopolitical tensions, along with the deteriorating manufacturing outlook across the EU and uncertainty in the overall economic environment, have continued to take their toll,” a Eurofer report said.
It still expects growth in apparent steel consumption next year, but cut its forecast to a gain of 3.8% from 4.2%.
Apparent steel consumption measures output of steel producers plus net imports minus net exports.
The group of steel producers said it downgraded its forecasts after data showed that apparent steel consumption in the second quarter fell 1.3% to 34.8 million metric tons after a slide of 3% in the first quarter.
“Such data further confirm the urgent need for action at (the) EU level to preserve sustainable steel production and quality jobs in Europe while supporting decarbonisation investments,” said Axel Eggert, general director of Eurofer.
He called on the EU to address global overcapacity, unfair trade practices, high energy prices and access to ferrous scrap.
“Even with a modest recovery projected in 2025, consumption volumes are likely to remain well below pre-pandemic levels,” Eurofer said.
In the second quarter, steel imports to the EU fell by 1.5%, but their overall share climbed to an historic high of 28%, it added.
Spanish steelmaker Acerinox on Tuesday posted a sharp drop in third-quarter net profit as a result of a weak stainless steel market in Europe and North America that it said will likely continue through the fourth quarter.
(Reporting by Eric Onstad; Editing by David Holmes)
