Davis Index: Market Intelligence for the Global Metals and Recycled Materials Markets

The EU’s steel industry is expected to recover by the second half of 2020, albeit moderately.


According to the European Steel Association’s (Eurofer’s) outlook, the market will be stronger by Q3 2020, but will remain susceptible to import distortions and persistent global overcapacity. However, apparent consumption will rebound to a growth rate of 1.2pc. The EU’s steel-using sectors are projected to grow marginally by 0.6pc in 2020 and by 1.4pc by 2021.


The continent’s sagging manufacturing sector affected apparent steel demand in 2019, declining by 3.1pc from the prior year. Apparent steel demand fared worse during the second quarter of 2019, when it fell by 6.7pc compared to Q2 2018. 


Domestic steel deliveries in the EU continued to decrease in the third quarter, following declines in the first two quarters of 2019. It decreased by 4pc in Q3 compared to Q3 2018. Third country imports decreased by 1pc and totaled 8.8mn mt, comprising 23.8pc of EU steel demand. 


Steel stock trended negatively, as well, and impacted final steel use. This partially occurred because a steel stock surplus at the end of Q1-2019 catalysed stock reduction in Q2, contrary to seasonal patterns.


The US-China first phase trade agreement signed in the middle of January will ease global tensions, however, risks to stability haven’t dissipated, Eurofer indicated in its report. With EU manufacturing mired in a spiral, Brexit’s outlook still nebulous, and a host of new potential geopolitical tensions arising in the Middle East, a shadow has been cast over the next few quarters, the association said.

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